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Islamic Republic of
Peoples republic of
Pakistan
China
Free Trade Agreement
Chinese President Hu Jintao and his Pakistani counterpart Pervez
Musharraf Friday oversaw the signing of a free trade agreement
between the two allies here in Islamabad on 24th November, 2006. The
document was signed by the Commerce Ministers of both the countries.
The architecture of the bilateral Free Trade Agreement includes
Trade in Goods and Investments in the first Phase and the leaders of
both the countries have decided to negotiate on Trade in Services
during 2007 to enlarge the coverage of the Free Trade Agreement.
The Early Harvest Programme between the two countries which was put
into operation on 1st January 2006, has been merged into this
bilateral FTA. In the overall package Pakistan will get market
access at zero duty on industrial alcohol, cotton fabrics, bed-linen
and other home textiles, marble and other tiles, leather articles,
sports goods, mangoes, citrus fruit and other fruits and vegetables;
iron and steel products and engineering goods. China will also
reduce its tariff by 50% on fish, dairy sectors; frozen orange
juice; plastic products; rubber products; leather products;
knitwear; woven garments etc.
Pakistan has given market access to China mainly on machinery;
organic; and inorganic chemicals, fruits & vegetables, medicaments
and other raw materials for various industries including engineering
sector, intermediary goods for engineering sectors, etc.
The Agreement
The Free Trade Agreement consists of the following components:
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The Agreement, and
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Annexes I, II and III
The agreement contains the Articles on Establishment of
Free Trade Area, objectives, relation to other
agreements, application of this agreement,
definitions, scope and coverage, National treatment,
tariff elimination, para-tariffs and non-tariff
barriers, rules of origin, Trade remedies, safeguard
measures, sanitary and phyto-sanitary measures, TBTs,
Investment, settlement of disputes, amendments,
annexes etc.
Annexes
Annex
'I' relates to the Elimination of import customs duties. It has
two phases:
Phase-I -- Tariff Reduction Modality of China within five
years after entry into force of this agreement:
Phase-I -- Tariff Reduction Modality of Pakistan within
five years after entry into force of this agreement:
Note: elimination of
tariff on the products covered in the Early Harvest Program (EHP)
shall continue in accordance with the earlier agreed modality of
tariff elimination for EHP.
Phase-II --
Both Parties
shall endeavor to eliminate the tariffs of no less than 90% of
products, both in terms of tariff lines and trade volume within
a reasonable period of time on the basis of friendly
consultation and accommodation of the concerns of both Parties.
Note: The base year
for tariff reduction/elimination for China is 2006 and for
Pakistan fiscal year of 2006-2007.
Annex
'II' is the form and instruction for the Certificate of Origin.
A claim that products shall be accepted as eligible for
preferential concession shall be supported by a Certificate of
Origin issued by a government authority designated by the
exporting Party and notified to the other Party to the Agreement
in accordance with the operational certification procedures, as
set out in this annex.
(Chapter IV,
Article 23 of the Agreement)
Annex
'III' is for the purposes of this Agreement and Chapter X
(Dispute Settlement).
It covers Rules of Procedure of an Arbitral Panel established
pursuant to Article 63.
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