Pakistan and China finalised two separate lists of 52 items on which duty would be reduced to zero rate by each side from January 1, 2006. An agreement to this effect was arrived at a meeting, held here between the officials of the Export Promotion Bureau (EPB) and the Chinese Ministry of Commerce.
EPB vice-chairman Zafar Mahmood, who led the Pakistan's side at the meeting, told APP on Friday that a duty-free structure has been worked out under the Early Harvesting Programme (EHP), which is a part of free trade agreement (FTA).
It would be implemented in three phases. The first reduction would take place on January 1 2006, and by January 1, 2008 tariff would be brought to zero on a number of other items, already indicated by the two sides.
The duty-free items have been decided on reciprocal basis to facilitate each other, strengthening economic partnership.
The 52 items that Pakistan would export to China duty-free include bed linen, table linen and other home textiles, terry towels, blended fabrics, synthetic yarn, synthetic fabrics, mangoes, oranges, dates, tarpaulin and marble articles, like tiles etc surgical goods, sports goods, cutlery, certain dyes, guar gum and medicines.
The list of items that would be exported to Pakistan from China duty free, include industrial machinery and chemical raw material.
Zafar Mahmood termed the duty-free arrangement as a big advancement in their bilateral trade, and added: "The existing trade volume does not match their existing tremendous goodwill and excellent diplomatic ties."
About cutting down of import duty on Chinese machinery and the raw material, he said it would reduce the cost of industrial machinery and generating further business activities in the country.
During the visit of Prime Minister Shaukat Aziz to China in December 2004, it was decided that a joint study group would be established to study the feasibility of Pak-China free trade agreement, "although it was originally thought that it would take six months to complete the study, which was in itself a very short time for such studies," he said.
The joint study, however, was concluded in only three months.
Pakistan has an operational PTA with China since January, 2004 under which China gave tariff concessions on 893 items and Pakistan has given similar concessions on 188 items.
And now under the EHP, the two countries will expand the concession on more items, gradually bringing the excise duty on zero rate by 2008.
Zafar Mahmood said the leadership of the two countries was taking personal interest to increase their economic exchanges. He hoped that the new proposed steps would help overcome a huge trade deficit in their bilateral trade. "It is up to the private sector to capitalise the growing opportunities," he asserted.
About his talks with the Chinese officials, he said it was agreed that the China Council for the Promotion of International Trade (CCIPT) and the EPB would take steps increasing participation of their businessmen in the annual exhibitions and fairs take place in their respective countries. The CCIPT held out an assurance that it would soon send a delegation to Pakistan for exploring trade and investment avenues, he said.
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