Revised Free Trade Agreement Expected To Be Signed Between Pakistan And China
Revised Free Trade Agreement Expected To Be Signed Between Pakistan And China: A revised bilateral free trade agreement is expected to be signed between Pakistan and China anytime during this year. It was revealed by minister of commerce Pervez Malik told journalists after attending an event of the Intellectual Property Organization (IPO) Pakistan.
The two sides are currently having discussions on the subject that is CPFTA (China-Pakistan free trade agreement). The total trade deficit of Pakistan stood at $32 billion out of which its deficit with China was $14 billion in last the financial year.
Pakistan, as per sources, has sought some safeguards for local industry, Trade Reduction Modalities (TRMs) and specific mechanism for the balance of payment clause. The clauses related to safeguards for local industry and balance of payments were not part of FTA-I but both clauses are proposed in FTA-II.
China’s proposed TRM for the second phase of the CPFTA entails overall tariff elimination on 90% of tariff lines. On 70% tariff lines, duties would be immediately reduced to zero on the date of entry into force of the second phase of CPFTA whereas the remaining 20% tariff lines would be divided into 2equal portions.
Pakistan is demanding relaxation in tariff which were largely not accepted by China and also wants China to allow it to export at least 70 high priority items under the duty-free structure
Chinese side was not ready to give concession on already negotiated items in the first phase of Free Trade Agreement.
Under revised FTA negotiations on tariffs for new products while leaving the existing tariffs unchanged are under debate. Both sides are discussing issues relating to the structure of tariff reduction modality, including final elimination level, phase-out periods and response to key items of export interest, etc.
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