Chinese to be told CPFTA causing Rs 21 billion loss: Dastgir to attend SCO ministers' moot

15 Sep, 2015

Minister for Commerce, Engineer Khurram Dastgir has left for China to attend a meeting of commerce ministers of Shanghai Cooperation Organisation to be held on September 16. Official sources told Business Recorder Dastgir will hold meetings with Chinese Prime Minister Li Keqiang and Commerce Minister Gao Hucheng to discuss the second phase of China Pakistan Free Trade Agreement (CPFTA) which is causing Rs 21 billion revenue loss.
According to sources, China has agreed to give Pakistan zero tariff at 70% of items while Pakistan on 40 percent immediately when the FTA-2 will be signed, Pakistan is negotiating to raise no concessions list to 20% as several Pakistani sectors have sought Ministry' s help to provide them tariff protection from influx of Chinese products.
Both the countries tabled their proposals in the 5th meeting of second phase negotiations on CPFTA held in Islamabad on August 3-5, 2015 led by Yao Wenliang, Deputy Director General, Ministry of Commerce China and Robina Athar, Additional Secretary, Commerce Ministry. Pakistan also proposed elimination of Chinese products tariff to zero on 10 per cent tariff lines within five years since the date of entry into force of the second phase of CPFTA. It was also proposed by Islamabad that tariff should be reduced to zero on 30 per cent of tariff lines within five years starting from 11th year of entry into force of the second phase of CPFTA. However, Pakistan did not agree to tariff reduction on 20 per cent tariff lines since the date of entry into force of second phase of FTA. China has tabled the list of traded services under CPFTA as follows: (i) medical and dental services; (ii) accounting and book keeping services; (iii) architectural services; (iv) research and development services; (v) printing and publishing; (vi) advertising services; (vii) telecommunication services (trunked radio services); (ix) courier services; (x) environmental services; (xi) financial services including insurance; (xii) health related social services; (xiii) tourism and travel related services; and (xiv) theme parks attraction services.
Pakistan is of the view that current proposal of TRM is based on extensive data analysis and stakeholders' consultation. Chinese side took note of Pakistan's proposed TRM and requested the Pakistani side may consult stakeholders again to improve the tariff liberalisation schedule in various categories of TRM. TRM is an outcome of intensive discussions with stakeholders and would make another attempt to convince stakeholders for further improvement as requested by the Chinese. China has already promised that it would also present Pakistan's position to their stakeholders and submitted its request list comprising 3872 tariff lines.
As regards the matter of adjustment of 1341 tariff lines in the first phase provided by Pakistani side China was of the view that re-adjustment within the first phase is not possible as this has already been implemented. China has raised the issue of removal of Regulatory Duty by Pakistan on a list of 255 items, already shared by them which are part of the tariff concession lists of the first phase of CPFTA. Pakistan responded that the Regulatory Duty has been levied on MFN basis and is not China specific.

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