CPEC facilitates Pakistan's pursuit of becoming regional transshipment hub

Pakistan's Ministry of Commerce has said that it is striving to make Pakistan a hub of transshipment by tapping the potential of the geographical location of the country and its capability to help cargo reach the outside world through its ports.

Experts and officials believe that the vast transport infrastructure of the China-Pakistan Economic Corridor (CPEC) and its Gwadar port will play a major role in the country's pursuit of its goal especially at the time when it has started enhancing trade ties with landlocked Afghanistan and the Central Asian countries.

Earlier this month, the first-ever cargo container from Pakistan's southern Karachi port reached Uzbekistan under the Transports Internationaux Routiers (TIR), or the International Road Transport, by traveling on the "vast roads built under the framework of CPEC, and in the future the traffic is likely to increase sharply," sources from the commerce ministry told Xinhua.

Another container from Uzbekistan is expected to reach Pakistan's industrial city of Faisalabad soon by following the same land route, according to a statement from the commerce ministry.

Advisor to Pakistani Prime Minister for Commerce and Investment Abdul Razak Dawood viewed CPEC as a good opportunity not only for Pakistan but also for Afghanistan and Central Asian countries for their economic growth.

"In the future, opportunities are coming to Pakistan under CPEC, and with peace in Afghanistan we need to give a new direction to CPEC as a policy to enhance connectivity with Afghanistan and Central Asia," he told Xinhua.

Calling Pakistan's trade initiative with Uzbekistan under the TIR a new beginning, Dawood said that the vision is to make the whole Central Asian countries, Afghanistan and Pakistan an integrated unit in terms of trade, "and CPEC will play an important role for that purpose."

He said the Gwadar port which has already been utilized for Afghan transit trade, has an important role in making Pakistan a hub of transshipment because it will be the shortest route to the landlocked countries to reach the outside world.

"Pakistan and China have made big investments in Gwadar and the time to tap the full potential of Gwadar is approaching because peace in Afghanistan and Pakistan's boosting relations with the Central Asian countries under the TIR will help us make the best use of Gwadar," Dawood said.

Launched in 2013, CPEC is a corridor linking the Gwadar port in southwestern Pakistan with Kashgar in northwest China's Xinjiang Uyghur Autonomous Region, which highlights energy, transport and industrial cooperation.

Apart from the government's efforts to provide accessibility to the Central Asian countries and Afghanistan to the Pakistani ports, Pakistani private traders also show a great interest in Central Asia to import raw materials and commodities from there at a lower cost as compared to other international markets.

Chief Coordinator of the Pakistan Readymade Garments Manufacturers and Exporters Association, Ijaz Khokhar, told Xinhua that they are looking to import cotton bales from the Central Asian countries, which are available at a cheaper price.

He said Pakistan's textile industry is booming and there is an acute shortage of raw material because cotton production in the country has decreased and the Central Asian countries are rich in cotton which can be used in Pakistan once the trade relations with them enhance.

"We are desperately wanting a peaceful route to Central Asia and after there is peace in Afghanistan, we are pinning hope on the connectivity enhanced by CPEC to help us find new markets. Because currently our major export markets are the European Union (EU) where Pakistan is sending its products under the Generalized Scheme of Preferences Plus (GSP+) status, but we need to find more markets for our products," Khokhar said.

He said Pakistan's current exports to EU countries are over 6 billion U.S. dollars annually and the textile sector contributes to a large part of it. Last month, the European Parliament adopted a resolution to review the GSP+ status of Pakistan, raising concerns among the Pakistani exporters.

"If they remove the GSP+ status, we will sustain great losses in our revenue. In this situation, we are looking forward to enhanced trade relations with Central Asia," Khokhar said.

"The best thing about CPEC with the Central Asian countries is the land routes, which currently suits us the best because the charges of sea freight in Pakistan has increased and if the GSP+ status is not secured, we will be transporting it to the Central Asian countries on a much cheaper cost via CPEC infrastructure, and in the future we will seek new markets from the Gwadar port onwards," he added.