ISLAMABAD: Pakistan has urged the Japanese government to initiate talks on early-harvest programme, leading to a free trade agreement between the two countries.
The formal request was made in a meeting with Commerce Minister Pervaiz Malik and the Ambassador of Japan Takashi Kurai on Tuesday.
The term of references for an early-harvest programme was already framed by Pakistan and shared with the Japanese side. Upon agreement by Tokyo, a study will be commissioned to identify products for promoting its bilateral trade.
Both sides have already notified their respective Joint Trade Committee (JTC). The first meeting of the JTC was held in July 2017.
Over the past few years Pakistan’s exports to Japan have continuously shown a declining trend, largely, due to the disadvantageous position in textiles as compared to its competitors. India, Bangladesh and the Association of Southeast Asian Nations (Asean) countries are enjoying duty-free access to the Japanese market, either because of bilateral or regional trading arrangements or by virtue of Least Developed Country (LDC) status.
During the meeting, the commerce minister said that Japan being the sixth largest import destination is an important trading partner of Pakistan. “There exists tremendous potential between the two countries to increase bilateral trade,” he added.
Mr Malik also said that although Pakistan has Generalised System of Preferences status and is facing on average 1.4 per cent less duty than developed countries, the tariff imposed on Pakistan’s textile exports is on average 5.36pc higher than that being faced by our competitors like India, Bangladesh and Asean countries.
In 2014-15, Japan imported textile products to the tune of $38bn out of which Pakistan’s share was a meagre $123m (0.33pc).
The commerce minister said that Japan is also a very promising market for Pakistan’s leather products, but in this sector also Pakistani products face an average tariff of 16pc along with Tariff Rate Quotas, which is higher than that offered to India and Bangladesh therefore rendering Pakistan’s leather products uncompetitive. “We want a level playing field,” added the minister.
Out of quota duty is as high as 30pc. In comparison, Bangladesh being LDC status enjoys duty free market access on finished leather goods and duty on finished leather import from India under the India-Japan Comprehensive Economic Partnership Agreement that came into force in August 2011 and is around 7pc, which will be reduced to zero over the next five years.
Japanese Ambassador Mr Kurai informed the commerce minister that internal consultations are still being carried out and would inform the outcome by next JTC, which may be held in Japan.
He assured the minister full support from the Japanese government and said that “more and more interaction of the governments and private sectors of both the countries are required to boost bilateral trade.”
In the year 2016-17, Pakistan imports from Japan were $1.986bn while exports to Tokyo were $246m.
Major imports from Japan were; road vehicles and their parts, machinery (all sorts), iron and steel manufacturing , chemical material and products, chemical element and compounds, paper and paper board, ship and boat incl. ships breaking, tyres and tubes of rubber