CPFTA talks get nowhere

The 9th round of parleys on China Pakistan Free Trade Agreement (CPFTA) known as phase-II held in Beijing remained inclusive as Pakistani team did not have the mandate to agree on things beyond its authority, well-informed sources in Commerce Ministry told Business Recorder. "Nothing is finalized in this round. All issues discussed with Chinese are subject to further discussions and agreement by either side," the sources added.
According to an official statement, during the 9th round of negotiations the Pakistani delegation led by Secretary Commerce Younus Dagha, demands of Pakistani exporters and industries for accommodating in the final draft of the CPFTA were presented including those from exporters to provide tariff concessions equivalent to the ASEAN countries. Various industries and chambers had provided input to the Ministry of Commerce during pre-negotiation consultations, for protection of local industry from Chinese imports by disallowing tariff concessions on several products.
The Secretary Commerce also suggested incorporating clauses for safeguarding industries and the economy from any undue pressure on the balance of payments position. The Chinese side also agreed on Electronic Data Exchange which will help limit the chances of under-invoicing, another major concern of the Pakistani industry.
The Chinese side was led by Wang Shouwen, Vice Minister, Ministry of Commerce, Peoples Republic of China and comprised of 16 officials of various Chinese Ministries. The sources said, EDI system is almost finalised and trial will start by mid of next month whereas final implementation of this system will commence in April. With the implementation on EDI system, the issue of under-invoicing and difference in trade figures between the two countries will be resolved.
According to sources, safeguard measures and Tariff Related Modalities (TRSM) were discussed but not finalised. Pakistan proposed liberalisation of 75 per tariff lines with 25 per cent on the sensitive list including a 5 per cent Margin of Preference (MoP). The sources further stated that investment issue also came under discussion. Chinese Director General Investment was requested to bring his delegation to Pakistan for further deliberations.
The lists of categories would be reviewed in the 9th round of discussions. Pakistan has requested five items for drawback. One of the major demands of Pakistan, ie, zero duty on 68 items of its interest to further proceed on phase-II remained inconclusive.
"The list has been reduced to 57 items from 68 items but nothing has been finalised in this round. The list will come under consideration in the next round to be held next month in Islamabad" , the sources continued. The official statement claims that after intense negotiations for two days, the Chinese side agreed to accommodate the concerns and demands in the amended FTA which is expected to be signed in March when the Chinese Vice Minister will visit Islamabad along with his delegation.
"Chinese take decisions very slowly; and always de-track," sources maintained. FTA-II negotiations began in 2012 to finalize the revised version of CPFTA.