KARACHI – China has refused the grant of trade concessions on almost 268 export products to Pakistan. Islamabad had proposed concessions in order to minimise the huge trade deficit. Rejecting Pakistan’s demands, China explicitly said that similar concessions could only be given to the Least Developed Countries (LDCs), sources told Pakistan Today. China, last year, granted duty free access on 4,762 products to 33 LDCs, majority of which are in Africa. However, at least three are from South Asia including Bangladesh, Nepal and Afghanistan.
The neighbouring country has, though, responded positively to Pakistan’s demand of including new items in the existing Pak-China FTA under the existing duty criteria, sources claimed. Following the Chinese denial to accept the first demand made by Islamabad which was aimed to lower the trade deficit of the country with China, Pakistan demanded the neighbouring country to accommodate over 250 products from Pakistan in the FTA. Pakistan is looking to rationalise the bilateral trade, which, currently, is highly in favour of China. The over 250 products, proposed by Pakistan, mostly includes fish products, milk and dairy products, vegetables, fruits fresh and dried, chicken items, papers, and those textile items which the foreign country does not import from Pakistan.
The list of products, sources said, also included items which China generally imports from ASEAN countries.The trade volume, after the FTA, has swelled to over $8.0 billion, out of which Pakistan has a meager share of $1.5 billion. Interestingly, while unilateral trade concession to Pakistan proposed by European Union is facing acute uncertainty in World Trade Organisation (WTO) following strong resistance from India, Sri Lanka and Peru; trade concessions demanded by Islamabad was also denied by China. According to sources, China has accepted the list 268 items to be included in the FTA and the matter would be discussed between two sides within the next three months, probably in June 2011.
It is worth mentioning that, in the first round of the Pak-China FTA negotiations for the second phase of tariff concessions held recently, the Chinese side was led by Trade of China Deputy DG Zhu Hong, while Pakistan was led by Senior Joint Secretary Commerce Himayat Ullah Khan. Talking to the foreign delegation, Federal Minister for Commerce Makhdoom Amin Fahim had said that stake holders were mainly concerned about the growing trade deficit with China.
Zhu Hong, leader of the delegation, had reiterated Chinese support in the fields of trade and economy. The first phase of FTA will come to an end by the end of 2012. FTA negotiations, for the first phase, concluded in 2006, and the agreement was signed in November 2006. Both sides notified tariff concessions from July 01, 2007 in the first phase of tariff reduction.
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