China drops tariffs on Pakistani products as FTA-II starts
The second phase of the China-Pakistan Free Trade Agreement
(CPFTA) became fully operational from January 1. The free
trade agreement will eliminate tariffs on hundreds of
products, a move which is expected to provide a
billion-dollar boost to bilateral trade. It will waive or
ease 75 per cent of tariffs imposed by each country over a
period of 15 years.
Beijing immediately dropped tariffs on more than 300
Pakistani exports, including textiles and garments, seafood
and leather. In exchange, Islamabad has offered greater
market access to Chinese raw materials and heavy machinery,
according to Pakistani media reports.
The deal, signed in April 2019 after ten rounds of parleys,
will reportedly raise Pakistani exports to China by between
$500 million and $600 million in the short-term. The figure
is expected to rise to $4 billion over the next five years.