China, Pakistan to Cut Tariffs Under FTA

29 June 2007: Beijing (PTI)

China and Pakistan will reduce tariffs on each other's imports from July 1, in line with their Free Trade Agreement (FTA), a senior Chinese trade official has said.

"Beginning July 1, the two countries will carry out the tariff reduction in two phases," Commerce Ministry spokesman Wang Xinpei said.

In the first five years, the two sides will cut tariffs on up to 85 per cent of imports in five categories.

In the following five years, China will eliminate or cut tariffs on Pakistan-originated products, ranging from farm products to textile and electronic goods, while Pakistan will remove or cut tariffs on Chinese food, electronics and machinery.

After the reduction, China's average tariff on imports from Pakistan will be lowered to eight per cent, 0.67 percentage points lower than the tariff rate for most-favoured nations.

Beijing and Islamabad, the 'all-weather' friends, will review the implementation of the first phase in a bid to finalise the timetable for tariff reduction in the FTA's second phase, which was described as an "open agreement".

"We aim to adopt zero tariffs on up to 90 per cent of imports, in terms of categories and trade volume, from each other in a short period," the state-run 'China Daily' quoted an unnamed Commerce Ministry official as saying.

The Sino-Pakistani FTA agreement signed last November is China's third, following FTAs with Chile and the ASEAN.

"Chinese enterprises will largely benefit from the FTA as market access will be increased and trade and investment environment improved," the official said.

The agreement provides opportunities for Chinese companies to invest in Pakistan, he added.

Link: The Economic Times