A recently signed series of trade agreements and memoranda of understanding between Pakistan and China included a landmark Free Trade Agreement (FTA) that could triple bilateral trade to $15 billion within five years. Pakistan is also expecting an inflow of investment of about $6 billion during this period.
Under the new agreements, Pakistan will have duty-free access to China’s market for products such as leather articles, sports goods, cotton fabrics, iron and steel products and engineering goods. China will also reduce its tariff by 50% on products including leather goods, knitwear, woven garments, plastic products and rubber products. China, in turn, will have free access to Pakistan’s machinery, organic and inorganic chemicals, and raw materials markets for various industries.
The first phase of the bilateral FTA applies to trade in goods and investment, with a second phase covering services due to be negotiated during 2007.
