Pakistan seeks greater tariff concession from China under FTA

ISLAMABAD (Staff Report) Federal Minister for Commerce Jam Kamal Khan has said that Pakistan is actively pursuing greater tariff concessions from China, seeking preferential treatment at par with concessions Beijing extends to other trading partners, as part of broader efforts to improve market access for Pakistani exports.

Chairing a follow-up high-level consultative meeting with leading exporters and senior government officials at the Ministry of Commerce on Thursday, the Minister said Islamabad has been advocating with Beijing for revised tariff lines and improved concessions under the existing preferential arrangements.

The meeting was attended by Minister of State for Finance and Revenue Bilal Azhar Kayani, senior officials of the Ministry of Commerce, and representatives of concerned ministries and departments. Leading exporters participated both in person and virtually.

According to an official statement issued after the meeting, the consultation followed an earlier high-level session convened to identify challenges affecting Pakistan’s export competitiveness, including energy costs, taxation, financing constraints, regulatory procedures, and international market access.

At the outset, a consolidated presentation was made reviewing the concerns raised by exporters during the previous meeting and the responses provided by relevant government departments. The discussion focused on assessing progress, clarifying outstanding issues, and identifying practical measures requiring further policy intervention.

On market access, Jam Kamal said the government was pursuing greater access to international markets through sustained diplomatic and trade engagements. He informed participants that Pakistan was actively revisiting existing trade arrangements and seeking improved preferential access with major trading partners, including China, South Korea, Turkiye, Japan, and Vietnam.

Referring specifically to China, the Minister said Pakistan had been advocating greater tariff concessions in line with preferential treatment extended to other countries. He said discussions on preferential trade arrangements with South Korea were also progressing, while engagement with other trading partners continued through diplomatic missions, trade offices, and bilateral consultations.

Exporters present at the meeting welcomed the update but pointed out that despite the China-Pakistan Free Trade Agreement Phase-II, Pakistan’s exports to China have remained stagnant around $3 billion, while imports from China exceed $17 billion, creating a wide trade imbalance. They demanded that concessions should be sought for value-added sectors including textiles, leather, surgical instruments, and engineering goods where Pakistan has competitive advantage.

The meeting also reviewed concerns regarding market access for Pakistani tyre exports to Turkiye. Officials explained that certain tyre categories already benefited from concessions under the bilateral Preferential Trade Agreement. Exporters were encouraged to submit specific product details and HS codes to enable the Ministry to pursue outstanding issues with Turkish counterparts.

Beyond market access, the consultation extensively reviewed industrial energy costs, particularly the gas levy and its impact on export competitiveness. Participants were informed that the Ministry of Finance had constituted a committee involving relevant government and industry representatives to review the levy policy and calculation formula and recommend possible refinements.

The Punjab infrastructure cess was also discussed, with exporters highlighting concerns regarding its application, collection mechanism, and additional costs. The meeting emphasized the need for clarity regarding the legal framework, exemptions, and coordination with relevant provincial authorities.

On taxation, participants discussed proposals to rationalize existing export-related eligibility thresholds and explore proportionate super tax relief linked to export-derived income. The meeting also reviewed concerns regarding additional sales tax and refund arrangements for non-traditional exporters. Relevant proposals would be examined in consultation with the Ministry of Finance and the Federal Board of Revenue.

The Export Facilitation Scheme was reviewed, particularly procedural requirements, eligibility criteria, and possible improvements to facilitate exporters. Participants also proposed enhancing incentives under the export growth scheme to encourage businesses to increase their international sales.

Exporters raised concerns regarding certification charges and repeated documentation amendment fees imposed by the Department of Plant Protection. The meeting emphasized that regulatory charges should be rationalized to ensure institutional sustainability without placing unnecessary financial burdens on exporters. The Ministry of Commerce was already examining the matter.

Business visa restrictions, foreign travel advisories, and associated insurance costs were also discussed. Participants were informed that the relevant authorities were pursuing these matters through diplomatic channels, while options for facilitating faster visa processing for verified exporters and business representatives were being explored.

The meeting also reviewed opportunities for expanding livestock and dairy exports. The Minister emphasized the importance of coordinating new proposals with ongoing government initiatives and recent consultations involving relevant ministries and private-sector stakeholders. Officials were asked to prepare consolidated recommendations reflecting the existing policy direction and additional opportunities for sectoral development.

Regarding Pakistan’s GSP Plus status, participants discussed the importance of continued compliance with international commitments and sustained engagement with European partners to safeguard preferential market access.

The Minister stressed that consultations must lead to practical outcomes through effective coordination among federal ministries, provincial governments, regulatory authorities, and leading exporters. He emphasized that even relatively small regulatory costs and procedural difficulties could collectively affect exporters’ competitiveness and therefore required attention.

Leading exporters were requested to submit concise written recommendations identifying specific issues, proposed solutions, and required government interventions. Relevant ministries and departments were asked to provide updated positions and timelines for resolving outstanding matters.

The meeting concluded with an understanding that the Ministry of Commerce would consolidate the recommendations into a comprehensive presentation for consideration by the Prime Minister during an anticipated high-level meeting.

Jam Kamal reaffirmed the government’s commitment to maintaining continuous engagement with leading exporters, reducing the cost of doing business, expanding international market access, and strengthening Pakistan’s export-oriented economy.