Sino-Pak free trade pact Phase-II takes effect

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KARACHI: Phase two of the much-touted China-Pakistan Free Trade Agreement came into effect as of Wednesday, said a trade official. The new phase will allow Pakistani manufacturers and traders to export around 313 new products to the Chinese market with zero duties, Secretary Ministry of Commerce Ahmad Nawaz Sukhera said in a tweet. The implementation of the agreement’s second phase, he said, would make 90% of China’s global imports duty-free for Pakistan. “Confident that it will help our exports increase substantially,” he added. Beijing earlier approved premature activation of the second phase of the pact with Islamabad, signed during Prime Minister Imran Khan’s visit to China last April. Pakistan is already enjoying zero duties on exports of 724 products to China under the first free trade pact signed between the two countries in 2006. After implementation of the second pact, Pakistan has been allowed to export more than 1,000 products to China with zero duties. Pakistani pilots to get technical training in Turkey The new facility will particularly benefit the agriculture, leather, confectionery items, and biscuits product sectors as well. Last year, Islamabad signed an agreement with Beijing to use Chinese currency for bilateral trade to get rid of the dollar burden in $15 billion bilateral trade. According to official data, Pakistan and China’s bilateral trade volume grew to reach some $15.6 billion in the 2019 fiscal year, up from $2.2 billion in 2005. The two longtime allies are also partners in the multi billion-dollar China-Pakistan Economic Corridor (CPEC), part of China’s Belt and Road Initiative, an ambitious project to connect Asia with Africa and Europe via land and maritime networks to boost trade and stimulate economic growth. The $64 billion mega-project signed in 2014 aims to connect China’s strategically important northwestern Xinjiang province to the Gwadar port in southern Pakistan through a network of roads, railways, and pipelines to transport cargo, oil, and gas. The economic corridor will not only provide China with cheaper access to Africa and Middle East but will also earn Pakistan billions of dollars for providing transit facilities to the world’s second-largest economy. The Federal Board of Revenue (FBR) on Wednesday issued the Statutory Regulatory Orders (SRO) to implement the protocol agreed between China and Pakistan for the second phase of the Free Trade Agreement (FTA). A statement released by the board said that in order to implement the agreed protocol it has “transposed the offer list and developed a SRO”. It also said that the SRO was developed in consultation with commerce ministry. FBR has said that the China Pakistan FTA’s Phase-II will come into effect through SRO1640(I)/2019 from January 1 (today) and will replace the old SRO 659(I)/2007 which was passed in June 2007. “The Tariff Elimination Schedule/ Offer List of Pakistan shared by Ministry is divided under the categories A0, A7, A15, MOP1, MOP2, C1 and C2. The Customs Duties in 3251 Tariff Lines in the A0 category will be eliminated entirely and such goods shall be free of customs duty from 01.01.2020. In the category A07 the duty structure will be tapered towards elimination from Year 2 to year 7 and in Category A15 the duty structure will be tapered towards elimination from Year 4 to year 15. In the Margin of Preference (MOP) there are two categories, in MOP1 the Customs Duties shall be reduced by 20% of the base rate on the date this protocol enters into force and in MOP2 the duty structure will be reduced 20% from the base rate in two years’ time. The Customs Duties on originating goods provided for in category C1 shall remain at base rates and in category C2 shall not be subject to any concession,” said the statement. Pakistan and China inked the FTA-II in Beijing on April 28, 2019 and under the new FTA Pakistan has secured enhanced and deeper concessions on products of its export interests, revision of safeguards mechanism for protection of the domestic industry, inclusion of the balance of payment clause as a safety valve against balance of payments difficulties, and effective enforcement of the electronic data exchange.–Agencies