KARACHI: Huge potential exists in bilateral trade between Pakistan and China with the former increasing its exports to the latter to the tune of five billion dollars a year under a Free Trade Agreement (FTA), says a study being conducted by WTO Cell of the Trade Development Authority of Pakistan (TDAP).

According to details of the study, expected to be finalised by the end of this month, Pakistan’s exports to China amount to only $460 million and the export base is just confined to four or five items, which makes a big part of total export to the neighbouring country.

Officials in TDAP said the study is being conducted to identify those areas which posses potential for enhancing exports.

“It not only deals with increasing the existing exportable items but also focuses on diversification of export base,” an official privy to the study pointed out.

Officials said that before presenting the study to government, exporters would be taken on board by taking input from them so that their recommendations could be incorporated before finalising the report.

Officials said that great emphasis is being laid on determining the factors that are hindering the export of those items, which are being produced here but China is importing them from other countries on higher rates as compared to the prices of similar Pakistani products.

It is actually to know which non-tariff barriers are impending the export of such items to China, officials added.

Pakistan mainly exports textile, leather, chromites and agriculture products comprising of seafood, fruits and vegetables.

“Even the export of these products could be higher and the study is focusing on the issues confronting the growth in export of these products,” an official noted.

Study will focus on value and supply chain of these products as what are the weaknesses in country’s supply chain system, which make our products uncompetitive in the Chinese market.

When asked if the FTA with China has the potential to increase exports, officials replied that it is a long-term phenomenon and results of it would not come out over night.

“We have FTA with Sri Lanka,” the officials said, “which came into effect since July 2006 but its benefits are being visible now.”

“We have reports that Sri Lankan buyers are placing big orders of textile products with Pakistani exporters and you will see a big jump in export to Sri Lanka in the next few months,” they said.

It is pertinent to mention here that exports from Pakistan to China has increased marginally over the years and exports to China as a part of total export volume moved up to 3.39 percent in 2006-07 from 2.82 percent in 2005-06.

Government estimates suggest that volume of bilateral trade between Pakistan and China will reach $15 billion mark in the next five years from the existing $5.2 billion as the FTA took effect from July 2007.