Page 18 - November/December-2019

During the first phase of the FTA, local manufac-
The textile sector of Pakistan will get a boost in
tures complained about the unbalance in the
exports to China as the second phase of the Free
Trade Agreement (FTA) between China and
deal, especially the textile sector which raised
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-
billion Pakistan's overall exports and US $64
ment took note of the demands by the industry
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
and will help enhance the sector’s exports to
At the same time, they complained that the
China as it offers the same duty free access to
country’s competitors from the ASEAN had duty
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
percent for the first six months of the current
counterparts and now hope that the second
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
As a counter-measure, the sensitive list had been
September of this year dropped from US $2.08
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
major reason for the decline as it said that the
and the textile and garments sector is a major
beneficiary of this sensitive list. Whereas, the
India did not enjoy the same tariff free access to
tariffs from the industry had also been lifted to
the Chinese market, whereas India had to pay 3.5
increase the export of the sector. The Chinese
to 5 percent tariffs.
side also agreed to immediate market access on
its priority products, tariff reduction and measures
The full effects of the second phase of the FTA
for protection of the domestic industry on
could be gauged after the deal comes into effect
Pakistan’s request.
from December 1, which would boost the exports
of Pakistani products to the Chinese market.
Earlier in the month, Abdul Razak Dawood,
The first phase of FTA between China and
Adviser to the Prime Minister for Commerce,
Pakistan was signed on November 24, 2006 and
became operational in 2007. The negotiations for
Textile, Industry & Production and Investment,
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
rounds, both sides signed the agreement in April
of 2019 in Beijing.
operational earlier than usual. He said that it
usually took a year to make such agreements
Now, the second phase is about to take effect
operational between countries but because of the
which is already showing some positive signs.
special relations enjoyed by both the countries.
18
Global cotton woven fabric
exports declining since 2013
Woven fabric is highly important in textiles and collapsed to $26.60 billion in 2018 with 1.2% decline
cotton woven fabric has been the largest exported and anticipated to reach $26.11 billion in 2021 with
group until 2015 because cotton is the largest a CAGR of 0.62 per cent from 2018, according to
sustainable and biodegradable fiber produced to the data provided by TexPro.
fulfil textiles product demands.
China, Pakistan, India and Italy were the key
Export of woven fabric in 2006 was 28.2% at $69 exporters of cotton woven fabric comprising 70.35%
billion in the total global textile export of $244 billion. of the total export until 2018 followed by Turkey,
In 2015, out of the total textile export ($315 billion), Hong Kong and Germany.
woven fabric was 25% (78 billion). Cotton woven
fabric was 37.1% at $29 billion of total woven fabric Mainly cotton woven fabric was imported by China,
export. The trade of cotton fabric is decreasing Indonesia, Hong Kong, US, Italy and Germany at
34.68% of total import followed by Mexico, Sri
since 2013 universally with a considerable com- Lanka and Turkey. Highest import growth rate was
pound annual growth rate (CAGR). The woven achieved by Mexico(3.06%) and Sri Lanka(27.03%)
fabric trade was $26.93 billion in 2016 that in term of value from 2013-2018.
MoU to be inked for Faisalabad Expo Centre
A Memorandum of Understanding (MoU) for the construction of a state-of-the-art Faisalabad Expo Centre
is expected to be inked soon, said Zafar Iqbal Sarwar, Senior Vice President FCCI.
He had a detailed meeting with Provincial Secretary Industries, Muhammad Zafar Iqbal (PAS) to discuss
the related issues. The meeting was also attended by Bilal Waheed Sheikh Vice President FCCI, Rafia
Syed, Additional Secretary (Commerce), Zia-ul-Mustafa CEO Pakistan Expo Pvt Ltd Company, Amir
Saleemi, CEO FIEDMC.
The meeting discussed various modes for the construction of Faisalabad Expo Centre and it was decided
in principle that it would be completed on the model of Lahore and KPK expo centres.
October/November 2019