The Embassy of Pakistan in Beijing has opposed the Fan Manufacturing Association’s approach to the Ministry of Commerce in Pakistan for the application of regulatory duty/ imposing a ban on the export of Aluminum and Copper Ingots to give the edge to the local manufacturers.
Badar Uzaman, Commercial Counselor of the Embassy has requested that appeals of the export ban on Copper/ Aluminum Ingots to subsidize fan manufactures may not pay heed to as it will discourage the Chinese investors and shall be tantamount to surrendering the market access of top ticket items gained in CPFTA-II.
Commercial Section of the Embassy mentioned that the products i.e. Aluminum & Copper Ingots are widely imported by China from Pakistan and now copper has become our largest export product overtaking cotton yarn. 10-15 Chinese companies/ investors are in the process of starting production of Aluminum Ingots in Pakistan and 3-4 plants have been commissioned. 95 percent production of these plants will be exported to China and only 5 percent production shall be consumed within Pakistan. It is worth mentioning that M/s WS Metal Trading, exporter of copper/ aluminum ingots has achieved the target of USD 68 million and has been included in the list of top 100 exporters.
Aluminum ingots cannot be directly consumed by fan manufacturers as the end-use of these ingots is in engine castings and other raw uses. Fan manufacturers require high-grade Aluminum wire in a small quantity that is drawn using high-grade Aluminum ingots/ plates/ wire rods. In the year 2019 only, $50 million worth of high-grade unwrought Aluminum was imported from China by the cable manufacturers subsequently used by fan manufactures. Some fan manufacturers have in-house wire drawing facility and are direct importers.
Favorable Duty and taxes regime is already in place to accommodate these raw material imports to help them be part of the global value chain of the engineering sector as fans require a multitude of inputs not possible to be made in one country. Newcomer Chinese companies in the Aluminum and copper sector will hire a large number of Pakistani workers providing wide-scale employment opportunities and the exports of aluminum and copper can fetch huge foreign exchange. The Chinese imports of Aluminum are $5.7 billion and copper are $40.8 billion. Pakistani exports of Aluminum are also continuously rising after the inclusion of Aluminum Ingots in the list of duty-free 313 tariff lines under CPFTA Phase-II.
It may further be noted that export duties are highly damaging in nature and no country resort to these nowadays as these are tantamount to subsidizing one industry at the expense of other badly disrupting the free market economy. The export potential of Aluminum/ Copper will be in tune of several billion dollars even if we are able to grab a part of the Chinese market, the Commercial Counselor added.