Phase I – Tariff Reduction Modality of China within five years of the entry into force of this Agreement: The new phase will allow Pakistani manufacturers and distributors to export approximately 313 new products to the Chinese market duty-free. Chinese President Hu Jintao and his Pakistani counterpart Pervez Musharraf on Friday oversaw the signing of a free trade agreement between the two allies here in Islamabad on November 24, 2006. The document was signed by the trade ministers of both countries. In particular, the Protocol introduces a new timetable for the elimination of customs duties in order to expand reciprocal market access, amends the rules of origin and trade aid provisions and adds a new chapter on customs cooperation. Finally, the protective measures have been revised under the CPFTA in order to strengthen the protection of the domestic industry. Pakistan already enjoys zero tariffs on the export of 724 products to China under the first free trade agreement signed between the two countries in 2006. After the implementation of the Second Pact, Pakistan was allowed to export more than 1,000 products to China duty-free. According to official figures, Pakistan`s bilateral trade volume increased to about $15.6 billion in FY2019, up from $2.2 billion in 2005. In addition, both sides will introduce a partial 20% reduction in tax on other products that make up 5% of taxable items on the other country`s customs schedules. In the 2017-2018 fiscal year, the volume of trade between China and Pakistan amounted to $13.2 billion, or 16.4% of Pakistan`s trade volume. These concessions bring many benefits both to China and to Pakistan`s trade development; It provides China with access to important agricultural, textile and mechanical goods to meet the needs of its growing middle class and enables Pakistan to improve its export competitiveness and improve industrial production. A second phase agreement is being negotiated between China and Pakistan.
The second phase will further reduce tariffs and standardize various trade procedures.  [to be updated] China Briefing is written and produced by Dezan Shira & Associates. The practice supports foreign investors in China and has had offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen and Hong Kong since 1992. Please contact the support company in China at firstname.lastname@example.org. The protocol provides that the share of tariff lines of non-tariff products between China and Pakistan will gradually increase from 35% to 75% over a period of 10 years, as China has done and 15 years by Pakistan. Awan added that it is the country`s textile sector that will benefit the most under the agreement. “I congratulate China on the implementation of the second phase of the free trade agreement, which will improve bilateral trade and facilitate the export of its products to the Chinese market without customs for Pakistani traders,” Firdous Ashiq Awan, special assistant to the prime minister of information and radio, said on Twitter. For example, under the 180-day protection measure added by the Protocol, domestic producers can now access safeguard measures to suspend reduced duties, without having to prove first the injury caused by imported products. “Together, Pakistan and China are entering the next phase of CPEC, with a greater focus on socio-economic recovery, poverty alleviation, agricultural cooperation and industrial development,” Khan said during his visit to Beijing. .