KARACHI: The Pakistan Business Council (PBC) has identified 25 products that could help fetch an additional $3.3 billion in exports, and asks the government to strike an FTA deal with China only with a zero-rated facility on its markets for textile items.

An FTA between Pakistan and China has expired, and is now being reconsidered by the two governments. The PBC on the request of federal secretary commerce has placed its proposals for the country’s exports growth to China under the expected FTA.

The council also wants government’s policies to benefit the local industry in the new FTA. It says that the country in trade with China can benefit more in the new trade arrangements if around 25 different of export-oriented products are included in a list for zero-tariff markets.

The products range mainly from finished textile items, agriculture and leather goods. At present, the PBC says, Pakistan’s exports of the identified items to China earn only $946 million. It estimates that the export earnings to China can grow to $3.3 billion if exported under the zero-rated regime.

The largest export product that could help Pakistan earn more in terms of value to China is “semi-milled or wholly milled rice, whether or not it is polished or glazed.” This agriculture item can fetch up to $1.143 billion from the existing $193 million.

Similarly, textile items “men’s and boys’ trousers, breeches, cotton T-shirts, singlets, and vests of cotton, knitted or crocheted” is likely to fetch up to $339 million from existing the $4.60 million. China imposes 8 percent duty on Pakistani import of this item, whereas ASEAN pays no duty on the same commodity to Chinese markets.

“China has placed 65 percent duty on Pakistani rice import while duty on rice import from ASEAN is 35 percent,” PBC CEO Ahsan Malik told Business Recorder on Wideness.

Flaws in the last FTA with China, which ended recently, started in 2006, he said, and it failed to boost up Pakistan’s exports. “These 25 products can help the country augment its trade with China,” he noted.

He also said that Australia and New Zealand are two of those countries whose exports to China enjoy greater duty concessions than those from Pakistan.

“Many products, which the PBC has proposed in the list for new FTA may have been part of the last FTA, but we never negotiated for tariff concession with China,” he said.

He said that the PBC contributes to the government’s economic policies through its proposals.

Export Potential is the additional export that is theoretically achievable for a product.

It however does not take into account freight costs, marketing channels in the export market, consumer preferences among others,

Published in Business Recorder