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FTA to help boost exports to China, Malaysia

The News International, Pakistan

FTA to help boost exports to China, Malaysia

By our correspondent

27 March 2008

KARACHI: Head of World Trade Organisation (WTO) Cell, Trade Development Authority of Pakistan (TDAP), Mujeeb Ahmed Khan has said that with the help of Free Trade Agreements (FTA), exports to China are expected to reach US$4.5 billion by 2012 and to Malaysia $1.8bn by 2015.

He said that these figures are based on traditional products that are exported to the two countries from Pakistan, while non-traditional commodities remain untouched due to lack of awareness and marketing.

He said this during a seminar on “Exploring Pakistan’s Export Potential in China and Malaysia in the context of Free Trade Agreements,” organised by TDAP’s WTO Cell in collaboration with Karachi Chamber of Commerce and Industry (KCCI) on Tuesday.

Presenting statistics of Pak-China bilateral trade, Khan said that an encouraging growth of about 25 per cent per annum during the last four years had been witnessed. However, the balance of trade remains in favour of China, which reached $3.23bn in 2006, designating China as the largest import destination of Pakistan, he added.

Khan said that out of 6,803 items, 2,423 items will be zero-rated within three years, while tariff rate for another 1,338 items would be lowered to 5 to 0 per cent within five years. This means that within the next five years, 56.5 per cent of export items from China would have greater market access in Pakistan.

He added that tariff reduction modality provided by Pakistan also comprises 1,925 items in the sensitive track list, out of which 157 items have been declared highly sensitive by China, while 1,768 items falling under sensitive track two, constitute 26 per cent of the total items.

“These items have been given reduction on the basis of margin of preference by 50 and 20 per cent respectively, whereas the rest of the 15 per cent items have been fully protected as they have not been given any concession,” he informed.

Speaking about trade relations with Malaysia, Mujeeb Khan said that a potential import market of $131.13bn was available with Pakistan. He said that palm oil constituted 50 per cent of the total exports from Malaysia to Pakistan, due to which the balance of trade remained in favour of Malaysia.

Regarding Malaysian products, he said that out of 97 items under core category, only seven items have been placed in fast track, while 75 items have been placed in the category of normal track, which means that most of the items would get zero-rated tariff by 2012.

“The indicative potential of top-20 export items has been estimated at $414 million. It is expected that the concessions given under FTA will help tap the indicative potential with greater pace. The total indicative potential for Pakistan’s export products in Malaysian market has been estimated at $1.17bn against the present level of only $54 million,” added Khan.