BEIJING, Aug 5: Pakistan and China have finalized two separate lists of 52 items on which duty will be reduced to zero by each side from January 1, 2006. An agreement to this effect was arrived at a meeting held here between the officials of the Export Promotion Bureau and the Chinese ministry of commerce.

EPB Vice-Chairman Zafar Mahmood, who led the Pakistan’s side at the meeting, told APP on Friday that a duty-free structure had been worked out under the Early Harvesting Programme (EHP), which was a part of the free trade agreement (FTA).

It would be implemented in three phases. The first reduction would take place on January 1, 2006, and by January 1, 2008 tariff will be brought to zero on a number of other items already indicated by the two sides.

The duty-free items have been decided on reciprocal basis in order to facilitate each other, strengthening economic partnership. The 52 items that Pakistani would export to China duty-free include bedlinen, table linen and other home textiles, terry towels, blended fabrics, synthetic yarn, synthetic fabrics, mango, orange, dates, tarpaulin and marble articles like tiles, etc., surgical goods, sports goods, cutlery, certain dyes, guar gum and medicines.

The list of items that would be exported to Pakistan from China duty-free includes industrial machinery and chemical raw material. Mr Mahmood termed the duty-free arrangement a big advancement in their bilateral trade. “The existing trade volume does not match their existing tremendous goodwill and excellent diplomatic ties,” he remarked.

About reduction in import duty on Chinese machinery and raw material, he said it would reduce the cost of industrial machinery and generate further business activities in the country.

During Prime Minister Shaukat Aziz’s visit to China in December 2004, it was decided that a joint study group would be established to study the feasibility of Pakistan-China FTA. “Although it was originally thought that it would take six months to complete the study, which was a very short time for such studies, the joint study, however, was concluded in only three months.

Pakistan has an operational PTA with China since January 2004 under which China has given tariff concessions on 893 items and Pakistan has given similar concessions on 188 items.

And now under the EHP, the two countries will expand the concession on more items, gradually bringing the excise duty to zero by 2008.—APP