Page 13 - April-May-2020

tures complained about the unbalance in the
exports to China as the second phase of the Free
deal, especially the textile sector which raised
Trade Agreement (FTA) between China and
Pakistan will offer the same tariff concessions
concerns about the favours it granted the
Chinese textile industry. They believed that the
enjoyed by the ASEAN countries.
FTA was damaging the local industry and giving
The agreement covers 313 tariff lines of US $8.7
undue advantage to the Chinese. The govern-
ment took note of the demands by the industry
billion Pakistan's overall exports and US $64
as they pointed out that during the first phase,
billion of China’s global imports. Textile and
tariffs were imposed on Pakistani textile exports.
garments sector is at the forefront of this deal
At the same time, they complained that the
and will help enhance the sector’s exports to
country’s competitors from the ASEAN had duty
China as it offers the same duty free access to
ASEAN countries.
free access to the Chinese market.
The agreement is already bearing fruits as the
To fix this disparity, the Pakistani government held
several rounds of negotiations with their Chinese
Indian yarn exports dropped more than 38
counterparts and now hope that the second
percent for the first six months of the current
phase of the FTA would overcome the concerns
fiscal year. According to reports in the Indian
of the local manufacturers and increase exports.
press, the cotton yarn exports between April and
September of this year dropped from US $2.08
As a counter-measure, the sensitive list had been
billion to US $1.27 billion compared to the same
increased from 10% to 25%, totaling 1760 tariff
period from last year.
lines and covers 37% of Pakistan's imports from
China. This, the two sides hope, will give protec-
tion to Pakistani industry from Chinese import,
The Indian report cited the FTA’s second as a
and the textile and garments sector is a major
major reason for the decline as it said that the
beneficiary of this sensitive list. Whereas, the
India did not enjoy the same tariff free access to
the Chinese market, whereas India had to pay 3.5
tariffs from the industry had also been lifted to
increase the export of the sector. The Chinese
to 5 percent tariffs.
side also agreed to immediate market access on
The full effects of the second phase of the FTA
its priority products, tariff reduction and measures
could be gauged after the deal comes into effect
for protection of the domestic industry on
from December 1, which would boost the exports
Pakistan’s request.
of Pakistani products to the Chinese market.
The first phase of FTA between China and
Earlier in the month, Abdul Razak Dawood,
Adviser to the Prime Minister for Commerce,
Pakistan was signed on November 24, 2006 and
Textile, Industry & Production and Investment,
became operational in 2007. The negotiations for
announced that the second phase would come
the second phase began in 2011 and after eleven
rounds, both sides signed the agreement in April
into effect from December 1 and it was becoming
operational earlier than usual. He said that it
of 2019 in Beijing.
usually took a year to make such agreements
operational between countries but because of the
Now, the second phase is about to take effect
which is already showing some positive signs.
special relations enjoyed by both the countries.
12 16 The textile sector of Pakistan will get a boost in During the first phase of the FTA, local manufac-
Cotton season 2018/19 featured:
Quaid-e-Azam Apparel Park
Rollercoaster prices, with decreasing
project to promote textile sector
production, area and yields
Punjab Minister for Industries & Trade, Mian Aslam Iqbal has said that the Quaid-e-Azam Apparel Park is very
important for the promotion of textile sector and enhancing exports.
After a few years of relative calm, world agricultural
He stated this while presiding over a meeting at Civil Secretariat during which pace of work on the
markets face policy uncertainty and trade tensions: ICAC
Quaid-e-Azam Apparel Park Project and business model were reviewed. Chairman Punjab Industrial Estate
Development and Management Company, officers of Industry department and PIEDMC attended the meeting.
Highlights from the latest ‘Review’ regarding the Weakening economic growth amidst trade issues set
While addressing the meeting, Mian Aslam Iqbal said that economic and trade activities will also increase by
2018/19 season include: Global area decreased by the environment for a decrease in consumption with
implementing this project. He said this project will be completed in four phases and it will be completed as
1% to 32.6 million hectares (ha) and yield declined a near 1% loss to 26.2 million tonnes. With
early as possible. He said that this project is already very late, now further delay will not be tolerated.
2% to 790 kg/ha; World production slipped 3% to consumption exceeding production, global ending
25.7 million tonnes; More than half of global stocks stocks for the season decreased by 2% to 18.3
(52%) are now being held outside of China. million tonnes.
Global stocks at the start of the 2018/19 season were As ending stock levels in China lowered, the ratio of
1% higher than the previous season at an estimated stocks held in China and stocks held outside of
Senate committee for bringing
18.7 million tonnes. At 84 cents per pound, the China inverted with 52% of global stocks now being
international reference price of cotton was lower than held outside of China. Trade in cotton lint increased
the previous season’s ending average of 88 cents by 2% to 9.2 million tonnes with the USA, Brazil, West
back Cotton Research Centre
per pound. Africa and Australia leading in global exports.
After a 99.5 cent per pound price at the start of the New uncertainties have emerged in addition to the
under Textile Ministry
season, prices fell throughout the year. Global area usual risks facing agriculture. Following several years
under cotton decreased by 1% to 32.6 million of relatively calm market conditions, world
hectares. Global yield decreased slightly by 2% to agricultural markets today face mounting risks,
790 kg/ha but remained above the ten-year average including policy uncertainty from trade tensions.
Open, transparent and predictable trade is important
Senate Standing Committee on Commerce and
of 776 kg/ha. As a result, global production still producing raw cotton in bulk which does not
for the cotton market and its role as an important
Textile Industry in its meeting has recommended to
decreased by 3% to 25.7 million tonnes. have high quality.
bring Pakistan Cotton Research Centre back under commodity in the global economy.
the control of Textile Industry Division from Ministry Pakistan is at 5th place in cotton production in the
of National food Security & Research since the world but it has failed to benefit from it production
Textile Industry division is a more relevant ministry to as much as much smaller countries are benefitting.
APTMA demands textile policy capable of doubling exports
oversee cotton research. The meeting was held The Committee directed the ministry to conduct a
under the Chairmanship of Senator Mirza Muham- tracers study of Bangladeshi and Vietnamese textile
mad Afridi at the Parliament House and was production and export policy and submit to the
APTMA Chairman Amanullah Machera said that textile exports in the next five years.
committee.
attended among others by Senators Nauman Wazir
Pakistani exporters are facing stiff competition from
Khattak, Ghous Muhammad Khan Niazi, Syed Shibli
Bangladesh and Vietnam. The chairman was of the APTMA officials informed that 70 percent of the textile
The Committee also asked the ministry to share the
Faraz, Atta ur Rehman, Dilawar Khan, Ahmed Khan,
view that Pakistan can counter the competition only industry is in Punjab, where more than 100 mills have
draft of new textile policy with the Committee once it
Secretary Commerce Mohammad Younus Dagha,
after exporters get a five year textile policy at hand, been closed due to poor energy policies of the
Secretary Textile Industry Syed Iftikhar Babar,
is made so that meaningful inputs can be given.
so they know what will be the tax rates and energy previous governments.
The Committee also held a detailed discussion on
Chairman Intellectual Property Organisation (IPO)
prices. the performance of IPO.
Mujeeb Ahmed Khan, Rector National Textile
University Dr. Tanveer and officials from the ministry. The previous textile policies have not been much of a
Meanwhile, APTMA Punjab Chairman Adil Bashir has success story, as the Textile Policy 2014-19 failed to
The need to ease the process of registration of
said that the government needs to announce a long achieve all its targets including doubling value
The Committee meeting held thorough discussion
patent, trademark, copyright was also discussed
term and comprehensive textile policy if it wants to addition from $1 billion per million cotton bales to $2
while at the same time having effective mechanism
on the current performance of textile sector. The
see a return of capital investment in the country. The billion per million cotton bales, increasing textile
to deal with people involved in using or copying
Committee was told that the world has now moved
APTMA Punjab Chairman added that if government exports from $13.1 billion to $26 billion as well as
fake Names.
from raw cotton to synthetic cotton but Pakistan is
accepts this demand, they are capable of doubling creation of 3 million jobs in five years.
April/May 2020
October/November 2019