BEIJING, Dec 7: Pakistan and China started a second round of negotiations on tree trade agreement here on Wednesday, with a pledge to make it an effective document giving boost to their bilateral trade and establishing a mutually beneficial cooperative partnership.

Pakistan’s side was being represented in the meeting by a six-member delegation led by Shahid Bashir, a senior official of the ministry of commerce. The second round is likely to continue till Friday.

Sources told APP that the two sides would discuss modalities and their respective proposals regarding the free trade agreement. They will also finalize the rules of origin essential for initiating the early harvest programme (EHP) that was concluded and signed following the talks held in Islamabad in April this year between Prime Minister Shaukat Aziz and his Chinese counterpart Wen Jiabao.

The sources said negotiations on the FTA reflected a strong desire of the two traditional allies to bring trade volume to the level of their existing excellent diplomatic ties. The negotiation process is expected to be completed by the end of next year.

According to the understanding, Beijing and Islamabad would initiate trade under the EHP from January 1, 2006 that would provide a major reduction in tariffs on certain items already identified by the two sides.

The EHP between Pakistan and China consists of two lists of items (common list and separate list) for bringing customs duty to zero on certain items, even prior to the conclusion of FTA talks.

It will also cover the items on which the two countries are already giving tariff concession under the preferential tariff agreement (PTA).

According to the proposed plan, the present duty of over 15 per cent would 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, 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 by the both sides latest by January 1, 2006.

Under the agreement, China would reduce customs duty to zero 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, etc., surgical goods, sports goods and cutlery etc., certain dyes, guar gum, medicines, leather articles, leather garments, curtains, iron windows and doors.

Pakistan will reduce duty to zero on some organic chemicals, leather and textile machinery, parts, industrial washing machines, dying machines and machinery for pressing and grinding.

The first round of talks on FTA was held in August this year in Urumqi, the capital of China’s Xinjiang region.—APP