NEWS COVERAGE PERIOD FROM JAN 27 TO FEB 02, 2020
INDONESIAN CG PLEDGES TO BOOST TRADE WITH PAKISTAN
By RECORDER REPORT on January 30, 2020
Consul General of Indonesia Totok Prianamto has said that he will play the role of bridge to bring Pakistan and Indonesia business community closer to boost two way trades.
Speaking at a meeting of North Karachi Association of Trade and Industry (NKATI), he said that more work needs to be done to increase exports of Pakistani products, while also focusing on products imported from Indonesia. He invited the industrialists of North Karachi to find new ways of trade in Indonesia and said that the Indonesian government wants to further strengthen bilateral trade relations with Pakistan.’ Consul General invited the members of NKATI to visit Indonesia and advised to form a business delegation, he would welcome to delegation and facilitate, also B2B meetings with Indonesian businessmen would be arranged. He assured that visas will be issued on a priority basis.
Every year Indonesia hosts a trade show “Trade Expo Indonesia” in Jakarta, in which traders from Karachi can participate and take advantage of business opportunities.
Patron in chief Captain A. Moiz Khan said that there is a long and wonderful friendly relationship between Pakistan and Indonesia; that needs to be taken advantage of. He was hopeful that the Indonesian consulate would play a role in enhancing trade relations. “We want good trade relations with Indonesia,” said Imran Moiz Khan, SVP of NKATI. In this regard a trade delegation from NKATI to visit Indonesia to promote trade between the two countries.
Chairman NKIDMC Faraz Mirza said that the bilateral trade volume between the two countries is $ 2.18 billion, but the trade balance is in favor of Indonesia, which is much lower than the opportunities available.
Chairman Fairs, Exhibition & Diplomatic Affairs Imtiaz Shaikh expressed hope that Indonesia will play a vital role in promoting bilateral trade.
Copyright Business Recorder, 2020
NEWS COVERAGE PERIOD FROM JAN 20 TO JAN 26, 2020
PAKISTAN’S FREE TRADE DEAL WITH CHINA UNLIKELY TO YIELD MUCH
By Usman Hanif Published: January 21, 2020
KARACHI: Although Pakistan has got a mammoth opportunity to increase its exports by billions of dollars under phase-II of the China-Pakistan Free Trade Agreement (CPFTA-II), experts fear that the dream may not materialise due to shrinking economy and de-industrialisation in the country.
“Pakistan may not be able to take advantage of opportunities under CPFTA-II,” said Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Anjum Nisar and Vice President Sheikh Sultan Rehman in a statement.
“We may not be able to reap benefits under CPFTA-II despite elimination of duties on 313 tariff lines covering most of Pakistan’s exports,” said the FPCCI chief.
He pointed out that during phase-I of the China-Pakistan FTA, the balance of trade remained greatly in favour of China, which managed to export 57% of its product lines while Pakistan could take advantage of only 5% of its product lines.
Pakistan exported approximately $2.1 billion worth of goods every year in the first phase while imports from China stood above $17 billion that created a trade gap of roughly $15 billion in favour of China.
The FPCCI vice president questioned as to how the country could benefit from the agreement when it did not have surplus products to export due to the shrinking economy.
He highlighted the fact that industrial output was declining because of de-industrialisation over the past few years.
Serious issues like high interest rate, frequent increase in power and gas tariffs, shortage of gas for industries, abrupt changes in government policies, rampant smuggling, delay in refunds to exporters and an overall hostile environment are making it difficult for the industries to sustain their existence.
“I agree to a great extent [with the FPCCI president] as in 2019 China gave us additional access for $1 billion but we could not benefit from it,” said Prime Minister’s Economic Advisory Council member Dr Abid Qaiyum Suleri while talking to The Express Tribune
“We can only increase exports by $300 million just because we do not have anything to sell.”
An official of the Commerce Division said “there are two ways of working in an international market; first is that you have a product and you try to get access to the market of a country while the other is you first take market access and then get investment in production.”
Once the country got the access, the financiers would come and invest in the product as they could see the market ahead of them.
“There are only around 75 out of 313 products under the FTA which Pakistan doesn’t have the capability to produce while the rest it can produce; it is just a matter of time,” he added.
Explaining, the official said if China imported those 313 products from anywhere else, they would be expensive and Pakistan could make them cheaper, therefore, Pakistan had the capacity and business sense, which would result in increased trade soon.
“This FTA may produce results in future as investors possibly will come and make investment in those goods which can be exported to China,” said Suleri.
The FPCCI president urged the government to urgently develop a robust industrial policy that would lead to massive industrialisation in the country, encourage research and development, innovation, diversification and development of new products, improve quality standards and enhance technical skills of the labour force.
He also urged Chinese companies to enter into joint ventures with Pakistani manufacturers and relocate their industries to the Special Economic Zones. “These efforts will significantly raise industrial output, enabling Pakistan to take advantage of CPFTA-II,” he said.
Published in The Express Tribune, January 21st, 2020.
BUZDAR REVIEWS SETTING UP OF INDUSTRIAL ESTATES AND SEZS
By MUHAMMAD SALEEM on January 25, 2020
Chief Minister Punjab Sardar Usman Buzdar held an important meeting at his office, here Friday in which different matters including establishment of Industrial Estates and Special Economic Zones, progress on the annual development program, provincial finance commission and Prime Minister’s Kamyab Naujawan Program, were reviewed.
The meeting, which was also attended by Federal Minister for P&D Asad Umar, PM’s Special Assistant on Youth Affairs Muhammad Usman Dar, pondered over development schemes for national and provincial constituencies.
Addressing the meeting, the chief minister said that Rs187 billion have been released by January 22 under ADP. About Rs107 billion have been spent while Rs42 billion have been allocated for public-private partnership based projects. He said that a proposal of setting up of public-private partnership infrastructure fund is also under consideration. Similarly, out of the reserved amount of Rs62 billion, Rs42 billion have been released for development of Southern Punjab, he added.
The chief minister maintained that ban has been imposed on transfer of funds reserved for the development of backward areas to other localities or projects. He added that timely utilization of released funds will be ensured adding that 17 places have been identified for accelerating the industrial process in the province and a strategy is being devised for their development.
He disclosed that the Quaid-e-Azam Apparel Park project will be inaugurated in the month of March. A new Industrial Estate will be established in Sialkot over an area of 1000 acres of land to create around 350,000 new jobs opportunities, he said.
He said that interim provincial financial commission award 2017 is functional while Punjab cabinet has given approval to the constitution of a commission under the Punjab Local Government Act 2019. This commission would be notified soon, he added. A total of 455 local governments would be formulated in Punjab, he added.
The chief minister said that billions of rupees have been earmarked for Punjab municipal services program and added that non-functional sewerage and water supply schemes will be reactivated under this program. Similarly, necessary machinery will also be procured for solid waste management and work will be done in constituencies. The Punjab Municipal Services Program will be started from next month, he added. The second phase of repair and maintenance program of rural roads is being started soon and roads’ repair would also be done in parliamentarians’ constituencies, he said. He said that Punjab will take a lead with regard to Prime Minister’s Kamyab Naujawan program as it is a revolutionary step to empower the youth, concluded the chief minister.
Punjab industries minister Mian Aslam Iqbal, Advisor to CM Dr Salman Shah, Mussarat Jamshed Cheema MPA, CS, Chairman P&D, Secretary Finance and others attended the meeting. Moreover, the CM in a meeting with Usman Dar discussed matters regarding provision of loans to the youth of the province under Prime Minister’s Kamyab Naujawan program.
Usman Buzdar said that youth is our asset and PTI government is implementing a comprehensive program for their development. He said the government is empowering the youth.
Usman Dar said the PTI government allocated maximum budget for the youth in the national history. About 0.8 million youth from Punjab has come under purview of Kamyab Naujawan program. On the instructions of Prime Minister, the process of disbursement of loans is immediately being started throughout the country and provision of employment to the youth is the top priority of the government, he added.
Copyright Business Recorder, 2020
NEWS COVERAGE PERIOD FROM JAN 06 TO JAN 12, 2020
PAKISTAN’S TRADE DEFICIT CONTRACTS OVER 30% TO $11.6B
By Shahbaz Rana Published: January 7, 2020
ISLAMABAD: Pakistan’s trade deficit narrowed over 30% to $11.6 billion in the first half of current fiscal year due to import compression amid signs of a weakening growth in exports despite numerous administrative measures and giving billions of rupees in subsidies to the exporters.
Trade figures that the Pakistan Bureau of Statistics (PBS) released on Monday showed that exports posted a negative growth both on a yearly and monthly basis, pulling the cumulative growth in exports in July-December down to just 3.2%. The pace of increase in exports slowed down last month.
Exports again fell to $2 billion a month after briefly remaining slightly above $2 billion – a threshold that Pakistan had not been able to cross on a consistent basis. The Pakistan Tehreek-e-Insaf (PTI) government will now surely miss the annual export target – for the second successive year.
In absolute terms, Pakistan managed to increase exports by only $354 million from July through December despite 33% depreciation of the rupee in the previous year. Exports stood at $11.54 billion in the July-December period of the current fiscal year, reported the PBS.
Imports during the period under review dropped 17.1% to $23.2 billion, according to the PBS. In absolute terms, imports contracted $4.8 billion, which provided some relief for the government that was struggling to enhance exports.
The International Monetary Fund (IMF) has projected that the trade deficit of Pakistan in the current fiscal year would narrow down to $24.3 billion, also slightly lowering its projection due to weakening exports.
The IMF had earlier predicted exports to reach $26.8 billion but in its latest report the estimate has been revised down by nearly a billion dollars to $25.7 billion.
Overall, the trade deficit, which stood at $16.8 billion in the first six months of the previous fiscal year, shrank to $11.6 billion in the same period of current fiscal year. In absolute terms, there was a reduction of $5.2 billion in the trade deficit and 93% improvement came from the import side.
Six-month exports were equal to only 43% of the annual target of $26.8 billion while imports were equal to 45% of the target of $51.7 billion. Successive governments have been providing subsidised loans, gas and electricity to the exporters but they failed to produce desired results, which may spark calls for a review of the existing policies.
Overall, the import compression policies have affected the Federal Board of Revenue’s (FBR) tax collection, which have resulted in a shortfall of Rs284 billion in tax revenues despite taking huge advances and blocking taxpayers’ refunds.
The FBR claimed last week that it sustained losses worth Rs336 billion due to import compression in the first half.
The currency devaluation, as part of the import compression policies and also aimed at increasing exports, stoked inflation and increased the cost of doing business. Lack of diversification of export destinations and products, and a high cost of doing business are among the key factors behind the low exports.
Exports contracted on a yearly and monthly basis. On a yearly basis, exports dropped 4% to $1.99 billion in December 2019 over the same month of last year, a net decrease of $82 million.
In December 2019, imports in dollar terms fell to $3.95 billion compared to $4.4 billion in the same month of last year, a contraction of over 10% or $455 million, reported the PBS.
The trade deficit in December contracted 16% to $1.96 billion over the same month of last year.
On a month-on-month basis, exports, which stood at slightly below $2 billion in December 2019, were $21 million or 1% less than the previous month.
Imports marginally increased to $3.95 billion on a month-on-month basis. The month-on-month trade deficit was up by $31 million or 1.6% to $1.96 billion, according to the PBS.
Published in The Express Tribune, January 7th, 2020.
83PC OF GLOBAL EXPORTS LIBERALISED IN CPFTA-II: COMMERCE MINISTRY
MUHAMMAD SHAFA January 11, 2020
KARACHI: Pakistan projects $3.2 billion exports growth in case of minimum 5 percent realisation of the free market access of 313 Pakistan’s high priority tariff lines given by China under the Phase-II of China Pakistan Free Trade Agreement (CPFTA-II) which has been operationalised by January 01, 2020.
Dr M Hamid Ali Joint Secretary (Foreign Trade-1) Ministry of Commerce in his presentation at a seminar said CPFTA-II has greatly secured Pakistan’s export interest as around 83 percent of the country’s global exports have been liberalised in the CPFTA-II as against 41 percent of the same in Phase-I.
Similarly, 91 percent of Pakistan’s exports to China have been liberalised in Phase-II as against 30 percent liberalised in Phase-I. This liberalisation covers 88.3 percent of China’s global imports or $ 1.6 trillion.
“If we captured only five percent market share out of the 313 tariff lines, our exports would surge up to $3.2 billion and these projections are based on Chinese global imports in 2016.” Hamid said.
The sensitive list has been enhanced from 1410 in CPFTA-I to 1760 in the CPFTA-II after thorough consultation with the stakeholders.
The event titled ‘China Pakistan Free Trade Agreement Phase-II, Business and Export opportunities for Pakistan’ was jointly organised by TDAP and MoC here at a local hotel.
While highlighting the gains of CPFTA Phase-II, Hamid said provision has been introduced to address the Balance of Payment (BoP) difficulties. Effective enforcement of Electric Data Exchange will also ensure sharing of the real time trade data to discourage under invoicing and misreporting.
China has granted concessions to a set of products including textiles and garments, seafood, meat and other animal products, prepared foods, leather, chemicals, plastics, oil seeds, footwear as well as engineering goods including tractors, auto parts, home appliances, machineries, etc..
Safeguard Measures (SGM) have been invoked to temporarily restrict imports of a product which cause injury or threaten to cause injury to the domestic industry. SGM in CPFTA-I were inadequate to address the concerns of the industry.
Chief Executive (CE) TDAP Arif Ahmad Khan in his welcome address said that CPFTA-II offers enhanced and deeper market access to Pakistan as China has eliminated the tariff on 313 tariff lines of Pakistan’s export interest, giving treatment at par with ASEAN.
The CE further remarked that CPFTA-II will help Pakistan in enhancing export from Pakistan to China in coming years.
Economic and Commercial Counsellor, Consulate General of China in Karachi Guo Chunshui briefed the audience about the trade profile between two countries and efforts involved in finalising the CPFTA. He assured the support of Chinese Government in smooth implementation of FTA Phase-II.
The Vice President FPCCI Shaikh Sultan Rehman highlighted the role of FPCCI in finalising the CPFTA Phase-II. He also shared his concerns that a lot is needed to be worked out from Trade and other government institutions in addition to MoC to realise the gains out of the 2nd phase of CPFTA.
The seminar was attended by businessmen from FPCCI, KCCI, women chambers, major trade associations and export sectors including textile, leather, agro food, chemicals industry, engineering etc..
NEWS COVERAGE PERIOD FROM DEC 30 TO JAN 05,2020
US, CHINA BIGGEST WTO WINNERS
By RECORDER REPORT on December 31, 2019
Membership of the World Trade Organization has benefitted the US and China more than any other nations, a study published Monday found, as the two powers seek to defuse a months-long trade conflict.
The Bertelsmann Foundation research showed WTO membership has boosted the US’s gross domestic product by $87 billion in the 25 years since the country joined. China, which became a member only in 2001, gained $86 billion, while Germany added $66 billion.
“Even if no organisation is perfect, anyone who believes they can rely on a system of bilateral trade agreements instead of the WTO risks enormous losses of prosperity in international trade,” said Bertelsmann trade expert Christian Bluth.
With 164 member countries, the WTO will celebrate a rocky 25th anniversary on January 1, 2020. Washington refuses to name new judges to its appellate body, blocking arbitration of trade disputes.
Washington and Beijing have nonetheless struck a truce in their tit-for-tat tariff war, hoping to sign a preliminary trade deal in January. Around the world, Bertelsmann found WTO members gained on average 4.5 percent of GDP from membership. The total increase reached $855 billion or one percent of global output, the study showed.
And around the world, WTO members’ exports increased an average of 14 percent between 1980 and 2016, while non-members’ exports fell almost six percent. So far, “nations with strong exports and production are the main beneficiaries” of WTO membership, the Bertelsmann Foundation said in a statement, pointing to countries such as South Korea and Mexico as further winners.
European countries with smaller manufacturing sectors have not been able to make such large gains from WTO membership. France’s output was boosted by $25 billion, while Britain’s added $22 billion – both well below the average increase of 4.5 percent of GDP.
European Commission president Ursula von der Leyen has said she planned to meet US President Donald Trump “at the beginning of 2020″, with trade one of the major issues on the table.
Copyright Agence France-Presse, 2019