China-Pakistan Free Trade Agreement Phase II Enters Review Stage

China-Pakistan Free Trade Agreement (CPFTA) Phase II enters review stage in 2024, aiming to increase Pakistan's exports to China through expanded product coverage and tariff concessions. The agreement seeks to boost Pakistani exports to the Chinese market and strengthen trade ties between the two countries.

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China-Pakistan Free Trade Agreement Phase II Enters Review Stage

China-Pakistan Free Trade Agreement Phase II Enters Review Stage

The China-Pakistan Free Trade Agreement (CPFTA) Phase II has entered the review stage in 2024, aiming to increase Pakistan's exports to China through expanded product coverage and tariff concessions. The goal is to make the trade arrangement more conducive and favorable for Pakistan.

Why this matters: This development has significant implications for the global trade landscape, as it strengthens the economic ties between two major nations and could influence trade dynamics in the region. Furthermore, the increasedexports from Pakistan to China could have a positive impact on Pakistan's economy and contribute to its growth and development.

Pakistan's exports to China have grown significantly since the initial Free Trade Agreement (FTA) was signed in 2006. Exports were valued at $0.5 billion in 2006 and increased to $1.6 billion in 2016 after the FTA's inception. Following the implementation of CPFTA Phase I and Phase II, exports reached $2.53 billion in 2022. According to the China General Administration of Customs, Pakistani exports to China further climbed to $3.452 billion in 2023.

The initial FTA between China and Pakistan was signed on November 24, 2006, and concluded in December 2012. CPFTA Phase I was then signed on April 28, 2019, and came into force on January 1, 2020. The current CPFTA Phase II is scheduled to conclude in 2024.

Under the initial phase, China and Pakistan abolished tariffs on 35.5% of product lines. With CPFTA Phase II, product coverage from both sides has expanded to 75%. China has eliminated tariffs on 313 product lines, with Pakistan being a major exporter to China in various goods, including textiles, cotton, frozen meat and other animal products, seafood, prepared food, chemicals, carpets, marble, plastics, oilseeds, chili, footwear, engineering goods, machinery, leather, and auto parts.

The review stage of CPFTA Phase II aims to further enhance Pakistan's export footprint in China, making the trade arrangement more favorable for Pakistan. By expanding product coverage and offering tariff concessions, the agreement seeks to boost Pakistani exports to the Chinese market and strengthen trade ties between the two countries.

Key Takeaways

  • CPFTA Phase II aims to increase Pakistan's exports to China through expanded product coverage and tariff concessions.
  • Pakistan's exports to China grew from $0.5 billion in 2006 to $3.452 billion in 2023.
  • CPFTA Phase II expands product coverage to 75%, with China eliminating tariffs on 313 product lines.
  • Pakistan is a major exporter to China in goods like textiles, cotton, and engineering goods.
  • The review stage of CPFTA Phase II seeks to make the trade arrangement more favorable for Pakistan.