labels: trade
China, Pakistan to cut tariffs under FTAnews
29 June 2007

Mumbai: China and Pakistan will reduce tariffs on each other''s imports beginning 1 July, in line with their free trade agreement (FTA), a senior Chinese trade official said.

The two countries will carry out tariff reduction in two phases. In the first five years, the two sides will cut tariffs on up to 85 per cent of imports in five categories. In the following five years, China will eliminate or cut tariffs on Pakistan-origin products, ranging from farm goods to textiles and electronic goods, while Pakistan will remove or cut tariffs on Chinese food, electronics and machinery, commerce ministry spokesman Wang Xinpei said.

China''s average tariff on imports from Pakistan post reduction will be lower at eight per cent, 0.67 percentage points below the MFN rate.

The two countries will review the implementation of the first phase in a bid to finalise the timetable for tariff reduction in the FTA''s second phase, which was described as an "open agreement".

"We aim to adopt zero tariffs on up to 90 per cent of imports, in terms of categories and trade volume, from each other in a short period," the China Daily quoted a commerce ministry official as saying.

The FTA, signed last November, is China''s third, following FTAs with Chile and the ASEAN.

Chinese enterprises will largely benefit from the FTA as market access increase and trade and investment environment improve, the official said.

The agreement provides opportunities for Chinese companies to invest in Pakistan, he added.

In the ongoing talks on services, the two sides are discussing how to reduce trade barriers in the service sector," he added. "We hope enterprises will keep an eye on the talks to make full use of the agreement."

China will lower import taxes on 3,975 categories of goods from Pakistan, by 11 per cent to an average tax rate of 8 per cent, also effective July 1.

China will also exempt imports from 26 ''under developed'' African countries from tariffs in an attempt to promote mutual trade, its finance ministry said.

The regulation, approved by the state council, or the cabinet, will exempt 256 items China imported from the 26 countries effective on July 1. The move would "further enlarge China''s imports from African countries, and promote the better development of mutual trade," the ministry said.

It did not name the 26 countries or the items. China similarly lowered tariffs on a broad range of imports from 29 African countries effective January 1, 2005. China is broadening trade ties with Africa, an important source of minerals, crude oil, cotton and other natural resources, and has offered its African allies a variety of investments and financial packages.

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China, Pakistan to cut tariffs under FTA