Pak-China FTA Phase II enters into force

ISLAMABAD: Phase II of the Pakistan-China Free Trade Agreement (FTA) entered into force on Wednesday after the issue of regulatory orders (RFOs) to implement the protocol agreed between the two countries.

According to a published declaration, to implement the agreed protocol, "transposed the list of offers and developed an ORP". He also claimed that the SRO was developed in consultation with the Ministry of Commerce.

The Federal Revenue Office (FBR) has stated that Phase II of the ALS in China Pakistan will enter into force through SRO1640 (I) / 2019 from January 1 (today) and will replace the old SRO 659 (I) / 2007 which has been approved in June 2007.

“The Pakistan Elimination Schedule / List of Offers shared by the ministry is divided into categories A0, A7, A15, MOP1, MOP2, C1 and C2. Customs duties on 3251 tariff lines in category A0 will be completely eliminated and these goods will be free of customs duties from 01.01.2020. In category A07, the duty structure will be gradually reduced towards elimination from the 2nd to the 7th year and in category A15 the duty structure will be gradually reduced towards the elimination from the 4th to the 15th year. In the margin of preference (MOP) There are two categories: in MOP1, customs tariffs will be reduced by 20 percent of the base rate on the date of entry into force of this protocol and in MOP2 the tariff structure will be reduced by 20 percent of the base rate in two years Customs duties on originating products foreseen in category C1 will be maintained at the base rates and in category C2 they will not be subject to any concessions, "said the note.

Pakistan and China signed the ALS-II in Beijing on April 28, 2019 and, based on the new ALS, Pakistan had obtained improved and deeper concessions on the products of its export interests, revision of the safeguard mechanism for the protection of the national sector, including the balance of the payment clause as a safety valve against balance of payments difficulties and the effective application of electronic data exchange.

The second phase of the FTA will offer Pakistan the opportunity to increase its exports to China by $ 4-6 billion over the next five years.

The main feature of the FTA are the safeguard measures under which Pakistan can limit imports from China if it believes that its industry will harm the import of these particular items.