ISLAMABAD - Two-day talks on China-Pakistan Free Trade Agreement (CPFTA) phase-II would start from Monday (tomorrow) in Islamabad in which Pakistan will try to finalise the agreement.

“We are trying to finalise the FTA-II with China in the upcoming talks, which would be held from April 2 to 3 in Islamabad,” said an official of the ministry of finance. He further said that both the countries would finalise the remaining issues in upcoming talks, which would be 10th round on the CPFTA phase-II. A few days ago, Secretary Commerce Mohammad Younus Dagha hoped to finalise the remaining issues so that a formal announcement can be made during the prime minister's visit to China in April, 2018.

Pakistan and China had agreed for granting tariff reduction on 75 percent tariff lines under the proposed revision in the FTA. However, Federal Board of Revenue had opposed the Ministry of Commerce’s proposals to increase the number of items with zero duty from 2,600 tariff lines to 6,000 tariff lines. Sources informed The Nation that FBR has asked the ministry of commerce not to make hasty decision over finalising the second phase of FTA with China, as country is already facing $12 billion trade deficit with neighbouring country. In FBR’s view, the decision would put negative impact on the country’s industries.

In this regard, Commerce Division has already initiated a dialogue with domestic industry. The ministry of commerce recently held a meeting with relevant stakeholders to take their viewpoint on the CPFTA phase-II before holding talks with Chinese authorities. The stakeholders generally agreed with the offer framed by the Ministry of Commerce based on past consultations and also gave some additional recommendations for their respective sectors, which were accommodated.

It may be mentioned here that these negotiations had started in 2012 to finalise the revised version of the FTA. Under the first phase of FTA, Pakistan's trade balance with China had worsened, and it had reached $12 billion mark in last financial year 2016-17. Pakistan's major exports to China are cotton yarn, chemical material, crude vegetable material, rice, raw hides and skins, fish and fish preparations.

On the other hand, the major imports of Pakistan from China are machinery and its spare parts, manufactured fertilizer, chemical elements, yarn and thread of synthetic fibre, iron and steel, chemical materials and products, vegetables and synthetic textile fibre, road vehicles and their parts, non-ferrous metals, tyres and tubes of rubber etc.