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China, Pakistan harvest ties

China Daily

China, Pakistan harvest ties

By Dai Yan (China Daily)

10 December 2005

Pakistani mangos and oranges will be imported into China at zero tariff from January 1, 2006, while Chinese-made textile machinery and organic chemicals will enjoy free duty in Pakistan at the same time.

They are benefits brought by the early harvest programme (EHP) between the two countries, which have a long history of friendship, signed formally on Friday in Beijing.

The EHP is a significant step towards the free trade agreement (FTA) between the two economies, and may help address the imbalanced trade between them, in which China has a big surplus, according to the Chinese Minister of Commerce Bo Xilai and Pakistan Minister of Commerce Humayun Akhtar Khan, who attended the signing ceremony.

EHP, often a prelude before an FTA, is a framework offering quick tariff reduction on some products so that each country can feel the benefits of a FTA earlier.

According to the EHP agreement, more than 3,000 categories of products will have zero or lower tariff from January 1, 2006.

Some 486 categories of Chinese goods exported to Pakistan will enjoy the zero-tariff treatment, mainly vegetables, fruit, stone materials, textile machinery and organic chemical products.

Meanwhile, China will give zero-tariff treatment to 769 categories of goods imported from Pakistan, mainly vegetables, fruit, stone materials, cotton fabrics and man-made fabrics.

For those products with lower tariffs, China will cut its tariffs by 27 per cent on 1,671 kinds of products from Pakistan, and Pakistan will cut tariffs by an average range of 22 per cent on 575 kinds of products from China.

The negotiations on the Sino-Pakistan FTA were kicked off in April this year, when Premier Wen Jiabao visited Pakistan.

The bilateral trade between the two countries has been expanding quickly this year. In the first 10 months, the total exports and imports reached US$3.4 billion, soaring 44 per cent year-on-year. But the trade is severely imbalanced, and, for example, China had a trade surplus of US$1.9 billion last year compared to a total trade volume of US$3.1 billion.

Bo Xilai, the Minister of Commerce, said China has noted the situation and he believed the FTA, which may have many contents in favour of Pakistan, will help to ease the problem.

"And we also encourage Pakistani companies to engage in more market promotion in China, and the Chinese Government will give as much support as possible," Bo said.

Pakistan Commerce Minister Humayun Akhtar Khan said besides trade, China and Pakistan should expand their economic exchanges to a broader level.