Islamic Republic of              Peoples republic of
Pakistan                     China

Free Trade Agreement

The Agreement on Trade in Services was signed in Wuhan, China on the occasion of the visit of President of Pakistan to China on 21^st February 2009. After signing of this Agreement Pakistan has a comprehensive Free Trade Agreement with China covering Trade in Goods, Investments and Trade in Services. Negotiations on “Trade in Goods” and “Investment” were concluded and the Agreement was signed on November 24, 2006 during the visit of H.E HU. Jintao, President of China to Islamabad. It was enforced from 1-7-2007. In accordance with Article 83 of the bilateral FTA, negotiations on an “Agreement on Trade in Services” were initiated. The Agreement was concluded after five Rounds of negotiations with China on 3rd December 2008. The following objectives were kept in view while negotiating the Agreement with China:

·        To integrate respective economies of Pakistan and China for mutual benefits. ·        To provide a predictable investment regime in the Services sector especially in Infrastructure, Computer & related Services, Educational Services, Research & Development, Tourism, Sporting Services and Environmental Services like sewage and cleaning services. ·        To promote joint ventures to build the capacity of domestic service suppliers, transfer of technology and creation of new jobs in Pakistan.

The Secretary Commerce of Pakistan Mr. Suleman Ghani and Mr. Wang Chao Assistant Minister of Ministry of Commerce, China exchanged the diplomatic note in Beijing to operationalise the Agreement from 10^th October 2009.Pakistan has provided market access to China in 11 sectors. Out of a total possible 160 sub-sectors, Pakistan has committed market access to China in 107 sub-sectors. China has provided market access to Pakistan in 11 sectors and 133 sub sectors. China’s offer is WTO plus and provides more market access to Pakistan in Trade in Services committed to any other country. China has allowed Pakistani investors to completely own their projects in China in many sectors like Distribution Services, Commission Agent Services, Wholesale and Retail Services, Computer and related Services etc.

Trade in Services also complements Trade in Goods, as manufacturers and producers of goods need quality services at competitive rates (like finance, insurance, transport, communication, engineering, retail and wholesale) to be internationally competitive. Services are therefore an integral part of the cost of each unit of goods produced. Alongwith Pakistan’s operational FTA in Goods and Investment with China, this Agreement on Trade in Services will help our service suppliers as well as the manufacturing sector to maximize its export potential in the Chinese as well as in global markets.