Pakistan Eyes $1 Billion in Exports Under New Free Trade Agreement with China

Pakistan and China are set to sign the Free Trade Agreement (FTA)-II when Prime Minister Imran Khan will leave for Beijing on April 27 for three days. This was disclosed by Razak Dawood in an interview with a local English newspaper.

Pakistan will also place its request with top Chinese functionaries seeking another $1 billion order for exports to China out of the FTA-II agreement. The $1 billion export order will help Pakistan triple its exports to China.

He also disclosed that the Prime minister will attend the second OBOR (One Belt One Road) Forum for International Corporations. The much-awaited FTA-II, once it is signed, will help Pakistan double its exports to China, he said.

“Finance Secretary Younas Dagha and Commerce Secretary Sardar Ahmad Nawaz Sukhera will leave for China on April 9 where they will hold talks with top Chinese officials on the initial FTA-II accord. However, on the sidelines of the OBOR Forum that will be attended by heads of states and delegates from over 100 countries, both the countries will ink the free trade accord-II in the presence of Prime Minister Imran Khan and Chinese President Xi Jinping,” he said.

On November 9, 2018, he said, Beijing had placed an order with Islamabad of $1 billion exports to the Chinese market. Under that particular order, Pakistan was to export 300,000 metric tonnes (MT)of sugar, 350,000 MT yarn and 200,000 MT of rice. For the $1 billion order, $300 million of rice and sugar will be exported by June 30, 2019. Almost 75 percent of the rice has been shipped and the rest of the consignment will be completed by June 30, 2019. However, other consignments of sugar and yarn are to be executed by December 2019.

The exports to China currently stand at $1.2 billion which will surge to $2.4 billion after signing FTA-II, but out of the second free trade deal, the target of export of $1 billion is to be executed by December 2019, that will be followed by another $1 billion exports, for which Pakistan will also request China to extend the order during the forthcoming visit.

Saudi Investment

Furthermore, about the investment of $10 billion on establishing the deep conversion refinery and $1 billion on the petrochemical complex at Gwadar, Razak Dawood said that Pakistan experts’ delegation is leaving soon for Saudi Arabia to interact with their counterparts to discuss the technical issues and once the specifications are finalized.

The advisor hoped that a feasibility study by Saudi experts will be completed in 12 months.

Malaysian MoUs

When asked about the recently signed MoUs with Malaysian companies, during the visit of Prime Minister Mahathir Mohamad to Pakistan, the minister said that the MoUs of $900 million is different as these were signed by private-to-private parties. The minister said he is 100 percent sure that MoUs valuing $900 million will be materialised and executed.

To a question, the minister brushed aside the impression that the government has abandoned the Look Africa Policy saying this policy is very much effective as Pakistan is currently exporting cement, and Pakistan made tractors to three African countries of Mozambique, Zambia, and Kenya.