Exclusive by Zafar Hussain in Beijing
BEIJING, 8 Nov 8: The second phase of China-Pakistan FTA (CPFTA) is set to come into effect from 1 December 2019, according to Pakistani official sources.
China agrees for the immediate elimination of tariffs on 313 most priority tariff lines of Pakistan’s export interest giving treatment on a par with ASEAN.
These 313 tariff lines cover over $8.7 billion worth of Pakistan’s worldwide exports and $64 billion worth of Chinese global imports. This will help to lessen Pakistan’s trade deficit and give support to its economy.
In terms of the complete offer made by China, over $19 billion of Pakistan’s exports will be covered, which corresponds to $1.6 trillion of the Chinese global imports.
The major products on which tariff have been eliminated are:
- other animal products
- prepared food
- engineering goods including:
- auto parts
- home appliances machinery.
Increase in the sensitive list from 10% to 25% which comes to 1760 tariff lines and covers 37% of Pakistan’s imports from China. This will give a fair amount of production to Pakistan’s domestic industry from import from China.
More on China’s economic & military rise & Xi Jinping:
If beating US economy by $trillion every year is an indicator, China to emerge victor from trade war with US
How 40-year reform has paid off China in economic development
How China beats US economy by a trillion dollar every year
With a parade, China announces itself as the next superpower: TIME
How China is viewed by Pakistan & the world
Xi Jinping: most powerful Chinese leader since Mao
Xi: Party’s absolute leadership over army
The World Bank, meet your challenger: China-led AIIB
BRICS New Development Bank to increase lending to $2.5B next year
Africa: Nigeria largest economy, China largest single trading partner
Chinese smartphone maker Xiaomi enters Pakistan
At 350kph, China high-speed train ups the game
The major protected industry includes:
- textiles and clothing
- iron and steel
- electrical equipment
- paper and paper board
- glass and glassware
- surgical instruments
- articles of the stones and plastics
- miscellaneous goods
Talking to China Economic Net, Badar uz Zaman, commercial counsellor of Pakistan embassy in Beijing, said that the implementation of 2nd phase of CPFTA will increase further $1 billion Pakistani exports to China.
Under the new agreement, effective and robust measures have been taken to protect domestic industry from a surge in imports from China. Revision of safeguard remedial measures will provide protection of maximum 23 years against an import surge that may cause injury or threaten to cause injury to the local industry, said another official on condition of anonymity.
More BRI, SCO stories
What is reshaping the world while we are unaware?
What China signalled through Belt and Road Forum
China’s world-reshaping Belt and Road Initiative
Pakistan at Shanghai Cooperation Organisation (SCO): A timeline
What is in for Pakistan and India in SCO Qingdao Summit?
In order to avoid miseducation and under-invoicing of import from China, a system of electronic data exchange has been introduced in the trade taking place under the framework of the Free Trade Agreement (FTA).
The Phase-1 of FTA between the two neighboring countries was signed on 24 November 2006 and became operational in 2007, while negotiations for the second phase of the CPFTA were started in 2011.
Have you seen CPEC stories on this blog?
CPEC fact sheet: 2013-2020
16 CPEC projects in Balochistan, 8 in KPK: Chinese Embassy
Chinese Embassy shares progress on CPEC projects
3 false reports about CPEC in one day far too many?
40 CPEC projects in 4 photos & 60 seconds
CPEC gets 4-layer security as Gwadar to be weapon-free
Subscribe to our YouTube channel: Wali Zahid
After eleven rounds of negotiations, both sides concluded the agreement in April 2019 in Beijing.
Under the second phase of CPFTA, Pakistan has secured enhanced and deeper concession on products of its exports interest revision of safeguards mechanism for the protection of the domestic industry, the inclusion of the balance of payment clause as a safety valve against the balance of payment difficulties and effective enforcement of the electronic data exchange.
Moreover, the Chinese side also has agreed to accommodate Pakistan’s request for immediate market access on its priority products, tariff reduction modality based on the principles of “less-than- reciprocity” longer phased out period for tariff reduction and effective safeguard measures for protection of the domestic industry.
Understanding Pakistan Series
Back to the future: Pakistan in 2050
Wali on Pakistan of future
Long Term Orientation in Pakistan: from Zero to 50 in 2 years
Pakistani culture through 6-D Model
Native languages in Pakistan
How future oriented are we?
How we messed up Pakistan: A series by Wali
Pakistan’s two value crimes no one talks about
Is Whatsapp your source of info? Welcome to Project Ignorance