Unilateral tariff concessions on 700 items sought from China

ISLAMABAD: Pakistan has requested unilateral tariff concessions from China on approximately 700 items as part of the third phase of the China-Pakistan Free Trade Agreement (CPFTA), currently under negotiation.

This development was disclosed by officials of the Ministry of Commerce during a meeting of the National Assembly Standing Committee on Commerce, chaired by Jawed Hanif Khan. The Commerce Ministry’s team was led by Additional Secretary (In-charge) Salman Mufti.

According to the Ministry, Pakistan’s exports to China have increased following the second phase of the CPFTA. However, Pakistan’s preferential market access has eroded due to China’s FTAs with other trading partners.

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In FY 2024–25, Pakistan’s total exports to China stood at $2.375 billion, of which $2.16 billion were under the FTA framework. The Ministry informed the Committee that negotiations are under way with Beijing to secure market access on par with ASEAN and Bangladesh. Efforts are also under way to ease compliance burdens through agricultural protocols and explore the establishment of a “Green Channel” at the Sust-Khunjerab border.

The Committee was briefed on the limited diversification of Pakistan’s exports and the need for intensified trade promotion. Officials highlighted initiatives such as participation in major expos— including the China International Import Expo, China International Supply Chain Expo, and Pakistan’s flagship events (FoodAg, HEMS and TEXPO) — as key avenues for joint ventures, technology transfer, and integration into global value chains. The panel’s members emphasised the need for value-added exports rather than continuing to ship raw and unprocessed goods to China.

The Committee discussed the issue of licensing the district chambers, especially Karachi, Malir, and Korangi, and the status of applications and compliance by the Karachi Chamber of Commerce and Industry (KCCI). The business community’s leader Zubair Motiwala, KCCI President, Jawed Bilwani and Junaid Makda gave arguments that there should be no change in KCCI’s status and role.

Asad Alam Niazi, MNA opposed the establishment of new chambers in Karachi in the presence of the KCCI. However, Ikhtiar Baig and Ramesh Kumar Vankwani gave their views in favour of the establishment of chambers on district level.

After hearing arguments from KCCI’s representatives and Director General Trade Organisations (DGTO), Bilal Khan Pasha, the Committee directed the Commerce Ministry to send a summary to the federal cabinet to maintain the current stature of the KCCI while issuing licences to the proposed district chambers.

“The Committee settled a long-standing issue regarding the Karachi Chamber of Commerce and Industry (KCCI), affirming that KCCI will continue as the premier chamber with its name and status intact. The Ministry was directed to move a summary to the Cabinet to formalise KCCI’s position while enabling the establishment of new district chambers without undermining its role,” said an official statement.

The case of the North Karachi Association of Trade and Industry (NKATI) was also taken up. Members expressed concern over its license lapse in 2019, which was only raised in 2025, and recommended referring the issue to the Federal Government for time-limit condonation.

During the discussion on the compliance status of previous decisions, the committee refused to hear the Chief Financial Officer of Trading Corporation of Pakistan (TCP), saying it would not proceed on the issue of TCP’s liabilities until its Chairman is available.

The committee expressed annoyance over the Commerce Ministry for its failure to resolve the issue of SRO 760, due to which export and import of gold are suspended.

Additional Secretary (Incharge) Salman Mufti made different excuses on the issue, saying that the ministry sent a Note to the Prime Minister on August 13, 2025, recommending continuation of the SRO, as no data discrepancy had been reported.

The committee Chairman expressed anger over the undue delay in the resolution of the issue, saying it appears that the Commerce Ministry has kept the committee in the dark deliberately as it didn’t pursue the Prime Minister’s office properly on this important matter. The Committee decided to write to the Commerce Ministry that it should approach the Prime Minister office for early resolution of this issue, as this has halted gold’s export and import.

However, MNA Gul Asghar Khan was of the view that such interventions will continue until a legal and viable solution is found to this matter. He proposed the establishment of a Gems and Jewellery Council with legal backing to sort out issues.

“The Committee further expressed dissatisfaction with delays over S.R.O 760, warning against contradictory statements that mislead Parliament. It called for the immediate revival of the notification and recommended the establishment of a dedicated regulatory authority for gemstones and jewellery, citing India and Bangladesh as successful models,” the statement said.

The Committee sought a comprehensive report on the issue of Pakistan Reinsurance Company Limited (PRCL), including the overpayment of Rs 500 million by the former CEO of the Company and the dispute on Shakeel Mangnejo, Special Secretary to the Prime Minister, who continued to attend PRCL Board meetings despite his posting in the Prime Minister office.

MNA Asad Alam Niazi supported the viewpoint of Commerce Minister, Jam Kamal, stating that Shakeel Manjnego should have tendered his resignation from the Board as Commerce Ministry representative after his transfer to the Prime Minister’s office.

The committee decided to discuss the recommendations of the Sub-Committee on Natural Resources, Gemstone, and Sugar in its next meeting.

Convener of both Sub-Committees, PTI MNA Atif Khan has tendered resignation from the membership of the panels as per the party’s decision.

The committee voiced deep concern over Pakistan’s widening trade deficit with China and underscored the urgent need for value addition, institutional reforms, and stronger accountability mechanisms to enhance the country’s export performance.

The Ministry briefed the committee that Pakistan’s imports from China peaked at USD 20.8 billion in 2020–21, against exports of just USD 3.1 billion, with the latest figures (2024–25) showing a persistent imbalance of USD 17 billion in imports versus USD 2.7 billion in exports. Members noted that Pakistan continues to export raw materials like copper and cotton, which return as high-value products, and urged greater focus on value-added production in textiles, minerals, and meat — a sector with an export potential of USD 5 billion.

The Ministry of Commerce informed the Committee that fifteen SPS and TBT protocols have been signed under Phase III of the FTA with China, alongside a list of 700 items for concessions, and initiatives such as a Green Channel at Khunjerab are under consideration. The Committee also called for stronger accountability of trade officials abroad and greater use of international platforms to showcase Pakistani products.

The committee also reviewed Pakistan’s Free Trade Agreements with other countries. On the Malaysia–Pakistan Closer Economic Partnership Agreement (MPCEPA), it noted export growth in seafood, maize, and textiles but expressed concern that upcoming floods may disrupt agricultural output and affect trade performance.

Reviewing the Pakistan–Sri Lanka Free Trade Agreement (PSFTA), members acknowledged its role in expanding bilateral trade by extending concessions on over 80 percent of tariff lines. On the South Asian Free Trade Area (SAFTA), the Committee noted tariff reduction commitments but flagged persistent reliance on sensitive lists.

Members emphasised that Pakistan’s PTAs and FTAs have delivered suboptimal results due to structural issues, including reliance on low-value exports, outdated agreements, domestic productivity constraints, and high energy costs, as well as, technical and non-tariff barriers abroad.

Reaffirming its commitment, the committee stressed that addressing structural flaws, enhancing value-added exports, and strengthening institutional support are essential to enable Pakistan’s business community to compete globally and to secure long-term trade sustainability.

The meeting was attended by MNAs, Dr. Mirza Ikhtiar Baig, Tahira Aurangzeb, Gul Asghar Khan, Farhan Chishti, Ramesh Kumar Vankwani, Asad Alam Niazi, Kiran Haider, and Choudhary Iftikhar Nazir, and senior officers from the Ministry of Commerce, Trade Organisation. The representatives from the KCCI were also present.

Copyright Business Recorder, 2025