Press Coverage

PRESS RELEASE

FTA’s are Harming Local Industry: APBF

February 28, 2015

“Lahore (Press Release) – The All Pakistan Business Forum Executive Committee, which met Friday with its President Mr. Ibrahim Qureshi in the chair, raising serious concern, observed that the FTA’s signed with Malaysia, Sri Lanka and China without taking the real stakeholders on board is damaging the local industry.

As the country’s economic managers are engaged in fresh rounds of talks with a number of countries on Free Trade Agreements, the APBF Executive Committee cautioned the government to take business community on board while finalizing trade deals with other countries.

APBF President Ibrahim Qureshi, addressing the meeting, said the business community is the real stakeholders which should be consulted in preparing policies to enhance exports so that fast widening trade deficit could be diminished, which is prerequisite for economic growth.

The APBF has been receiving complaints from its members about the dumping of Chinese products. Ibrahim Qureshi remarked that dumping is the main concern of local industries, particularly of steel products, polyester staple fiber and many other products, he said.

At present, the balance of trade is in favour of China as against exports of $2.5 billion, Pakistan imported products of $7.5 billion from China. He added that Pakistan had been continuously suffering a loss of Rs.22 billion on account of tax exemptions granted to imports from China.

Free trade access to China could not be fully utilized in favor of Pakistan, because Beijing did not reduce duties on products where Pakistani sectors enjoyed a competitive advantage. Moreover, the margin of preference over other countries that Pakistan should have enjoyed effectively turned to be fruitless when China inked similar free trade accords with other countries, particularly with the Association of Southeast Asian Nations (ASEAN).

An eexecutivecommittee member pointed out that the leather industry is still paying around

9% import duty on its export goods to China owing to non-implementation of zero-duty under FTA regime. He said that in second phase of FTA 9% duty was to be reduced to zero, which is not being implemented so far because Pakistani government is not supporting its industry to pursue the case for the last two years, he complained.

APBF President also criticized Free Trade Agreement with Malaysia, failing to provide a level-playing field as trade balance remained in Favour of Malaysia from day one. During first quarter of last fiscal, Pakistan’s exports stood at mere $0.2 billion against imports of $1.75 billion, implying that trade balance was $1.55 billion in favor of Malaysia.

Mr. Ibrahim Qureshi, quoting statistics said that in April 2014, Federal Board of Revenue (FBR) announced tariff concessions on the import of 993 items from Sri Lanka under a Free Trade Agreement (FTA). Pakistan’s exports to Sri Lanka dropped from $347.7 million to $300 million during last couple of years. Sri Lanka allocated Pakistan a duty-free quota of 6,000 metric ton of basmati rice and 1, 000 metric tons potatoes per annum. However, Sri Lanka continued to create hurdles on our exports on the excuse of low quality of Pakistani basmati rice.

Pakistan’s major exports to Sri Lanka include woven cotton fabrics, cement, sugar, wheat, medicament mixtures, tubes and pipes of iron and steel, potatoes, rice, cotton yarn, and onions etc. The APBF Executive body agreed that international image building is the need of the hour with complete overhauling of TDAP, besides formation of new trade specific export promotion agencies having independent budgets and policies.

M. Ibrahim Qureshi

President APBF