Page 35 - February-March-2020

During the first phase of the FTA, local manufac-TA, local manufac-
The textile sector of P
tures complained about the unbalance in the
tures complained about the unbalance in the
exports to China as the second phase of the F
exports to China as the second phase of the Free ree
deal, especially the textile sector which raised
deal, especially the textile sector which raised
T
Trade Agreement (FTA) between China and rade Agreement (FTA) between China and
concerns about the favours it granted the
concerns about the favours it granted the
P
Pakistan will offer the same tariff concessions akistan will offer the same tariff concessions
enjoyed by the ASEAN countries.
enjoyed by the ASEAN countries.
Chinese textile industry. They believed that the . They believed that the
Chinese textile industry
F
FTA was damaging the local industry and giving TA was damaging the local industry and giving
The agreement covers 313 tariff lines of US $8.7
undue advantage to the Chinese. The govern--
The agreement covers 313 tariff lines of US $8.7
undue advantage to the Chinese. The govern
billion Pakistan's overall exports and US $64 akistan's overall exports and US $64
billion P
ment took note of the demands by the industry
ment took note of the demands by the industry
as they pointed out that during the first phase,
as they pointed out that during the first phase,
billion of China’s global imports. Textile and extile and
billion of China’s global imports. T
tariffs were imposed on P
tariffs were imposed on Pakistani textile exports. akistani textile exports.
garments sector is at the forefront of this deal
garments sector is at the forefront of this deal
At the same time, they complained that the
At the same time, they complained that the
and will help enhance the sector’s exports to
and will help enhance the sector’s exports to
country’s competitors from the ASEAN had duty
country’s competitors from the ASEAN had duty
China as it offers the same duty free access to
China as it offers the same duty free access to
free access to the Chinese market.
free access to the Chinese market.
ASEAN countries.
ASEAN countries.
To fix this disparity, the Pakistani government held o fix this disparity, the Pakistani government held
T
The agreement is already bearing fruits as the
The agreement is already bearing fruits as the
Indian yarn exports dropped more than 38
Indian yarn exports dropped more than 38
several rounds of negotiations with their Chinese
several rounds of negotiations with their Chinese
percent for the first six months of the current
counterparts and now hope that the second
counterparts and now hope that the second
percent for the first six months of the current
fiscal year
fiscal year. According to reports in the Indian . According to reports in the Indian
phase of the FTA would overcome the concerns TA would overcome the concerns
phase of the F
press, the cotton yarn exports between April and
press, the cotton yarn exports between April and
of the local manufacturers and increase exports.
of the local manufacturers and increase exports.
As a counter
As a counter-measure, the sensitive list had been -measure, the sensitive list had been
September of this year dropped from US $2.08
September of this year dropped from US $2.08
increased from 10% to 25%, totaling 1760 tariff
increased from 10% to 25%, totaling 1760 tariff
billion to US $1.27 billion compared to the same
billion to US $1.27 billion compared to the same
lines and covers 37% of P
lines and covers 37% of Pakistan's imports from akistan's imports from
period from last year..
period from last year
China. This, the two sides hope, will give protec
China. This, the two sides hope, will give protec--
tion to Pakistani industry from Chinese import, akistani industry from Chinese import,
tion to P
The Indian report cited the F
The Indian report cited the FTA’s second as a TA’s second as a
and the textile and garments sector is a major
and the textile and garments sector is a major
major reason for the decline as it said that the
major reason for the decline as it said that the
beneficiary of this sensitive list. Whereas, the
beneficiary of this sensitive list. Whereas, the
India did not enjoy the same tariff free access to
India did not enjoy the same tariff free access to
the Chinese market, whereas India had to pay 3.5
the Chinese market, whereas India had to pay 3.5
tariffs from the industry had also been lifted to
tariffs from the industry had also been lifted to
increase the export of the sector. The Chinese . The Chinese
increase the export of the sector
to 5 percent tariffs.
to 5 percent tariffs.
side also agreed to immediate market access on
side also agreed to immediate market access on
The full effects of the second phase of the F
The full effects of the second phase of the FTA TA
its priority products, tariff reduction and measures
its priority products, tariff reduction and measures
could be gauged after the deal comes into effect
for protection of the domestic industry on
for protection of the domestic industry on
could be gauged after the deal comes into effect
Pakistan’s request. akistan’s request.
P
from December 1, which would boost the exports
from December 1, which would boost the exports
of Pakistani products to the Chinese market. akistani products to the Chinese market.
of P
The first phase of FTA between China and TA between China and
The first phase of F
Earlier in the month, Abdul Razak Dawood,
Earlier in the month, Abdul Razak Dawood,
Pakistan was signed on November 24, 2006 and akistan was signed on November 24, 2006 and
P
Adviser to the Prime Minister for Commerce,
Adviser to the Prime Minister for Commerce,
became operational in 2007. The negotiations for
became operational in 2007. The negotiations for
T
Textile, Industry & Production and Investment, extile, Industry & Production and Investment,
the second phase began in 2011 and after eleven
announced that the second phase would come
announced that the second phase would come
the second phase began in 2011 and after eleven
into effect from December 1 and it was becoming
into effect from December 1 and it was becoming
rounds, both sides signed the agreement in April
rounds, both sides signed the agreement in April
operational earlier than usual. He said that it
of 2019 in Beijing.
of 2019 in Beijing.
operational earlier than usual. He said that it
usually took a year to make such agreements
usually took a year to make such agreements
Now, the second phase is about to take effect , the second phase is about to take effect
Now
operational between countries but because of the
operational between countries but because of the
special relations enjoyed by both the countries.
special relations enjoyed by both the countries.
which is already showing some positive signs.
which is already showing some positive signs.
16 The textile sector of Pakistan will get a boost in akistan will get a boost in During the first phase of the F
34
Cotton season 2018/19 featured:
Rollercoaster prices, with decreasing coaster prices, with decreasing
Roller
production, area and yieldsoduction, area and yields
pr
After a few years of relative calm, world agricultural ter a few years of relative calm, world agricultural
Af
markets face policy uncertainty and trade tensions: ICACtainty and trade tensions: ICAC
markets face policy uncer
W
Highlights from the latest ‘Review’ regarding the
Highlights from the latest ‘Review’ regarding the Weakening economic growth amidst trade issues set eakening economic growth amidst trade issues set
2018/19 season include: Global area decreased by the environment for a decrease in consumption with
the environment for a decrease in consumption with
2018/19 season include: Global area decreased by
1% to 32.6 million hectares (ha) and yield declined a near 1% loss to 26.2 million tonnes. W
a near 1% loss to 26.2 million tonnes. With ith
1% to 32.6 million hectares (ha) and yield declined
consumption exceeding production, global ending
2% to 790 kg/ha; World production slipped 3% to orld production slipped 3% to
2% to 790 kg/ha; W consumption exceeding production, global ending
25.7 million tonnes; More than half of global stocks
25.7 million tonnes; More than half of global stocks stocks for the season decreased by 2% to 18.3
stocks for the season decreased by 2% to 18.3
(52%) are now being held outside of China. million tonnes.
(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
Global stocks at the start of the 2018/19 season were
As ending stock levels in China lowered, the ratio of
stocks held in China and stocks held outside of
1% higher than the previous season at an estimated stocks held in China and stocks held outside of
1% higher than the previous season at an estimated
18.7 million tonnes. At 84 cents per pound, the
18.7 million tonnes. At 84 cents per pound, the China inverted with 52% of global stocks now being
China inverted with 52% of global stocks now being
international reference price of cotton was lower than
international reference price of cotton was lower than held outside of China. Trade in cotton lint increased rade in cotton lint increased
held outside of China. T
the previous season’s ending average of 88 cents
the previous season’s ending average of 88 cents by 2% to 9.2 million tonnes with the USA, Brazil, West , Brazil, West
by 2% to 9.2 million tonnes with the USA
Africa and Australia leading in global exports.
per pound. Africa and Australia leading in global exports.
per pound.
New uncertainties have emerged in addition to the
After a 99.5 cent per pound price at the start of the New uncertainties have emerged in addition to the
After a 99.5 cent per pound price at the start of the
usual risks facing agriculture. F
season, prices fell throughout the year usual risks facing agriculture. Following several years ollowing several years
season, prices fell throughout the year. Global area . Global area
of relatively calm market conditions, world
under cotton decreased by 1% to 32.6 million
under cotton decreased by 1% to 32.6 million of relatively calm market conditions, world
agricultural markets today face mounting risks,
hectares. Global yield decreased slightly by 2% to agricultural markets today face mounting risks,
hectares. Global yield decreased slightly by 2% to
including policy uncertainty from trade tensions.
790 kg/ha but remained above the ten-year average
790 kg/ha but remained above the ten-year average including policy uncertainty from trade tensions.
Open, transparent and predictable trade is important
Open, transparent and predictable trade is important
of 776 kg/ha. As a result, global production
of 776 kg/ha. As a result, global production for the cotton market and its role as an important nt
for the cotton market and its role as an importa
decreased by 3% to 25.7 million tonnes.
decreased by 3% to 25.7 million tonnes.
commodity in the global economy
commodity in the global economy.
APTMA demands
APTMA demands textile policy capable of doubling exportstextile policy capable of doubling exports
APTMA Chairman Amanullah Machera said that
APTMA Chairman Amanullah Machera said that textile exports in the next five years.
textile exports in the next five years.
P
Pakistani exporters are facing stiff competition from akistani exporters are facing stiff competition from
APTMA officials informed that 70 percent of the textile
Bangladesh and Vietnam. The chairman was of the
Bangladesh and Vietnam. The chairman was of the APTMA officials informed that 70 percent of the textile
industry is in P
view that P
view that Pakistan can counter the competition only akistan can counter the competition only industry is in Punjab, where more than 100 mills have unjab, where more than 100 mills have
been closed due to poor energy policies of the
after exporters get a five year textile policy at hand, been closed due to poor energy policies of the
after exporters get a five year textile policy at hand,
previous governments.
so they know what will be the tax rates and energy
so they know what will be the tax rates and energy previous governments.
prices.
prices.
The previous textile policies have not been much of a
The previous textile policies have not been much of a
success story, as the Textile Policy 2014-19 failed to , as the Textile Policy 2014-19 failed to
Meanwhile, APTMA Punjab Chairman Adil Bashir has unjab Chairman Adil Bashir has
Meanwhile, APTMA P success story
achieve all its targets including doubling value
said that the government needs to announce a long
said that the government needs to announce a long achieve all its targets including doubling value
addition from $1 billion per million cotton bales to $2
term and comprehensive textile policy if it wants to addition from $1 billion per million cotton bales to $2
term and comprehensive textile policy if it wants to
billion per million cotton bales, increasing textile
see a return of capital investment in the country. The . The
see a return of capital investment in the country billion per million cotton bales, increasing textile
APTMA Punjab Chairman added that if government unjab Chairman added that if government
APTMA P exports from $13.1 billion to $26 billion as well as
exports from $13.1 billion to $26 billion as well as
accepts this demand, they are capable of doubling creation of 3 million jobs in five years.
creation of 3 million jobs in five years.
accepts this demand, they are capable of doubling
October/November 2019
February/March 2020