Pakistan raised the difficulties its local industries have in exporting to China despite reduced tariffs, during recent discussions on the performance of the Pakistan-China Free Trade Agreement (PCFTA).

The PCFTA has been in operation since 2006, and the latest meeting was discussing its next phase, which had been expected to produce a further round of import duty reductions. However, Pakistan's Government is resisting talk of further tariff concessions until its concerns are addressed.

At the beginning of the meeting, Pakistan's delegation pointed out that the benefits of the PCFTA, to date, have been minimal. It was noted that its local industries have been unable to compete effectively, in both Pakistan and China, with cheaper Chinese products, while the Government has had to suffer reduce tariff revenues due to the operation of the agreement.

There was also concern expressed over the effect of the preferential terms granted in China's FTAs with other countries, especially the Association of Southeast Asian Nations economies.

The Government is therefore said to be looking for China to assist Pakistan in broadening its export base, by encouraging value-added exports from all those industrial sectors that have, so far, been unable to benefit from the PCFTA. In the meantime, it is expected to resist, for example, a further general relaxation of import duties, but may only agree to reductions on selected products.

Source: Tax News

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