Pakistan sees the trade war between China and US as beneficial. The country is exploring ways to benefit from it. One way is for Pakistan to import Chinese semi-finished goods, and with a little value addition, these goods can be exported to the US and western countries.

Pakistan also wishes to bridge the trade gap with China and negotiations for a FTA are progressing. The FTA covers more than 6,700 tariff lines at eight-digit tariff code under the harmonised system. The two countries have discussed tariff reduction modalities for the second phase besides the electronic data interchange, services and investment, sanitary and phyto-sanitary and technical barriers to trade measures.

Currently Pakistan is imposing zero per cent duty on 35 per cent of the products while China has reciprocated with zero per cent duty on 40 per cent of the products. Pakistan wants China to grant deeper market access for 35 to 40 tariff lines of Pakistan's prime export interest in the first step to make the FTA mutually beneficial and to promote acceptability of the second phase.

Cotton production in Pakistan is on the decline and this is hurting the textile industry. The country’s exports of fashion apparel comprise 36 per cent of its total textile exports.