Pak-China ties: Exporters aim to reduce trade imbalance

Local textile exporters to make list of zero-rated products for next stage of free trade agreement talks.

Express June 14, 2011


The Trade Development Authority of Pakistan (TDAP) has asked local textile exporters to make a list of zero-rated products for the next stage of free trade agreement talks with China in order to balance its trade with the export giant.

Chief Executive of TDAP Tariq Iqbal Puri in a meeting on Tuesday with exporters decided to come up with a list of new products by month-end. Zero-rated products are those that are subject to no value-added tax when sold.

Industrialist Mirza Ikhtiar Baig on the occasion said that Pakistan’s share is just $1.5 billion from the annual trade of $8.5 billion between China and Pakistan. Puri urged exporters to list down products that can compete internationally and have surplus production in the country in order to decrease trade imbalance with China.

TDAP also asked other associations to send their suggestions to speed up preparations for the free trade agreement talks with China. TDAP plans to send its suggestions to ministry of commerce and hope that the new list will be added in the final list of products by January 2012.

Chinese premier Wen Jiabao on his recent visit to Pakistan assured to help increase Pakistan’s exports to China to reduce the trade imbalance which is heavily in favour of China.

Published in The Express Tribune, June 15th, 2011.


Ahmed | 10 years ago | Reply Mr. Puri: 1) Socks 2) basic T-shirts. Socks: Pakistsan can export to CHina about 100 milloion dozen dozens by 2015 earning Pakistan about $400 million. While CHina excells in high end socks, companies like Gildan (worl's largest sock maker), Renfro and Hanes want to sell to China basic 108 needle cotton socks for the masses (like they do in America). And tyhey would buy these socks for their brands from Pakistan and sell it to China. Basic T-shirts. Companies like Gildan are selling basic T-shirts from Honduras to China. If Pakistan gets zero duty, Pakistan can export 50 million dozen T-shirts to CHina and generate $600 million in exports. I know for sure because I am involved in both of these products. The day Pakistan gets free trade with China in these two products, Pakistan would create almost 600,000 good paying jobs.
Dr. Ehtisham Ahmad | 10 years ago | Reply All exports are zero-rated under the GST, or the VAT which is in operation in China. Domestic zero-rating to support an industrial sector is not practiced in any country, certainly not in China. It might be seen as an indirect subsidy to an export sector, and could be claimed as an unfair advantage by the Chinese trading partners in negotiations with Pakistan. Indeed, it may violate WTO rules as a back-door mechanism to provide subsidies to export sectors. Dr. Ehtisham Ahmad LSE and Bonn
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