Pakistan is preparing to request major trade concessions from China as discussions begin on the third phase of the China-Pakistan Free Trade Agreement (CPFTA). The move is part of Islamabad’s broader strategy to boost exports, reduce its growing trade deficit, and secure better market access for Pakistani industries.

According to reports, Pakistani officials are expected to ask Beijing for zero-tariff access on nearly 700 product categories. The government wants treatment similar to the preferential trade benefits China currently offers to ASEAN nations and several African countries.

Why Pakistan Wants New Trade Concessions

Trade between Pakistan and China has expanded significantly over the years, but the balance has remained heavily in China’s favor. Pakistan imports a large volume of machinery, electronics, industrial products, and consumer goods from China, while its exports remain comparatively low.

Recent figures show that Pakistan’s annual exports to China are slightly above $2 billion, whereas imports from China are close to $20 billion each year. This imbalance has become a serious concern for policymakers, especially at a time when Pakistan is facing economic pressure and foreign exchange shortages.

Officials believe one major reason for the imbalance is the nature of Pakistan’s exports. Most exports consist of raw materials such as cotton, minerals, and copper, which are later processed into higher-value products abroad and sold back to Pakistan.

Focus on Textiles, Meat, and Minerals

The upcoming negotiations are expected to focus on improving Chinese market access for Pakistani products with strong export potential.

Industries likely to benefit include:

• Textile and apparel manufacturers
• Meat exporters
• Mineral and mining sectors
• Rice exporters

Government officials estimate that Pakistan’s meat exports alone could eventually generate billions of dollars annually if Chinese import restrictions are eased further.

Pakistan is also expected to seek the removal of the existing 1% duty on rice exports to China. In addition, Islamabad wants special import quota arrangements similar to earlier agreements that helped Pakistani rice exporters gain better access to Chinese buyers.

Improving Trade Infrastructure

Apart from tariff reductions, Pakistan is also asking for practical measures to improve trade efficiency.

One proposal includes establishing a “Green Channel” at the Khunjerab border crossing to speed up customs clearance and reduce delays for exporters. Pakistani authorities also want easier visa procedures for businessmen and exporters traveling to China for trade activities.

Another important proposal involves encouraging Chinese state-owned companies, including COFCO, to sign long-term purchasing agreements with Pakistani suppliers. Such agreements could provide stability for exporters and strengthen bilateral trade ties.

Strategic Importance of the Talks

These negotiations carry significant economic importance for Pakistan. China is already Pakistan’s largest trading partner and a major investor through projects linked to the China-Pakistan Economic Corridor (CPEC).

Pakistani officials argue that earlier benefits secured under previous phases of the free trade agreement have become less effective because China later signed more favorable agreements with other regions, particularly ASEAN countries.

By securing improved tariff concessions, Pakistan hopes to increase exports, support domestic industries, create jobs, and gradually narrow the trade gap with China.

Challenges Still Remain

While tariff-free access could create new opportunities, experts believe Pakistan will still need to address several internal challenges to fully benefit from the agreement.

These include:

• Improving industrial productivity
• Enhancing product quality standards
• Meeting Chinese sanitary and technical requirements
• Expanding manufacturing capacity
• Strengthening logistics and supply chains

Without these reforms, lower tariffs alone may not be enough to significantly increase exports.

Looking Ahead

The third phase of CPFTA negotiations could become an important turning point in Pakistan-China economic relations. If Pakistan succeeds in obtaining broader tariff concessions, it may open new opportunities for exporters and help diversify the country’s export base.

However, long-term success will depend not only on trade agreements but also on Pakistan’s ability to improve competitiveness and move toward value-added production in global markets.