ISLAMABAD: The Senate Standing Committee on Commerce on Wednesday noted that free trade agreements (FTAs) have adversely affected Pakistan’s trade with partner countries, with the Federal Board of Revenue estimating a revenue loss of around Rs40 billion per annum due to preferential trade agreements.
Over the years, trade diplomacy by the Ministry of Commerce has opened up Pakistan’s market to international goods but deprived the country from due taxes, the committee, led by its chairman Senator Shibli Faraz, observed.
Senator Nauman Wazir, who was specially invited by the committee to give a briefing on FTAs’ impact, informed that the trade deficit ratio of exports and imports with China has increased from $4bn to $12bn.
He questioned whether the commerce ministry was coming up with any plan to get feedback from experts and stakeholders on the terms of these agreements.
Secretary Commerce Azmat Ali Ranjha informed the committee that import volume has gone up irrespective of FTAs. He said the ministry now engaged in structured discussion in the process to help avoid trade deficit and to safeguard local manufacturers and farmers.
Senator Usman Kakar from Balochistan said the Chinese FTA has led to closures of several industries in the country. “Our products, especially agriculture products, are cleared on duties and taxes at ports in China,” Senator Kakar said.
Exim Bank: On the issue of much-awaited Exim Bank, the committee was informed that the board of directors for the bank is now in place and a consultancy firm will soon be hired to prepare a manual and business plan.
The State Bank of Pakistan will licence the bank after the consultancy firm finishes all work required for the bank’s functioning which will be before June next year. The committee observed that the importance of Exim Bank was not understood as it should be. The committee asked for representation of all provinces in the board of directors of this bank.
Imported milk: The matters of import of huge quantity of possibly substandard powdered milk and the restriction on imports of PVC scrap on the pretext of being hazardous were also discussed in the meeting.
The commerce secretary informed that powdered milk imported in country is subjected to standard control and is checked by the Pakistan Standard Quality Control Authority (PSQCA) under the Ministry of Science and Technology.
Regarding restriction on PVC scrap, the committee asked the ministry to have a mechanism in the policy which is suitable for small manufacturers.
The committee said the TDAP Act observed that it is too widespread and its work ambit is to be constrained.
Secretary commerce said the act was fine and the Trade Development Authority of Pakistan is working towards rationalising major objectives.
Published in Dawn, December 8th, 2016