Second phase of China, Pakistan FTA effective from today

• Under the second phase of CPFTA, Pakistani manufacturers and traders are allowed to export around 313 new products on zero duty to the Chinese market.
• Import of 6,786 items from China exempted from duty.

The second phase of China Pakistan Free trade Agreement (CPFTA-II) has initiated from today January 1, 2020.

Under the second phase of CPFTA, Pakistani manufacturers and traders are allowed to export around 313 new products on zero duty to the Chinese market.

Pakistan was already enjoying zero duty on export of 724 products to China under the first FTA signed between the two countries in 2006, and after the implementation of the second phase of FTA, the number of export goods from Pakistan has been raised to 1047 products to China on zero duty.

The new facility will particularly benefit the textile sector to enhance its export to China as textile exports to China will virtually be duty free.

Meanwhile, the Federal Board of Revenue (FBR) has granted concessionary rate of customs duty or zero percent duty on the import of 6,786 items from China with effect from January 1, 2020.

The reduced rate of duty, fixed rate or zero percent duty would be applicable on the import of crude oil (Rs 8000/MT), palm stearin (Rs 9050/MT), RBD Palm oil (Rs 10800/MT), palm olein (Rs 9050.0/MT), pure breeding animals, meat of goats, fish, yogurt, whey powder, butter, dairy spreads, cheese, honey, vegetables, mushrooms, green tea, black tea, rice, beverages, gold, silver, varnishes, artificial staple fibers, vehicles parts, satellite communication equipment, radio navigation apparatus, parts/accessories for cable TV/satellite receivers, energy saving lamps, cameras, energy saving tubes, components for the assembly/manufacture of vehicles in any kit form and other items specified in FBR’s SRO 1640(I)/2019.

The FBR has issued the SRO 1640(I)/2019 to implement the protocol agreed between China and Pakistan. The Board in order to implement the agreed protocol, after thorough deliberations in consultation with Ministry of Commerce, transposed the Offer List and developed a Statutory Regulatory Order. The

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.