ISLAMABAD: Negotiation between Pakistan and China, the meeting on Freed Trade Agreement (FTA) concluded on Friday with special focus on reducing Pakistan's trade deficit in bilateral trade and tariff concessions to each other.
The first phase of the FTA between the two countries would conclude on 31 December, 2012 and the respective organizations of the two governments have started negotiations to finalize the modalities for the second phase which would be implemented from January 2013.
The current discussion focused on devising a comprehensive plan to encourage exports from Pakistan to China and help reduce the huge trade gap between the two neighbouring countries.
Although the trade between the two countries has witnessed growth following the signing of the FTA, the balance is very much in favour of China, exports of which have increased by 36 percent on year-on-year basis.
The overall trade between the two countries in 2010 was at $8.67 billion, showing an increase of 28 percent, said Deputy Director Chinese Ministry of Commerce, Zhu Hong while addressing the session here.
Out of the total trade, Chinese exports to Pakistan stood at US$6.9 billion, showing an increase of 36 percent while its imports from Pakistan were recorded at US$1.78 billion, showing upward trend of 37 percent, Zhu Hong added.
He said that tariff concessions would be negotiated for the second phase of the FTA to help Pakistan enhance its exports to China.
He said that both the countries would take steps to further enhance their bilateral trade and the friendship adding that China attaches a great importance to the bilateral trade. Earlier, speaking on the occasion, Senior Joint Secretary Ministry of Commerce Rehmatullah Khan said that Pakistan was passing through difficult times following the war on terror, recent floods that hit the economy badly and the global economic meltdown that had cast negative impact on country's exports.
He highlighted the importance of evaluating the implementation of the 1st phase of the FTA to ensure that the second phase of the agreement improves the efficiency and helps provide more benefits to both the countries.
He said that enhancing trade volume between the two countries was a healthy sign adding that the exports from Pakistan have reached to US$1.5 billion while the overall trade would touch US$ 10 billion figure.
He, however, showed concern over the increasing trade deficit of Pakistan in bilateral trade and stressed the need for enhancing Pakistan's exports to China adding that negotiations of the second phase would focus on this important issue.
It is pertinent to mention here that Pakistan and China signed Free Trade Agreement in June 2006 which came into implementation from July 2007.
The FTA was aimed at reducing tariffs on each other's imports in two phases.
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