ISLAMABAD – Pakistan, under the second phase of Free Trade Agreement (FTA) with China, would avail duty-free market share equivalent to the share already enjoyed by the countries of Association of East Asian Nations (ASEAN) from China.
The revelation was made by Advisor to Prime Minister on Commerce, Textile, and Industry Abdul Razak Dawood on Tuesday while briefing the Senate Standing Committee on Commerce and Textile here at the parliament house.
Dawood told media he was going to China along with Prime Minister Imran Khan where Pakistan and China would sign FTA-II on April 28.
“Although it took a long time to finalize the second phase of FTA, but I would like to appreciate the Chinese government’s support in this regard,” he said.
The advisor informed that under the duty-free incentive package of US$1 billion offered by China, Pakistan has so far exported 150,000 tons of sugar to China while the export of 200,000 tons of rice would be completed by June this year.
Dawood said China had extended a duty free package for export of rice, sugar, and 350,000 tons of cotton yarn to Pakistan.
Chairman of the committee Mirza Muhammad Afridi was of the view that local textile industry would be affected with exports of such a high amount of yarn as the price of the product would go high as a result.
The Advisor said Pakistan produced huge amount of cotton yarn so there would not be any such issue adding that the textile sector related industries were now giving good results as even the closed factories had now start production so it is hoped that the textile sector export would go up in the coming days.
Talking about the performance of textile sector, Senator Shibli Faraz said the sector had become a spoiled child by getting unnecessary subsidies.
He said the productivity, efficiency, and quality of the textile was not up to the mark despite getting huge subsidies and the average monthly textile export never exceeded $1.2 billion for last 20 years.
Admitting Shibli Faraz’ stance, the Advisor said textile needed assistance around 15-20 years ago but now there was no need to offer any subsidy to this sector.
However, Dawood was of the view that the garment industry needed support owing to high prices of the land, therefore the government was mulling over extending long term financing to the garment manufacturers to purchase land and buildings to establish their industries.
Dawood informed, the government was engaged with Japan for purchase of modern textile machinery, hoping that in six months’ time, an agreement would be finalized in this regard.
Nauman Wazir suggested that the government should conduct value chain analysis in this sector to find out reasons of decreasing trend of textile export.
He said the commercial councilors appointed abroad should also be taken to the task and should be made bound to give feedback from their respective countries to find out the potential markets in various parts of the world.
Dawood said “if we want to boost our exports beyond $50 billion level, we must have to look areas other than textile”.
He said the engineering sector having a market share of over $4 trillion across the globe can help Pakistan in increasing its exports to the desired level.
Senator Nauman Wazir pointed out that the government should get assurance from the Chinese side that it would not impose non-tariff barriers on imports from Pakistan.
Dawood said all such matters had already been discussed with China and he would further talk to Chinese authorities to get such assurance.
