FTA proves a milestone enhancing Pak exports to China
by Fatima Javed
ISLAMABAD, July 13 (Gwadar Pro) - The signing of China- Pakistan Free Trade Agreement phase-2 (CPFTA-2) proved to be a significant milestone in the economic and trade relations between the two countries.
The recent official data shows Pakistan’s export to China has enhanced by 34 per cent to $ 2.33 billion in the year 2020-21, the third-highest export figures during the 73 years of Pak-China relations.
During the COVID-19 pandemic when the land route was largely affected, the export increase was mainly by sea and air routes.
Negotiated well, CPFTA-2 significantly improved Pakistani exporters’ access to the USD 2 trillion Chinese import market and thus helped address the country’s ballooning trade deficit.
The second phase of CPFTA spanning 2019-2024 was finalized between the two countries in early 2019 and entered its implementation phase from January 1, 2020.
China gave immediate duty-free access for 3,707 (45%) tariff lines. A further 30% of tariff lines will have duty-free access by 2030. Tariffs on 412 tariff lines will be reduced by 20% in five years while tariffs will remain at base year (2013) levels for 1,867 (20%) tariff lines.
China is one of the largest consumer markets in the world. Therefore, it is a great opportunity for Pakistani companies to develop an understanding of China’s domestic trends. FTA in this regard can help increase Pakistan’s exportable products to China.
In future, Pakistan can work to identify new items exportable within the next two years. Working out a five-year plan can actively move upwards the value addition and product diversification.
Items manufactured in Pakistan with Chinese collaboration by the relocation of industries and re-export to other international markets should be developed.
Regular engagement of all chambers and trade bodies in Pakistan and China is necessary. Apart from these, all factors in trade links like shipping, cargo, air cargo, customs tariffs, labelling, translations, certifications, quarantine laws, etc. must be completely ironed out.
The first LNG project in Pakistan signed for upgradeBy Gwadar Pro Sep 24, 2021