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The person in charge of the International Department of the Ministry of Commerce introduced the second phase protocol of the China-Pakistan Free Trade Agreement

On April 28, President Xi Jinping met with Pakistani Prime Minister Imran Khan in Beijing, and Premier Li Keqiang also met with Imran Khan on the same day. Witnessed by the prime ministers of the two countries, Yu Jianhua, Vice Minister of Commerce and Deputy Representative for International Trade Negotiations, and Pakistani Ambassador to China Masood Khalid signed the Protocol between the Government of the People's Republic of China and the Government of the Islamic Republic of Pakistan on Amending the Free Trade Agreement. The person in charge of the Department of International Economic and Trade Relations of the Ministry of Commerce introduced the relevant situation of the "Protocol.

　　Q: What is the significance of the signing of the Protocol?

Answer: The signing of the "Protocol" is the latest achievement in the implementation of the "promoting the construction of free trade zones and promoting the construction of an open world economy" proposed by the 19th National Congress of the Communist Party of China. It reflects China's active promotion of the formation of a new pattern of comprehensive opening up and its firm support for freedom. The attitude and willingness of trade and economic globalization.

At the same time, the signing of the Protocol is also an important measure for China and Pakistan to implement the consensus reached by the leaders of the two countries and to further enrich and enrich the all-weather strategic cooperative partnership between the two countries. It is a model for the construction of a free trade zone among developing countries and a vivid practice in promoting the construction of "Belt and Road Initiative" and building a community with a shared future for mankind. On the basis of mutual benefit and win-win results, the two countries have reached a higher level of free trade agreements in the fields of trade in goods, rules of origin, customs cooperation, investment and other fields, which has greatly improved the level of trade liberalization, which will play an important role in promoting trade and investment between the two countries, exploring and exploring new areas of cooperation, and effectively promoting greater development of bilateral economic and trade relations, Bring more benefits and benefits to enterprises and people of the two countries. The "Protocol" is a substantial upgrade of the original China-Pakistan Free Trade Agreement and is of milestone significance in the economic and trade development of the two countries.

　　Q: Please brief us on the overall situation of the China-Pakistan FTA.

A: the free trade agreement between the government of the People's Republic of China and the government of the Islamic Republic of Pakistan was signed in November 2006 and implemented in July 2007. It mainly covers the fields of trade in goods and investment. It is the first free trade agreement signed between China and South Asian countries. In order to further promote cooperation in the field of trade in services between the two countries, the two sides signed the Agreement on Trade in Services between the Government of the People's Republic of China and the Government of the Islamic Republic of Pakistan in February 2009, which came into effect in October 2009.

The signing and implementation of the China-Pakistan FTA has led to the rapid development of bilateral economic and trade relations. According to China's customs statistics, the bilateral trade volume between China and Pakistan reached 19.08 billion billion US dollars in 2018, 3.6 times that before the implementation of the 2006 agreement. China is currently Pakistan's largest trading partner, largest source of imports, third largest export market and largest source of investment. Pakistan is my second largest trading partner in South Asia.

　　Q: Please brief us on the background and process of the second phase of China-Pakistan FTA negotiations.

A: In March 2011, China and Pakistan launched the second phase of FTA negotiations. Eleven meetings were held. Especially since September 2017, the negotiation process has accelerated, and the two sides have continuously made important progress on issues such as market access for trade in goods, rules of origin, customs cooperation, and investment.

In November 2018, Pakistani Prime Minister Imran Khan paid his first official visit to China, and the two countries issued a joint statement, agreeing to complete the second phase of negotiations on the China-Pakistan Free Trade Agreement as soon as possible. Since then, the negotiation teams of the two sides have carried out intensive consultations and recently reached an agreement on all the topics of the second phase of negotiations and the contents of the protocol. On April 28, China and Pakistan formally signed the Protocol under the joint witness of the prime ministers of the two countries.

　　Q: What are the main elements of the Protocol?

Answer: The "Protocol" is about 400 pages and consists of a preface and six chapters. In addition to the upgrading and revision of the original FTA's market access for trade in goods and tariff concessions, rules of origin, trade remedies, investment, etc., a new chapter on customs cooperation has been added. Compared with the original free trade agreement, the core of the protocol is to greatly improve the level of liberalization of trade in goods between the two countries.

　　Q: What is the upgraded content of the Protocol's market access for trade in goods?

Answer: The upgrading of market access for trade in goods is the core content of the second phase of the China-Pakistan Free Trade Agreement negotiations and the "Protocol. On the basis of the original free trade agreement, the two sides will substantially reduce the tariff level between the two countries and further expand the liberalization of trade in goods between the two countries. After the agreement comes into effect, the proportion of tax items for zero tariff products between China and Pakistan will gradually increase from 35% to 75%, and the level of liberalization will more than double.

Among them, China will abolish tariffs on 45% of the tax items immediately after the entry into force of the agreement, and gradually abolish tariffs on 30% of the tax items within 5 years (15% of the tax items) and 10 years (15% of the tax items). Pakistan will also abolish tariffs on 45 per cent of the tax items immediately after the entry into force of the agreement, and gradually abolish tariffs on 30 per cent of the tax items within seven years (15 per cent of the tax items) and 15 years (15 per cent of the tax items), respectively.

In addition, the two sides will also implement a 20% partial tax reduction on other products that account for 5% of their respective taxes.

　　Q: After the entry into force of the Protocol, what are the main products of the two countries that can receive tariff concessions?

Answer: On the basis of mutual benefit and win-win results, China and Pakistan have included products that account for 80% of their respective tax items into tariff concessions, and have given full consideration to the main export products that each other focuses on.Pakistan has included China's export advantage products such as mechanical and electrical, furniture, textiles, phosphate fertilizer, glass products, automobile and motorcycle parts into tariff concessions. China will focus on Pakistan's focus on cotton yarn, leather, clothing, aquatic products, nuts and other export advantages into the tariff reduction.With regard to the tariff reduction arrangements for specific products, the agreement can be found in the tariff reduction tables of the two sides after its publication.

　　Q: What is the significance of the upgrading of market access for goods for China and Pakistan?

A: on the basis of the original free trade agreement, China and Pakistan have greatly reduced the tariff level, which will provide more favorable conditions for the enterprises of the two countries to further open up each other's markets, promote the mutual expansion of exports of competitive products of both sides, promote the more balanced development of bilateral trade, and bring more tangible benefits and benefits to the enterprises and people of the two countries.

The substantial reduction in tariff levels between the two countries will further promote investment and production capacity cooperation, provide better conditions for Chinese companies to "go global" and overseas industrial layout, and promote the construction of the China-Pakistan Economic Corridor and the "Belt and Road. At the same time, in the long run, the reduction of trade costs between the two countries will promote the integration of China-Pakistan industrial chains, make full use of the comparative advantages of the two countries, enhance the competitiveness of enterprises in the regional and global industrial chains, and promote the economic development of the two countries.

　　Q: In the field of investment, what provisions are made in the Protocol?

Answer: On the basis of the investment chapter of the original free trade agreement, the two sides added provisions for the future work plan, and agreed to work to encourage mutual investment and strengthen cooperation to provide investors with a stable, transparent and predictable investment environment. In addition, the two sides agreed that negotiations will be held in due course in the future to upgrade the investment chapter.

　　Q: In the field of customs cooperation, what are the contents of the Protocol?

A: In the chapter on customs cooperation, the two sides have included provisions on customs electronic data interchange, committed to ensure the implementation of the memorandum of understanding on electronic data interchange signed by the competent customs authorities of China and Pakistan on November 3, 2018, and strive to take further measures, including appropriate mechanisms, to address concerns about export price information.

The cooperation between China and Pakistan in electronic data exchange will play an important role in strengthening the customs supervision of the two countries and improving the level of trade facilitation, so that enterprises can enjoy the preferential treatment provided by the protocol more conveniently.

　　Q: When is the Protocol expected to enter into force?

Answer: According to the relevant provisions of the "Protocol", the "Protocol" will enter into force on the 30th day when both parties receive a written notice to complete internal procedures or a time limit agreed by both parties. In the next step, the two sides will carry out their own domestic legal examination and approval procedures to promote the early entry into force of the Protocol. After the "Protocol" officially enters into force, we will publish the text on the "China Free Trade Zone Service Network" for reference by enterprises and individuals.