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FTA phase 2 delayed by a month; will

take effect from Jan 1

The second phase of the Free Trade Agreement tariff concessions enjoyed by the ASEAN countries.
(FTA) between China and Pakistan will take effect
from January 1, 2020 instead of December 1, 2019 Under the Phase-II of China-Pakistan FTA, both
as it has been delayed for a month reportedly due to countries will liberalise 75 percent of tariff lines for
delays in government approvals and protocols on the each other. The agreement covers 313 tariff lines of
Chinese side. US $8.7 billion of Pakistan's overall exports and US
$64 billion of China’s global imports. A total of 1,037
A joint statement is expected to be released after the products will now have duty-free access to the
Chinese approvals are acquired. Chinese market; textile and garments sector is at the
forefront of this deal and will help enhance the
In December, Abdul Razak Dawood, Adviser to the sector’s exports to China as it offers the same duty
Prime Minister for Commerce, Textile, Industry & free access enjoyed by ASEAN countries. A total of
Production and Investment, announced that the 1,760 or 25 percent of tariff lines are categorized as
second phase would come into effect from Decem- Protected Tariff Lines under the agreement and
ber 1 and it was becoming operational earlier than covers 37 percent of Pakistan's imports from China.
usual. He said that it usually took a year to make
such agreements operational between countries but
because of the special relations enjoyed by both the During the first phase, local manufactures com-
countries, this agreement would become operational plained about the unbalance in the deal, especially
from December 1. the textile sector, which raised concerns about the
favours it granted the Chinese textile industry. Tariffs
The textile sector of Pakistan expected to get a boost were imposed on Pakistani garment exports during
in exports to China as the phase II of the FTA the first phase, whereas the country’s competitors
between China and Pakistan as it offered the same from the ASEAN had duty free access.

Ethiopia – the next textile

manufacturing hub?

Despite challenges like energy supply, customs China Chamber of Commerce for Import and Export
procedures, lack of backward linkages and insuffi- of Textile and Apparel (CCCT), according to an ITC
cient skills, Ethiopia has the potential to become a press release.
global textile manufacturing hub with its wide and
young labour pool, growing market potential, The event attracted more than 100 international
advantageous trade agreements and strategic buyers, potential Chinese investors, representatives
position, participants agreed at a recent dialogue in of Chinese and foreign companies in Ethiopia and of
Addis Ababa. Ethiopian institutions. It was followed by field visits to
factories in several industrial parks around Addis
The dialogue on Ethiopia’s potential to become the Ababa.
next textile and apparel (T&A) supply base for the
world was organised in November by the Internation- The Ethiopian government has also prioritised the
al Trade Centre (ITC) under the Partnership for development of this sector, setting up the Ethiopian
Investment and Growth in Africa (PIGA) project. The Textile Industry Development Institute (ETIDI) to
discussion was organised in collaboration with the strengthen the overall value chain, and created a
Ethiopian Investment Commission (EIC) and the conducive investment climate for the sector.

November/December 2019