(Karachi P.R. 20th June, 2016) FPCCI has asked the stakeholders to submit their views regarding adverse effects of Pakistan - China Free Trade Agreement (FTA) and duty free imports from China. A circular letter issued from the office of Director General R&D Department of FPCCI to all members and members of Pak China Business Council of FPCCI inviting them to submit their views on the adverse impact of Pak – China FTA on Pakistan’s economy.
The circular further informed that the increase in the import from China has created adverse effects on the trade balance of the country. It has been argued from the stakeholders that domestic industries of Pakistan are at risk of being wiped out due to cheap Chinese products availability in the country under FTA. They said that bilateral trade between Pakistan and China under FTA reveals that before implementation of FTA the Trade balance of Pakistan with China was US$2.95 billion in favour of China in 2007, which has now increased to US$ 14 billion and again in favour of China in 2015. Pakistan’s exports to China was US$575 million in 2007 which has now increased to US$ 2.5 billion while imports from China to Pakistan was US$ 3.53 billion in 2007 which has now increased to US$ 16.48 billion in 2015.
The revision of the FTA between the two countries, we have to start the process of preparing the negative item list which tend to include items those should not be allowed or to be imported from China under Duty free arrangements to safeguard our local industries from curbing, stated in the circular
FPCCI further ask for the attention towards the importance of revised FTA which will be accompanied by China-Pakistan Economic Corridor (CPEC) may cover Import / Exports of Services which include health, education, insurance and travelling, transportation, banking& financial services. Furthermore, it is stated in the circular that the situation may lead to the competition in services sector whereas China’s economy has competitive edge on account of low interest rate, cheap electricity and economies of scales, the Chinese Entrepreneurship and Investment in services sectors may create difficulties for Pakistani businesses in these sectors.