ISLAMABAD, Feb 24: Pakistan and China will constitute study groups to consider items up to 8 digits HS Code for duty reduction to increase bilateral trade volume. A senior official told Dawn on Friday that the constitution of study groups was part of the MoU inked recently during the President Pervez Musharraf’s visit to China.

Under the MoU, Pakistan and China would jointly launch a five-year programme for promoting bilateral trade and economic cooperation.

The official said that the study groups would identify items for consideration of duty reduction under the free trade agreement (FTA) to be concluded shortly.

Pakistan will get more market access for its potential products in a bid to reduce its trade deficit with China. The balance of trade was highly in favour of Chinese government following the signing of preferential trade agreement (PTA) effective from January 1, 2004.

Official statistics showed the total trade volume stood at $2.196bn during 2004-05 as against $1.441bn in 2003-04, indicating an increase of 52.39pc.

When contacted Commerce Minister Humayun Akhtar Khan told Dawn the study groups would study the complementarities of the trade of the two economies. “We would get more market access for our products to narrow the trade deficit with China,” the minister added.

The minister said that Chinese government was pursuing its private sector to invest in various sector in Pakistan. He said that it was clear from the fact that around 500 Chinese companies participated in the Pakistan’s investment forum held in China.

He said that the Chinese government had agreed to motivate its private sector promoting economic ties with Pakistan. “Chinese market has been made open to our exporters and many of our products can now be exported to China on zero duty,” he added.