Leading Issues in the Economy of Pakistan: Agenda for Reforms 15.7 One-Sided FTA with China There has been a special bilateral trade relationship between China and Pakistan since 2006, with a number of items of each country subject to zero or concessionary import tariffs. The Pak-China early harvest agreement included the lists of these items. The Phase-II of the CPFTA was signed on the 28 th of April 2019 in Beijing. The major features are as follows: i) Market Access: China will immediately eliminate tariffs on 313 most priority lines of Pakistan’s interest. Included are textiles and garments, sea food, meat prepared foods, leather, chemicals, plastics, oil seeds, etc. ii) China will liberalize 75 percent of its tariff lines in a period of 10 years and Pakistan will do so in 15 years. Some safeguard measures have been included, but they have generally not been applied. The trend in bilateral trade between the two countries is shown in Table 15.13. The FTA has resulted in a very imbalanced pattern of trade between the two countries. China exports to Pakistan over six times as much as it imports from Pakistan. It is the largest exporter to Pakistan, with a share in Pakistan’s imports of almost 25 percent. Table 15.13: Trend in Trade with China EXPORTS 2005-06 China Exports to Pakistan 2706 Pakistan’s Exports to China 464 Ratio 5.83 Source: SBP 2010-11 3534 576 6.13 2015-16 12098 1670 7.24 2019-20 13301 2043 6.51 ($ Million) 2021-22 17296 2781 6.22 There is need for review and renegotiation of the FTA with China. It is extremely unusual that there is so much imbalance in trade between two countries in an FTA. China should be asked to expedite the process of moving to zero tariffs, especially on the full range of textile products, on import from Pakistan. A comprehensive review must be undertaken by the Ministry of Commerce along with the National Tariff Commission to determine if particular duty-free imports from China have inflicted severe damage to different industries. In such cases, the zero-import tariff may be withdrawn in consultation with China. 15.8 Increasing Return on Roshan Digital Accounts Cumulative inflow under the Roshan Digital Accounts(RDA) reached$5.14 billion at the end of September, 25 months since the programme was launched, according to data released by the State Bank of Pakistan(SBP). 154