BEIJING – The second phase of China-Pakistan Free Trade Agreement (CPFTA)has come into the effect from today (Sunday) allowing the Pakistanimanufacturers and traders to export around 313new products on zero duty tothe Chinese market.
The two countries have completed all the legal procedures and formalitiesto start the implementation of the agreement from today,” well-informedsources confirmed here on Sunday.
Both Pakistan and China signed a protocol for the implementation of theagreement during the last visit of Prime Minister Imran Khan to China,under which, Pakistan has got the export concession on 313 new items.Pakistan is already enjoying zero duty on export of 724 products to Chinaunder the first FTA signed between the two countries in 2006. After theimplementation of the second FTA, Pakistan has been allowed to export atotal of 1047 products to China on zero duty.
The new facility will particularly benefit the textile sector to enhanceits export to China as textile exports to China will virtually be duty-free.There are a number of other items particularly leather and agricultureproducts as well as confectionery and biscuits etc which Pakistanimanufacturers can export to China.
While commenting on the positive impacts of implementation of the secondphase of the trade agreement, the sources informed that after theimplementation, Pakistan can now increase its export around US$ 1 billionin the short term while the export of these items are likely to touch US$4-5 billion in the medium term after setting up a new industry in thespecial economic zones being constructed in Pakistan under China-PakistanEconomic Corridor (CPEC) flagship project.
After this agreement, Pakistan can enhance its exports to China up to US$10 billion in the next few years as the volume of the Chinese import marketis around US$ 64 billion.
The per capita income in China is around US$ 10,000 while buying capacityof the people is increasing gradually.
China has organized import expos as it wants to import quality productsfrom different countries including Pakistan. If our traders activelyparticipate in different trade fairs in China to market their goods, theycan get import orders with good price.
Regarding further benefits, sources said, now not only Pakistanimanufacturers can enhance exports of different goods to China but theChinese manufacturers who are interested to shift industry to Pakistanowing to cheaper labour and other resources, can export goods to China andother countries in the world.
Pakistan has already signed FTA with Sri Lanka, Malaysia and PreferentialTrade Agreement (PTA) with Indonesia under its trade liberalization policyto enhance its exports.
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There are active discussions to sign FTA with South Korea in a bid toprovide more and more access to Pakistani manufacturers to the new markets.China has already become the second-largest export destination of Pakistanitraders after the US.
The present government has resolved export rebate issue and started thedisbursement to traders for which the finance ministry is allocating fundswhile it is giving subsidy to exporters on electricity and gas.
The State Bank of Pakistan has also increased funds limits for the tradersand manufacturers under export refinance scheme which will help increasethe exports.
Regarding the impact of cooperation in the agriculture sector between thetwo countries, sources said that China has imposed a strict quality controlsystem on food-related items.
Chinese experts inspect and qualify the manufacturing facility beforeallowing imports. China also imposed quota and Pakistani traders canbenefit from it if they achieve all the standards.
A quota of 350k tons yarn, 300k tons sugar and 200 tons rice respectivelywas given by China under US$ 1 billion zero percent import tariff facilityand exporters are actively availing this opportunity.
“We want to complete the quarantine procedures of wheat and tobacco to beable to export these products to China.”
Currently, cotton yarn, copper, rice, chromites nephrite, seafood, andethylene alcohol are main products being exported to China.
