Pakistan and China will discuss expansion of Free Trade Agreement (FTA) in the coming June with an aim to boost bilateral trade. "We will discuss the issues of eliminating the tariffs and prepare a comprehensive package for the implementation of the second phase of the FTA," a top official of the Ministry of Commerce told APP. The first phase of the FTA is scheduled to end on December 31, 2012, which will be followed by the second phase from January 2013, the official added.
The respective organisations of the two governments have finalised the modalities for the negotiations for the implementation of second phase of the FTA during a two-day long session held in Islamabad during the second week of this month.
According to Ministry of Commerce sources, both the countries will eliminate tariffs on around 90 percent products, both in terms of tariff lines and trade volume within a reasonable period of time on the basis of consultation and accommodation of the concerns of both the countries.
Meanwhile, Joint Secretary Commerce, Rehmatullah Khan told APP that during the upcoming discussions on FTA, efforts would be made to minimise the trade gap between the two countries. According to trade data, the overall trade between the two countries in 2010 was $8.67 billion, showing an increase of 28 percent. Chinese exports to Pakistan stood at $6.9 billion, showing an increase of 36 per cent, while its imports from Pakistan were recorded at $1.78 billion, showing upward trend of 37 per cent, he added.
"During the recent negotiations, both the sides have realised that the growing trade gap needs to be minimised," Rehmatullah remarked. He said that China was a huge economy and was having trade surplus with all partner countries, adding that the FTA proposals would be formulated in a way to help Pakistan boost exports to China to minimise the gap.
He said that enhancing trade volume between the two countries was a healthy sign, adding that negotiations for the second phase would also deal with this particular issue. It is pertinent to mention here that Pakistan and China signed Free Trade Agreement in June 2006, which came into effect from July 2007. The FTA was aimed at reducing tariffs on each other's imports in two phases.
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