Phase two of the much-touted China-Pakistan Free Trade Agreement came into effect as of Wednesday. The new phase will allow Pakistani manufacturers and traders to export around 313 new products to the Chinese market with zero duties, Secretary Ministry of Commerce Ahmad Nawaz Sukhera said in a tweet.
The implementation of the agreement’s second phase, he added, would make 90% of China’s global imports duty-free for Pakistan. Confident that it will help our exports increase substantially, he added. Beijing earlier approved premature activation of the second phase of the pact with Pakistan, signed during Prime Minister Imran Khan’s visit to China last April.
Pakistan is already enjoying zero duties on exports of 724 products to China under the first free trade pact signed between the two countries in 2006. After implementation of the second pact, Pakistan has been allowed to export more than 1,000 products to China with zero duties. The new facility will particularly benefit the agriculture, leather, confectionary items, and biscuits product sectors as well. Last year, Pakistan signed an agreement with China to use Chinese currency for bilateral trade to get rid of the dollar burden in $15 billion bilateral trade.
According to official data, Pakistan and China’s bilateral trade volume grew to reach some $15.6 billion in the 2019 fiscal year, up from $2.2 billion in 2005. The two longtime allies are also partners in the multi-million-dollar China-Pakistan Economic Corridor (CPEC), part of China’s Belt and Road Initiative, an ambitious project to connect Asia with Africa and Europe via land and maritime networks to boost trade and stimulate economic growth.
The $64 billion mega-project signed in 2014 aims to connect China’s strategically important northwestern Xinjiang province to the Gwadar port in southern Pakistan through a network of roads, railways, and pipelines to transport cargo, oil, and gas. The economic corridor will not only provide China with cheaper access to Africa and Middle East but will also earn Pakistan billions of dollars for providing transit facilities to the world’s second-largest economy.