China-Pakistan free trade agreement on services to be in effect soon

[Omar1984]

China-Pakistan free trade agreement on services to be in effect soon

February 23, 2009


Background: milestones of China-Pakistan Free Trade Agreement

In November 2003, China and Pakistan signed the Preferential Trade Arrangement. In October 2004, the two countries launched the joint research on free trade agreement. In April 2005 the two sides singed the "Early Harvest Program".

In December 2005, China-Pakistan "early harvest" preferential tariff program for the Free Trade Area is signed.

On Nov. 24, 2006, China and Pakistan signed a free trade agreement (FTA), in which they plan to begin to reduce or eliminate tariffs on all products in two phases from July 1, 2007.

In October 2008, the two sides singed a supplement agreement on their FTA.

In December 2008, the negotiations on bilateral trade in services are concluded.

China and Pakistan signed the free trade agreement on service in Wuhan, the capital city of Hubei Province in central China, on Feb. 21 during Pakistani President Asif Ali Zardari's visit to China. The pact, which is expected to be effective as of the first half of the year, will lead to a China-Pakistan comprehensive free trade zone including trade in goods, trade in services and investment.

According to the press release by China's Ministry of Commerce on its website on Feb. 23, Pakistan will further open 102 sub-sectors under 11 major sectors out of the 12 WTO-defined 12 sectors and China will further open its 28 sub-sectors under six major sectors.

Specifically, Pakistan will relax its shareholding restrictions on China's investment in sectors of construction, telecom, finance, distribution, health care, environmental protection, tourism, transportation, research and development and IT education. Chinese service providers in those sectors will be allowed to hold 60 percent to 99.99 percent stakes, compared with the cap of 40 percent to 51 percent of foreign investment.

Pakistan has agreed to grant more favorable treatment to Chinese companies in certain conditions. Solely China-funded businesses are possible particularly in courier, telecom and tourism.

Fifty-six sectors, including five major sectors of distribution, education, environment, transportation, entertainment and sports, will be open to Chinese providers for the first time. Chinese investors will also have the access to service markets on sub-sectors like legal affairs, accountancy, architecture, printing and publishing, veterinary, etc.

Pakistan will also provide better conditions to facilitate personnel flow.

The sectors that China will open mainly include mining, environmental protection, health care, tourism, sports, transportation, translation, real estate, computer, marketing consultancy, etc.

China and Pakistan reached the free trade zone agreement in November 2006, which focuses on trade in goods and investment. The new deal on trade in service means the two countries will build a comprehensive free trade zone.

In MOC's press release, an official with the International Trade and Economic Affairs of the Ministry said that the new deal on trade in service will lay a more solid foundation for the two countries' cooperation on dealing with the global financial crisis, promoting the economic common development, and furthering the all-weather friendship.

China is building 14 free trade zones with 31 countries and regions around the world. Seven free trade zone agreements have been implemented.

"China will push forward the construction of free trade zones more actively while continuing our participation into the WTO Doha Round talks," said the official.

By People's Daily Online

China-Pakistan free trade agreement on services to be in effect soon - People's Daily Online


This will certainly help Pakistan's economy.
Long Live China Pakistan Friendship

 

[metalfalcon]

Pakistan Needs Such Co-operation From Friendly Countries to help Boost her Economy and which country is more friendly to Pakistan Than China.

 

[Samlee]

we have never really taken advantage of the free trade agreement with china.The Whole World is Running After the Gigantic Chinese marketand we Who Have Access to it are not taking advantage of it.The Chinese Place Various restrictions and have a notorious record of IP rights.We have very liberal FDI Laws and are much better than Chinese as far as IP is Concerned.We Should Convince Western Businesses to Come and Invest in Pakistan to Take advantage of Liberal Investment environment as well as free market access to China as a Result of FTA

 

[Brotherhood]

Plan to seek big share in $1tr Chinese market | Newspaper | DAWN.COM

KARACHI, Jan 4: The Trade Development Authority of Pakistan (TDAP) has chalked out an extensive plan to increase its rightful share in China’s $1 trillion import market.

The authority has identified several areas where Pakistan could take advantage by enhancing bilateral trade based on interactive contacts through web portal, trade fairs and exchange of delegations.

The entire export strategy developed by the TDAP is based on traditional items such as textiles and made-ups, leather, marine products, minerals, marbles, granite, chemicals and food items.

For capturing larger chunk in one of the world’s biggest markets the TDAP plans to work together with China to make the Free Trade Agreement (FTA) effective through dismantling non-tariff barriers.

The plan also suggests having workshops and seminars in both the countries for creating awareness amongst stakeholders about trade potential in Pakistan.

The TDAP has also drawn a roadmap for 2011 for achieving the goal and intends to participate in 15 international exhibitions in China representing different sectors.

TDAP secretary Jawed Anwar Khan told Dawn that the year 2011 will be carrying a long list of activities and engagements with business community of China.

During a recent visit of a large Chinese delegation led by Premier Wen Jiabao opened up new avenues for Pakistani products and the TDAP would like to capitalise upon them.

There are plans to send at least eight trade delegations to China this year, he said, and added that TDAP will also invite businessmen from China to visit Pakistan Expo, 2011 and other Chinese buying missions.

Extensive marketing and selling network based on local and multinational Chinese marketing companies will be undertaken by the TDAP to develop supply chain for goods which are China specific.

Jawed Anwar said that in collaboration with Chinese the TDAP will set up export related skills development institutes to ensure quality production that could meet world standards.

The TDAP has also plans to build upon existing stocks of Chinese investments, which in excess of $15 billion in Pakistani infrastructure and natural resources.He said Pakistan has to go a long way for developing supply side of different industrial and agriculture products and this could not be done without introducing technology and modern techniques.

Chinese assistance will be sought for developing supply side of those products where Pakistan has an advantage and only then country’s exports could be enhanced, he maintained.

Meanwhile, the TDAP chief executive Tariq Iqbal Puri on Tuesday said the authority was awaiting release of Rs7 billion from the Export Development Surcharge (EDS) fund held up by the finance ministry to carry out various export projects.

At a meeting with the members of the Korangi Association of Trade and Industry (Kati) he said that many export-oriented projects were in the pipeline and would be completed after receiving funds from the ministry.

He, however, expressed the hope that the exports would cross $20 billion this fiscal year. He said the TDAP was planning to take part in as many as 80 international exhibitions out of which 25 expos would be held in China.

He announced that the TDAP board of directors would soon be reconstituted and prominent figures from the private sector would be inducted, according to a Kati press release.

The TDAP chief said it was being considered to split the Expo Pakistan into 5 to 7 sectoral exhibitions this year and proposals were being invited from trade bodies in this regard.

Kati patron-in-chief S M Muneer asked the TDAP to release millions of rupees of exporters stuck
up with the TDAP against subsidies.

Kati Chairman Syed Johar Ali Qandhari asked the TDAP to declare year 2011 as “Export Year” and devise a comprehensive plan with the trade bodies to boost exports.

 

[Hyde]

well still waiting for an update for $35 billion dollars deals

 

[@nline]

Pak-China friendship Long Live.

 

[EjazR]

FTA benefiting China more than Pakistan

ISLAMABAD: Imports from China have been persistently rising even in the no concession category whereas Pakistan has been able to increase its exports only in the first two categories, reveals a study on Pakistan-China FTA available with The News.

In the remaining three categories, Pakistan is either losing its export share or has not been able to significantly increase it, says the study.

The study says that the reason for the inability of Pakistan to increase its exports significantly in all concession categories is the more favourable tariff concessions granted by China to its other trading partners, due to which Pakistani exports become uncompetitive.

The marginal tariff concessions provided by Chinese authorities would not help Pakistan make inroads in the Chinese market unless tariff concessions granted to Pakistani exporters place them at par with other countries with which China has preferential trading arrangements, the study adds.

Pakistan Institute of Trade and Development (PITAD) conducted the study, ‘Evaluation of Pakistan-China FTA’. It provides recommendations for trade negotiations in the Phase-II.

The effect of rapidly increasing imports from China on the domestic industry of Pakistan was also analysed by conducting a survey of stakeholders.

The results of the study highlight that products in which Pakistan’s exports to China increased in the post-FTA period include cotton products of chapter 52, chromium ores and concentrates of chapter 26, fish prepared or preserved and fish fillet of chapter 16, copper wire of chapter 74, frozen flat fish of chapter 03, waste, parings and scrap of plastics of chapter 39 and marble and travertine of chapter 25.

This product composition reveals the lack of export diversification and concentration in raw material and intermediate product exports to China even in the post-FTA period.

There has been little shift in the comparative advantage pattern of Pakistan’s export products in the Chinese market, says the study.

Imports from China were valued at around $1 billion in 2003, which rose to around $3.7 billion in 2009.

The products which registered the highest import value in the post-FTA period include telephone sets, including telephones for cellular networks or for other wireless networks, cellular mobile phone of chapter 85, telephone sets, including telephones for cellular networks’ other apparatus of chapter 85, electric generating sets and rotary converters of chapter 85, electric and electronic products of chapter 85, synthetic filament yarn of chapter 54, polyesters not exceeding 2.22 decitex of chapter 55, light-vessels, fire-floats, dredgers, floating cranes of chapter 89, other pneum tyre rubber for bus of chapter 40, other pneum tyre rubber for bus ingredients for pesticides of chapter 29, onions, shallots, garlic, leeks & alliaceous vegetables, of chapter 07, machines and mechanical appliances, ginger of chapter 09, and antibiotics of chapter 29, it added.

Pakistan is a developing country and tariff is one of the major sources of revenue. The revenue loss incurred to Pakistan due to exemptions offered to Chinese products was to the tune of Rs139 million in 2006-07 during EHP period, which increased to a staggering figure of Rs6.1 billion in 2009-10.

The study reveals that Pakistan-China FTA is the most utilised FTA of all such agreements Pakistan has signed.

China’s specific provision of low tariffs and other exemptions to the ASEAN and APTA countries has to some extent eroded the FTA preferences of Pakistani exporters in the Chinese market.

Our exporters mainly face competition from India (APTA member), Bangladesh (APTA) and Egypt in the Chinese market.

At product level, Pakistani grey fabric producer faces higher competition from India, Bangladesh and Egypt.

Pakistan cotton yarn and fish exports also reported tough competition from Bangladesh and India.

Exporters of knitwear, leather, surgical instruments, pure oxygen, football and chemical industry reported India as major competitor in Chinese market, while exporter of tyre manufacturers report competition from Sri Lanka.

There is considerable evidence of trade diversion as Pakistani importers have shifted their imports from other countries like Germany towards China.

Similarly, trade creation effect is also observed as importers reported low per unit price as the major reason for import from China, says the study.

 

[kawaraj]

what's your business here?

hell, even without FTA with your country, how much India earn from Pakistan through trade?

this is we need to end the war, restructure our economy, ... and we beat you in trade.

 

[Zeeshan360]

what's your business here?

hell, even without FTA with your country, how much India earn from Pakistan through trade?

this is we need to end the war, restructure our economy, ... and we beat you in trade.

Very optimistic guy .

 

[Rafi]

Why would our trade relationship with the PRC, concern indians of all people.