Pakistan, China trade volume jumps to $15.6b under FTA

ISLAMABAD: China, Pakistan Free Trade Agreement (CPFTA) appeared to be a milestone in the two countries' bilateral economic cooperation, as their bilateral trade has jumped to dollar 15. 6 billion in the recent years,

China Economic Net, quoting official sources reported on Friday that within the first phase of CPFTA, Pakistan’s exports to China have increased to US$1.85 billion (FY19) from US$575 million (FY07), and the bilateral trade volume has jumped from around US$4 billion to US$15.6 billion accordingly.

The CPFTA was signed in 2006 and came into effect in 2007. It is the first FTA China signed with South Asian countries.

The signing and implementation of the CPFTA has led to the rapid development of bilateral economic and trade relations. According to the statistics of Pakistani customs, so far, China has been Pakistan’s largest trade partner and the second export destination country for 5 consecutive years, and topping the FDI original country for 6 consecutive years.

Along with the constant upward trend of China-Pakistan trade, a rising concern on trade deficit with China has been echoing in the Pakistani business communities. It is pertinent to mention that the main reason behind the trade imbalance has to be the structural problems in nature between industries of two countries.

China has a strong manufacturing base to export goods as compared to import. Up to now, China turns to be the largest trading partner of more than 120 countries and regions in the world, and China has never intentionally pursued the trade surplus, not with any trade partner.

To address the major concern of Pakistani side, China has proactively taken a lot of measures to maintain a balanced trade relation with Pakistan. According minister counselor, Economic and Commercial Section, Chinese Embassy in Pakistan, in cooperation with Pakistani counterpart, China is keen to expand more market access for Pakistani products and organizes varieties of trade promotion activities in Pakistan and China every year.

In the meanwhile, in pursuit of a higher level of trade liberalization, the second phase of negotiations of CPFTA was launched in 2011, and successfully concluded after 11 rounds of talks.

Witnessed by the two countries’ leaders this April, the protocol of the CPFTA Phase II was signed at the second Belt and Road Forum for International Cooperation held in Beijing and will take effect in due course.

The second phase of CPFTA is a substantial upgrade of the original one and is expected to be a milestone in the history of the two countries’ economic and trade development. The two sides will, based on the original FTA, significantly reduce the tariff between the two countries and further expand the liberalization of trade in goods. After the Protocol takes effect, the level of bilateral trade liberalization will increase from the previous 35% to 75% in terms of tariff lines elimination.