Islamabad: Pakistan and China have agreed to establish an electronic data interchange system for bilateral trade before the end of this year in an effort to address the issues of misreporting and under-invoicing.
They reached the decision during the fifth round of talks under second phase of the China-Pakistan Free Trade Agreement (FTA), which ended here on Wednesday.
Chinese Ministry of Commerce Deputy Director General Yao Wenling and Ministry of Commerce Additional Secretary Robina Ather led their respective delegations during the three days of deliberations.
While discussing the tariff reduction modality, Pakistan outlined its earlier stance that the second phase of the FTA should be based on the principle of less-than-equal reciprocity in favour of Pakistan.
This suggests that China will give such tariff concessions to Pakistan that it has offered to other trading partners. Also, Pakistan may be allowed adequate time for a reasonable reduction in tariffs keeping in view the prevalent condition of domestic industry.
“There is progress on establishing an electronic data interchange system and Chinese customs officials will arrive in the current or next month to finalise the mechanism,” said Robina Ather. “This is a big achievement; it will remove discrepancies in trade figures due to under-invoicing and misreporting.”
Calling the FTA a sensitive issue that would take more time before finalisation, she said the next round of talks would be held in Beijing anytime in October. “We are analysing things deeply how the tariff could be reduced,” she remarked.
According to the Ministry of Commerce, the Chinese delegation shared a preliminary list of sectors and sub-sectors for evaluation by Pakistan in order to enhance trade in services under the FTA.
China is seeking to deepen cooperation in the services sector including architectural, engineering, medical and dental services, advertising and courier services, tourism and travel, recreational, cultural and sporting services. This proposed liberalisation will allow a robust growth in trade in services between the two countries.
According to a statement issued by the Ministry of Commerce, both sides reviewed and expressed satisfaction with the progress made by the working group of customs officials that was dealing with the electronic data interchange-related issues.
They decided that the data-sharing system would be put in place on both sides before the end of the year.
Matters pertaining to sanitary and phyto-sanitary rules and technical barriers to trade also came up for review. Regulatory and monitoring authorities of both countries will work more closely on the sanitary regulations.
According to sources, the low tariff rates set under the FTA are causing a revenue loss of Rs22 billion to Pakistan annually and the country wants to address the problem by renegotiating the trade accord.
However, senior officers in the Ministry of Commerce said though the low tariffs led to the revenue loss, these benefitted the consumers and producers, who were receiving cheap consumer goods and raw material from China.
