ISLAMABAD: Over 60 violations of Pak-China Free Trade Agreement (FTA), involving Rs 233.3 million, have been detected by the Customs Department of the Federal Board of Revenue at three major cities; Karachi, Lahore and Islamabad.
The China-Pakistan FTA was singed in November 2006 which led to substantial increase in trade between Pakistan and China and majority of items being imported under Pak-China FTA are finished products like cellular mobile phones, toys, shampoo, electric light, ceramic tiles, rubber tyres, embroidery machines, ginger, blankets, SIM cards, fabrics, etc.
The free and preferential trade agreements became the main tool for trade liberalization with post Doha stalemate at World Trade Organization (WTO), and besides having political dimensions main purpose of these agreements was to obtain better preferential access for national products in target markets.
“Around fifty three consignments evolving import duty and taxes worth of Rs 225 million were detected at Karachi port in which goods were declared as blended cotton fabric falling under Pakistan Customs Tariff (PCT) heading 5208.5100 in the certificate of origin, however, after conducting lab test the goods were confirmed to be viscose fabric falling under PCT 5516.1200,” a well placed source at Federal Board of Revenue (FBR) told this scribe here on Tuesday. The source said that four consignments evolving import duty or taxes Rs 1.5 million was seized at Lahore by Customs Department in which goods were declared as white crystalline asbestos and benefit of FTA under SRO 659 (I) 2009 was claimed however on scrutiny it was observed that the good were Russian origin which did not fell under the ambit of FTA.
The source revealed that companies involved in violations of FTA were namely City Garments, Trade Master, G. A Trading, Zee Builders, Hashim Traders, Mehroz Electronics and Business Impex and commodity imported by these companies was mobile phone from China.
The source said that amount evolved in the violation of FTA clauses by each company was Rs 1.5 million by G.A Trading, Rs 1.1 million by City Garments, Rs 2.2 million by Trade Master in Lahore and Islamabad
“While six violations of the FTA by four companies in Islamabad evolved a total amount of Rs 3.561 million,” the source said adding that Zee builders committed violation worth of Rs 0.832 million, Hashim Traders committed violation of Rs 0.594 million, Mehroz Electronics committed two violations of FTA evolving Rs 0.749 million as well as Business Impex also committed two violations of FTA with China while importing goods worth of Rs 1.38 million.
The source said that 50% of FTAs and Preferential Trade Agreements (PTA) had been signed among or with Asian countries in last decade.
It is pertinent to note here that trade volume due to FTA between Pakistan and China increased to $13 billion in 2013, while is expected to reach $15 billion by 2015. China has been contributing significantly to Pakistan’s imports even before the FTA was signed and has seen considerable improvement in its ranking after the FTA was implemented in 2007. By 2012, it was the source for 15% of Pakistan’s overall imports from the world as compared to 9.8% in 2006.
