Home Textile China to extend duty free access on 313 more tariff lines

China to extend duty free access on 313 more tariff lines

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China has agreed to extend duty free access on additional 313 tariff lines under the proposed second phase of the china Pakistan Free Trade Agreement (CPGTA).

Under the FTA with China, Pakistan has ensured a safety valve in the balance of payments clause which will allow Pakistan to raise tariffs during periods of balance of payments difficulty. An increase of 10pc in the protected list of Pakistan agreed during phase I of CPFTA has been raised to 25pc (that comes to around 1760 tariff lines and covers 37pc of Pakistan’s imports from China), adding that 25pc includes sensitive list of 1410 items (20pc) and a list of 350 items given Margin of Preference (MOP) on the applicable rates (5pc).

Major protected industry includes textiles and clothing, iron and steel, auto, electrical equipment, agriculture, chemicals, plastics, rubber, paper and paper board, ceramics, glass and glassware, surgical instruments, footwear, leather, wood, articles of stones and plaster and miscellaneous goods or Pakistan’s almost entire industry.

Pakistan had already given substantial concessions on 60pc of our imports from China in Phase I and with this new Phase in place Pakistan will liberalize another 7pc in the next 15 years. Most of the concessions have been placed in a 15-year track.

The 7pc new liberalized trade constitutes raw materials, machinery and intermediate items which will help domestic industry become more competitive.

The sources further stated that China will be immediately eliminating tariffs on 313 highest priority tariff lines which cover over $8.7 billion worth of Pakistan’s global exports and $64 billion worth of Chinese global imports whereas, under the complete offer from China, over $19 billion of Pakistan’s exports will be covered to $1.6 trillion of Chinese global imports.

Under the 313 tariff lines currently our exports to China are less than 2pc of their total imports, and with these concessions Pakistan should expect to gain market share by at least 10pc which will come to around $6.5 billion per annum.

The 313 tariff lines constitute textiles and garments, seafood, meat and other animal products, prepared foods, leather, chemicals, plastics, oil seeds, footwear as well as engineering goods including tractors, auto parts, home appliances, machineries etc.

With the signing of FTA-II, almost 95pc of tariff lines will become part of the overall CPFTA framework and will therefore enable Electronic Data Exchange on these tariff lines which also constitute 95pc of the imports from China. Therefore this will be a giant step forward in terms of curbing under-invoicing and misclassification.

The revision of safeguard remedial measures will provide protection of maximum 23 years against an import surge that may cause injury or threaten to cause injury to our local industry. The measures also allow Pakistan to put in place provisional safeguards for 180 days before even proving the injury or the threat of an injury.

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