Pakistan Renegotiates Terms and Tariff for 2nd Phase of FTA With China

Pakistan has started deliberations with China to renegotiate the terms and tariff lines for the second phase of the Free Trade Agreement (FTA), this was revealed by officials of the Ministry Of Commerce.

Official sources told ProPakistani that the negotiations during Prime Minister Imran Khan’s recent visit to China also included at least 74 items and tariff lines.

Pakistan has started drafting a renegotiation exercise concerning 38 exports items to China after last week’s parleys at the highest levels in Beijing.

The sale of these items in China failed to help Pakistan improve its export proceeds. Pakistan has already taken up the issue with Beijing, with an indication that benefits from 38 items of export to China have not been encouraging.

The weekend negotiations at the technical level in Beijing, however, gave Pakistan hope that China might engage in serious renegotiation on the present level of FTA benefits. Pakistan hopes that talks might be completed before the conclusion of the budgetary exercise for 2022-23.

China has also given low-duty-tax facilities on these 38 items to other countries. Pakistan has repeatedly pointed out to Beijing that such a facility to other countries rendered Pakistani exports less attractive on account of Chinese free-market choices.

China, in response, has reassured Pakistan during talks last week that this issue would be clubbed together with new investment packages offered to Pakistan.

Pakistan and China signed the first phase of the Free Trade Agreement in 2006. Currently, both sides are implementing the second phase of FTA, which aims at further increasing bilateral trade. Pakistan’s current exports to China stand at $2 billion, whereas China exports goods worth $18 billion to Pakistan. The second phase of FTA is largely in China’s favor. Pakistan wants more concessions exclusive to its products like rice to have more market access and to increase its share in bilateral trade.