Pakistan has reportedly sought zero tariff on 40 per cent of its products immediately on implementation of the second phase of China Pakistan Free Trade Agreement (CPFTA), well informed sources in Ministry of Textile Industry told Business Recorder.
The proposal was deliberated in the 5th meeting of second phase negotiations on China- Pakistan Free Trade Agreement (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 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 has not suggested 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.
Both sides continued discussion on Tariff Reduction Modality (TRM) for the second phase of CPFTA. Pakistani side explained that the 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.
Pakistani side reiterated that the proposed 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. The Chinese side assured that it would also present Pakistan's position to their stakeholders and submitted its request list comprising of 3872 tariff lines, for the second phase of CPFTA. Pakistani side will also submit its request list before the next meeting and the two agreed to wrap up the negotiations on TRM at the earliest.
As regards the matter of adjustment of 1341 tariff lines in the first phase provided by Pakistani side Chinese side explained that re-adjustment within the first phase is not possible as this has already been implemented. However, Chinese side responded that concerns raised by Pakistan would be duly considered in the second phase of CPFTA.
Chinese side 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. Pakistan agreed to examine the Chinese request.
With regard to enhancing trade in services under the CPFTA, Chinese side shared findings of their internal findings. Based on their findings, Chinese side shared preliminary list of sectors/sub -sectors to be considered for deepening of concessions under second phase of CPFTA. Pakistani side appreciated the work done by China and agreed to examine it.
Pakistan further stated that spadework for conducting internal study has been done and it would possibly be completed before the next meeting. China apprised Pakistan that they have already finished the internal procedures for entry into banking services protocols. Pakistani side revealed that Pakistan will endeavour to complete remaining procedural requirements with regard to entry into force of the banking services protocol at the earliest and notify accordingly.
The progress on SPS issues was discussed in details by the both sides. Chinese side reconfirmed that there is no ban/ restriction on the export of rice, mango, and citrus from Pakistan to China. The list of rice exporters has been received by AQSIQ and shall be notified. AQSIQ is a ministerial administrative organ directly under the State Council of the People's Republic of China in charge of national quality, metrology, entry-exit commodity inspection, entry-exit health quarantine, entry-exit animal and plant quarantine, import-export food safety, certification and accreditation.
For rap-seed and canola meal, the Chinese side has already submitted inspection report to Pakistani side and on fulfilment of formalities. Exportation of canola and rape-seed meal could start after technical requirement to be fulfilled by Pakistan. AQSIQ has submitted a revised protocol for the export of citrus from Pakistan and China is expecting a feedback from the Government of Pakistan. The revised protocol will replace the earlier protocol signed between the two countries in 2005.
Chinese side also agreed to actively consider the request made by Pakistan side in 2012 to allow the export of cherries based on Past Risk Assessment (PRA) and necessary market procedures. The list of hot water treatment plants for export of mango to China has been received by AQSIQ. The 6th meeting of the second phase negotiations of CPFTA will be held on 14-16 October in Beijing.
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