KARACHI: Pakistan and China will revise the Free Trade Agreement (FTA) by the mid of next month. The news is in addition to the billions of dollars agreements signed between the two countries during the recent visit of Chinese Prime Minister Wen Jiabao to Islamabad. The FTA, which was signed in November 2006, would be revised with required changes in January 2011, sources told Pakistan Today on Monday.
Islamabad, according to source, has stressed the Chinese delegation to bring some amendments in the agreement which, under the present form, favoured Beijing.
Later, it was decided that ‘Sino-Pak FTA’ issue would be discussed in the bilateral talks/meeting scheduled to be held next month in Islamabad. Pakistani exporters expressed serious reservations over the swelling bilateral trade deficit which, despite the agreement, had crossed $3.0 billion last year in Beijing’s favour, sources said.
China was holding a massive $3.256 billion trade surplus with Pakistan, which was also rising after the signing of the agreement in 2006. According to the Federal Bureau of Statistics the bilateral trade had boosted to $5.563 billion in 2009-10. Beside the FTA, the agreement on services, signed last year, was also providing greater market access to Chinese service providers on a preferential basis.
In the proposed amendment in FTA, the concerned authorities in Islamabad would request their counterparts in China to include further textile items in the agreement to create the balance of trade under the free trade deal.
According to sources, FTA would increase Islamabad’s exports to Beijing, the country’s export to China, with the four percent annual growth was no more than $1.0 billion in 2009-10, while the imports from the neighboring country grew by an average 12 per cent to $4.41 billion.
Many raw materials, which china imports from other ASEAN countries under China-ASEAN FTA, could be imported from Islamabad while including more products in the agreement, in the importable list of China from Pakistan. It is worth mentioning here that in April 2005, China and Pakistan announced the launch of the negotiations on free trade area during Premier Wen Jiabao’s visit to Pakistan. The two countries reached the FTA in November 2006. The Agreement took effect in July 2007. On February 21, 2009, Chinese State Councilor Dai Bingguo and Pakistani President Asif Ali Zardari witnessed the signing of the Agreement on Trade in Service of the China-Pakistan FTA which would enter into force since October, 10, 2009. Under the agreement, Pakistan was importing high-tech products, chemicals, plastics products and household appliances from China while it was exporting textiles, leather and aquatic products.
