KARACHI - Lasbela Chamber of Commerce and Industry (LCCI) President Ismail Suttar has urged the government to reconsider the Free Trade Agreement (FTA) it has been trying to establish with Iran.
"The concept of a FTA seems very attractive in light of the idea that the economic prosperity and growth of all the nations of the world could be brought at par with each other by the free flow of goods and services, regardless of the borders. But the observed reality is not as straight forward as that", he added.
He said that with the realisation of growing importance of FTAs and with the growing importance attached to China as the fourth largest economy of the world as well as an immediate neighbour, Pakistan laid the foundation for an FTA with China in 2006. “However, the FTA with China allowed an influx of various goods which resulted in the stifling of our indigenous industries,” he added.
Since the removal of duty on almost 90 percent of tradable products between the two countries, Pakistani market has seen a deluge of cheap Chinese goods, he said. Some of the industries affected by those Chinese goods are still in their infancy and thus are not in a position to compete with such an onslaught, he added.
Whereas, the FTA has granted China greater access into Pakistani markets, Pakistani products have had difficulty trying to do the same.
The imports from China have performed consistently well in Pakistani markets. Post FTA figures do indicate encouraging growth patterns in exports for Pakistan and yet the current trade balance is still heavily in favour of China, said Suttar.
Keeping this situation in mind, the government of Pakistan must consider the pros and cons of the FTA with Iran deeply before signing it, he said.
The government has a duty to protect the small businesses and ensure that the Irani products do not undermine the competitiveness of the industry, he observed.
He mentioned that both the countries have agreed to switch from their current PTA to an FTA and push bilateral trade volume up to $5 billion over the next five years. But, just increasing the combined volume is not enough.
“We need to safeguard our exports and not only increase them but diversify them too,” he added.