ISLAMABAD: The Pakistan government is working to introduce an export-oriented policy, which will benefit local industry and producers, and generate employment opportunities.
An assistant chief at the Planning Commission told WealthPK that Pakistan has achieved significant trade partnerships with the help of free trade agreements (FTAs), particularly with China.
“Recently, Pakistan faced high trade deficit which is not in the favour of the country, but the main question is how to improve trade balance in the presence of FTA, and how to get the maximum benefit from trading partners,” said the official who requested anonymity.
“Pakistani exporters do not fully take advantage of the FTA due to a lack of required competence and efficiency to target the Chinese market. Hence, their exports are limited and confined to raw materials like cotton yarn, woven fabric, and grey fabrics instead of value-added products to capture the Chinese market,” he said.
The official suggested that Pakistani exporters should enhance their capacity to export more goods to China and diversify their export basket. “In the competitive world, countries want to get maximum benefit from their trading patterns to attain social and economic development, because in such policies, countries allow their trading partners to import and exports goods and services without any restrictions or duties on the basis of comparative advantage,” he said.
The official said Pakistan needs more focus on export growth and modernisation to match the increasing needs of Chinese customers.
“Most of industries from manufacturing to assembling will be set up in the industrial zones of the China-Pakistan Economic Corridor (CPEC) in different parts of the country. The Pakistani government must address all impediments while making future policies in these industrial zones,” he said.
According to the Consul General of China Li Bijian, more than 300 tariff-free commodities are now allowed to enter China, which is significant progress towards the Chinese government’s aim of reducing trade imbalance.
“In recent days, bilateral trade has grown very fast. We want to balance the trade, but it is not working as we wished even though the two governments have upgraded the FTA,” he said.
Pakistan’s exports to China in June 2022 increased by 8% to $251.30 million as compared to the corresponding month of 2021 when it was recorded at $232.74 million.
In June 2022, Pakistan’s imports from China decreased by 14% to $1.625 billion compared to $1.894 billion in June 2021. This is a good sign for Pakistan to reduce its trade deficit.
-INP
