China and Pakistan will next month begin reducing tariffs on one
another's imports, in line with the two countries' Free Trade
Agreement (FTA), according to a senior Chinese trade official.
Beginning July 1, the two countries will carry out the tariff
reduction in two phases, said commerce ministry spokesman Wang
Xinpei yesterday.
In the first five years, the two sides will cut tariffs on up to
85 percent of imports in five categories. In the following five
years, China will eliminate or cut tariffs on Pakistan-originated
products, ranging from farm products to textile and electronic
goods, while Pakistan will remove or cut tariffs on Chinese food,
electronics and machinery.
After the reduction, China's average tariff on imports from
Pakistan will be lowered to 8 percent, 0.67 percentage point lower
than the tariff rate for most-favored nations.
According to the ministry, the two sides will review the
implementation of the first phase in a bid to finalize the
timetable for tariff reduction in the FTA's second phase, which was
described as an "open agreement".
"We aim to adopt zero tariffs on up to 90 percent of imports, in
terms of categories and trade volume, from each other in a short
period," said a commerce ministry official who declined to be
named.
The agreement signed last November is China's third, following
FTAs with Chile and the ASEAN.
"Chinese enterprises will largely benefit from the FTA as market
access will be increased and trade and investment environment
improved," the official said.
The agreement provides opportunities for Chinese companies to
invest in Pakistan, he said.
"In the ongoing talks on services, the two sides are discussing
how to reduce trade barriers in the service sector," he added. "We
hope enterprises will keep an eye on the talks to make full use of
the agreement."
(China Daily June 29, 2007)