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Pakistan still pays 9pc duty on leather export to China under FTA regime

The Nation, Pakistan

Pakistan still pays 9pc duty on leather export to China under FTA regime

12 May 2014

By Salman Abduhu

LAHORE-Pakistan is not benefiting from Free Trade Agreement with China, as the leather industry is still paying around 9 per cent import duty on its export goods to China owing to non-implementation of zero-duty under FTA regime.

“With a view to enhance bilateral trade, Pakistan and China, around 7 years back, had signed an FTA under which both the countries decided to facilitate each others exporters, exempting duty on their export. This was stated by the Pakistan Tanners Association central chairman Sheikh Saqib Masood while talking to Commercial Counselor of China, Mr. Yan Jianming who along with Mr. Xu Runtao, visited PTA’s Central Office, Karachi.

Sheikh Saqib said that in first stage, import duty on Pakistani leather export to China was reduced to 9 per cent from 14 per cent but in second stage this 9 per cent duty was to be reduced to zero some two years ago, which is not being implemented so far, he complained. “Chinese authorities are creating hurdles in the way of Pakistan leather export to China on zero-duty under FTA regime and Pakistani government is also not supporting its industry to pursue the case for the last two years. On the other hand, Chinese companies are exporting several goods including leather and textile machinery to Pakistan on zero-duty under FTA regime.”

The Chairman, PTA, Mr. Saqib Massood brought into the notice of Chinese officials the core issue of leather sector to ensure implementation of zero rating import of Pakistani finished leather to China as already agreed under FTA made with China.

Executive committee members of PTA North Zone Muhammad Musaddiq, Agha Saiddain and Shahid Usman were also shared views thru video link. Mr. Yan Jianming, on this occasion, assured the PTA of full support to provide relaxation to the exporters under the FTA regime, besides having coordination with Visa Section to issue visa to PTA’s members on PTA’s recommendation. Mr. Gulzar Firoz, Chairman, Standing Committee on Diplomatic Affairs, PTA said that the China is tested friend of Pakistan and always provided supporter through every platform. He hailed China for allowing free booths to PTA’s members by the Chinese Government/Commercial Section for its members’ participation in any Potential Leather Events in China.

Sheikh Saqib Masood addressing the meeting said that the leather sector is facing stagnation and its exports, which have declined by more than 14 per cent during the last five years from $1.22 billion in fiscal year 2007-08 to $1 billion in 2012-13, mainly due to energy crisis and frequent loadshedding of electricity and gas.

He explained in detail that leather processing is continuous process industry and electricity shut downs not only cause serious damage to leather in process but also have adverse effects on its quality. Due to this serious problem the leather sector is facing stagnation in its growth for last 5 years, he added. “The major reason for decline in growth of this second largest export sector was mainly due to energy crisis and frequent load shedding of electricity and gas.