Islamabad: A report from Bloomberg has claimed that Pakistan has requested Beijing for a review of its decade old free-trade agreement amidst a rising current account deficit. It mentioned that the country’s trade imbalance with China is a worrisome development and keeps on widening amidst rising imports which were valued at $7.82b for the financial year 2016-17 and exports stood at a meagre $1.4b.
It cited Pakistan’s commerce minister Khurram Dastagir Khan who said that the country was seeking the same trade concessions that China had granted to other nations in the last few years. Khan added that better access to the Chinese market has been sought and for having zero duty on some products.
In an interview on May 19th Khan said “Our margin of preference has been eroded by the subsequent accords China has done. First address this imbalance, and then of course we can begin to negotiate further expansion and liberalization.”
Bloomberg also reached out to the Chief Executive of Topline Securities, Mohammed Sohail who stated ”If we continue to rely on Chinese imports, our overall exports won’t increase, then the balance of payment will be negative, interest rates will be high, there”’ be currency devaluation and the government will be relying on foreign debt.”
China has been financing worth $50b of projects under the China-Pakistan Economic Corridor (CPEC) which will help in improving the infrastructure and energy sector of Pakistan. The large trade imbalance is a worrisome development, as this will put pressure on payments of increasing debt and could lead to a balance of payment crisis, said Bloomberg.
