Pakistan-China accords Zero duty on 1,253 tariff lines by Jan 2008
By Our Reporter
ISLAMABAD, April 6: Pakistan and China have agreed to scale down customs duty to zero per cent on 1,253 tariff lines latest by January 1, 2008 under the Early Harvest Programme (EHP) agreement to increase the volume of bilateral trade. Commerce Minister Humayun Akhtar Khan told a press conference here on Wednesday that the EHP — a list of items for bringing customs duty to zero prior to negotiations and conclusion of a free trade agreement (FTA) — was signed by the prime ministers of Pakistan and China on Tuesday, which would be effective from January 1, 2006.
Pakistan will reduce the duty to zero per cent on 486 tariff lines latest by January 1, 2008 while China will bring down the duty to zero per cent on 767 tariff lines under the EHP during the same period.
Mr Khan said the agreement included two main lists — a common list of items on which both the sides will bring the tariffs to zero and a separate list by each country consisting of items of respective export interests on which duties will be reduced to zero.
Official documents made available to Dawn showed that under the agreement, both the sides also agreed on a schedule to reduce the customs duty on the agreed items. The duty on items more than 15 per cent will be reduced to 10 per cent by January 1, 2006; then to five per cent by January 2007 on the same items and finally to zero per cent latest by January 1, 2008.
Similarly, the duty on items in the range of 5-15 per cent will be reduced to five per cent latest by January 1, 2006 and finally to zero per cent by January 1, 2007. The items having below five per cent customs duty would be scaled down to zero per cent latest by January 1, 2006.
Most of the Chinese items were in the range of five to 15 per cent, which will be subjected to zero per cent duty by January 1, 2007. This will result in surge in Pakistan’s export to China.
Under the common list, duties to be brought to zero on the following items: vegetables — lettuce, peas, beans, garlic, etc; fruits — orange, mango, kinnoo, dates, fig, guava, etc.
Under the agreement, China will bring down the customs duty to zero per cent on industrial alcohol, bedlinen, table linen and other home textiles, towels, cotton and blended fabrics, synthetic yarn, synthetic fabrics, tarpaulin and marble articles like tiles, surgical goods, sports goods, cutlery, etc., certain dyes, guar gum, medicines, leather articles, leather garments, curtains, iron windows and doors.
Pakistan will reduce the duty to zero on some organic chemicals, leather machinery, textile machinery, parts, industrial washing machines, dying machines, and machinery for pressing and grinding.
In reply to a question, the commerce minister said the EHP would help Pakistan increase its export to China and added that the FTA between the two countries would be concluded within a period of one year.
Mr Khan said that the existing PTA, on which China and Pakistan had reduced tariffs on margin of preference i.e. a percentage of the normal tariff, had also been extended.
“This list now consisted of 1,671 items on the Chinese side and 575 items in the list of Pakistan and this extended list will also be made part of the EHP.”
The bilateral PTA will merge into the FTA from Jan 1, 2006. The concessions on the existing PTA (186 items by Pakistan and 917 items by China) will remain in operation till then, he added.
