Islamabad: Pakistan is losing its margin of preference in the wake of free trade deals signed by China with different countries, especially the member states of Asean grouping, after a similar agreement with Pakistan.
The concern was raised on Monday at the start of the fifth round of negotiations for the second phase of the Pakistan-China Free Trade Agreement held to define accepted standards for trade between the two countries.
The talks are aimed at assessing the performance of economies of the two sides under the trade agreement, signed in 2006, and proposing necessary changes for mutual benefit.
Pakistan’s delegation for the three-day talks was headed by Ministry of Commerce Additional Secretary Robina Ather and comprised officials of the Federal Board of Revenue, Ministry of Industries, Ministry of Textile Industry and Ministry of National Food Security and Research.
The Chinese team was led by Yao Wenliang, Deputy Director General of the Ministry of Commerce. Other delegates included officials from the Ministry of Industry and Information Technology, Ministry of Finance, Ministry of Agriculture and departments of customs and quality supervision.
An official of the commerce ministry said China had negotiated low tariffs with the nations it had inked FTAs after Pakistan and the ministry was now also seeking to revise the previous deal with Beijing with further tariff cuts.
On the first day, the two sides discussed diverse issues such as tariff reduction modalities, trade in services and enhancing cooperation for investment in different fields. They also talked about sanitary and phytosanitary rules and technical barriers to trade, electronic data sharing and customs-related matters. Other obstacles to trade also came up for review.
Pakistan underlined the need of boosting exports to China by encouraging all sectors that fell within the purview of FTA and sought to enhance facilities and concessions on high value-added products.
Pakistan’s lead negotiator Robina Ather said the two countries had already agreed to revise tariff modalities according to which Pakistan would not offer China all those concessions that would be provided by the latter.
She said it would also not be necessary for Pakistan to give concessions in the areas where it had given its consent in the previous FTA. Apart from this, Pakistan can withdraw the concessions in certain sectors offered previously.
According to her, there was zero tariff on certain Pakistani commodities but the facility could not be utilised and could be replaced with a new one comprising products that have a good potential for exports to China.
Earlier, in the fourth round of talks, the two countries made a big headway in the banking sector and agreed to ease the conditions for opening bank branches in each other’s territory.
For setting up a branch, the asset requirement will be reduced to $15 billion from $20 billion for all Pakistani banks at the end of the year prior to the submission of an application.
These banks can also run their operations in Chinese currency renminbi after one year of opening in China, down from the previous condition of three years. The requirement of being profitable for two consecutive years prior to the application has also been removed.
