Kashar News, Pakistan
Pak, China agree to FTA
6 April 2005
ISLAMABAD, April 6 (Kashar News): Pakistan and China Wednesday finally agreed on the ever first free Trade Agreement (FTA) under which both sides have agreed to cut down excise duty and bring the tariff to zero on the different daily use commodities.
“The decision was the part of one to one meeting between Prime Minister Shaukat Aziz with his Chinese counter part Wen Jiabao here,” Humayoon Akhter, Federal Minister for trade informed media men here at a news conference.
He said that agreement on Early Harvest Programme (EHP) has also been signed with China, adding that Early Harvest Programme was a list of items for bringing customs duty to zero even prior to negotiations and conclusion of FTA.
Main aspects of EHP include a common list of items on which both sides would bring the tariffs to zero ans a separate list by each country consisting of items of respective export interests. Duty on these items would also be reduced to zero.
The schedule of tariff reduction has also been agreed, he said adding that the first reduction would take place on lst January 2006, and by January 1, 2008 tariff would be brought to zero on all items indicated in the afore-mentioned two lists.
Pakistan and China have existing Preferential Trade Agreement. This Agreement has also been enlarged and has been made a part of the Early Harvest Programme. In other words PTA will merge into bilateral FTA with the implementation of the Early Harvest Programme, the minister added.
The existing PTA on which China and Pakistan had reduced tariff on margin of preference i.e. a percentage of the normal tariff, has also been extended.
“This list now consists of 1671 items on the Chinese side and 575 items in the list of Pakistan. This extended list will also be made part of the Early Harvest Programme”, the minister mentioned.
He said that PTA would later merge into bilateral FTA from January 1, 2006, adding that concessions on the existing PTA (186 items by Pakistan and 917 items by China”, would remain in operation till then.
“In the Early Harvest Programme we have included all items of our export interest i.e. bed-linen, table linen 8s other home textiles, towels, cotton 8s blended fabrics, synthetic yarn, synthetic fabrics, mangoes, oranges, dates, tarpauin and marble articles like tiles etc., surgical goods, sports goods 8v cutlery etc., certain dyes., guar gum, industrial alcohol and medicines,” an handout issued on the occasion said.
He said China would reduce tariff on all these items to zero upto January 1, 2008. This would give tremendous market access to Pakistani exports.
The minister also mentioned that Pakistan has undertaken to bring duty on certain machinenT and a few chemicals, to zero.
This reduction in tariff would also help Pakistan by reducing the cost of setting up new factories and attracting foreign investment in Pakistan.
In the Early Harvest Programme, he said that both sides have also undertaken to bring the duty to zero on reciprocal basis on certain vegetables, fruits and mineral products. While deciding the Common List of items the interests of our growers and mining industry have been kept in consideration.
To a query Humaun Akhtar said that during the Shaukat Aziz’s visit to China in December 2004, it was decided that a Joint Study Group would be established to study the feasibility of Pak-China Free Trade Agreement.
“Although it was originally thought that it would take six months to complete the Study, which was in itself a very short time for such Studies, the Joint Study, however, was concluded in only three months’, he added.