China Briefing is written and produced by Dezan Shira & Associates. The practice supports foreign investors in China and has had offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen and Hong Kong since 1992. Please contact the support company in China at china@dezshira.com. [1] All tariff data relating to the CPFTA Phase II have been consulted on the website of the Ministry of Commerce under www.commerce.gov.pk/protocol-on-phase-ii-china-pakistan-fta. All trade data, unless otherwise stated, will be viewed by ITC TradeMap, which will be correct from August 2019. Table 1 Pakistan`s trade according to CPFTA1, 2007-2018, in billions of dollars These are Pakistani products for which there is a well-established market in China and non-tariff barriers have also been successfully circumvented. There are 401 products in this category in 8-digit CPFTA2, for which Pakistan exported $1.6 billion to China, compared to $148.4 billion in Chinese global imports. Pakistan exports $13.8 billion of these products globally, indicating that it has the export capacity to expand exports to China. By last year of CPFTA2, 83 per cent of Priority 1 product lines will have duty-free access to China and 93 per cent of product lines will face tariffs of less than 10 per cent. Compared to CPFTA1, 44% of product lines now face a lower price under CPFTA2. Relative to the value of these product lines, nearly $11.5 billion in exports now have duty-free access.
The main exceptions are the categories of rice to which Pakistan remains subject to tariffs of 65%. Pakistan already enjoys zero tariffs on the export of 724 products to China under the first free trade agreement signed between the two countries in 2006. After the implementation of the Second Pact, Pakistan was allowed to export more than 1,000 products to China duty-free. Awan added that it is the country`s textile sector that will benefit the most under the agreement. The second phase of the China Free Trade Agreement (CPFTA) for 2019-2024 was completed in early 2019 between the two countries and entered the implementation phase from January 1, 2020. The well-negotiated CPFTA2 is expected to significantly improve Pakistani exporters` access to China`s $2 trillion import market, helping to address the country`s exploding trade deficit. To understand how CPFTA2 can help Pakistani exporters achieve this goal, the Pakistan Business Council (PBC) commissioned the Consortium for Development Policy Research (CDPR) to conduct a preliminary assessment of China`s customs regulations in CPFTA2. The assessment begins with the establishment of a comprehensive data set of all 8,238 tariff lines at the HS-8 digit level that China has included in CPFTA2, which brings together three types of data for each tariff line: the tariffs proposed under CPFTA1 and Phase 2 (for years 0, 5 and 10), the volume trade data for China and Pakistan, and growth rates for Pakistan, China and China are the main trading partners and, thirdly, customs data for all countries exporting to China by product. This dataset is used to compare China`s proposed tariffs on Pakistani products under CPFTA2 and CPFTA1 to determine whether access to the Chinese market has improved, as well as tariffs offered to other countries that export these products to China. While the tariff concessions that Pakistan offers to Chinese products are a second important aspect of the free trade agreement, they do not fall within the scope of this report.
. . .