Type of intergovernmental agreement, often part of a regional intergovernmental organization, where barriers to trade (tariffs and others) are reduced or eliminated among the participating states called trade bloc. Agreements involve cooperation between at least two countries to reduce trade barriers, import quotas, tariffs and to increase trade of goods and services with each other.
A free-trade area (FTA) is the region encompassing a trade bloc whose member countries have signed a free trade agreement. People are also free to move between the countries, in addition to a free-trade agreement, it would also be considered an open border. It can be considered the second stage of economic integration.
Pakistan has been one of China’s major trade partners. Pakistan has a long and strong relationship with China. The long-standing ties between the two countries have been mutually beneficial. A close identity of views and mutual interests remain the centre-point of bilateral ties. The Chinese leadership has acknowledged Pakistan’s steadfast support on key issues.
A common quotation referred to Pak-China Friendship is, “A Friendship Higher than the Heights of Himalayas and deeper than the depths of Arabian Sea.” The support that China and Pakistan give each other is considered significant in global diplomacy.
Pakistan being a major partner of the Belt and Road Initiative (BRI) was the most important of all. Recently though, economic trade between Pakistan and China is increasing, and a free trade agreement has been signed. The CPEC will connect Pakistan with China and the Central Asian countries with highway connecting Kashgar to Khunjerab and Gwadar.
The first Special Economic Zone (SEZ) at Rashakai would be inaugurated in the current month where 20 factories would be set up initially. SEZs would be given to the local people and latest technology would be transferred from China to Pakistan. The China-Pakistan Free Trade Agreement is a major free trade agreement signed between the People’s Republic of China and Pakistan.
A Second Phase agreement is currently being negotiated between China and Pakistan. The second phase will lower tariffs further as well as normalize various trade procedures.
The MoUs and the second stage Free Trade Agreement (FTA) were signed towards the conclusion of Prime Minister Imran Khan’s second trip to China.
Signing Memoranda of Understanding (MoUs) on the first Special Economic Zone (SEZ) and socio-economic development and a new agreement on free trade the Pakistan and China concluded the second stage of FTA. The new Free Trade Agreement, which was signed after negotiations spanning over seven years, is aimed at strengthening trade ties. Under the new FTA, China would open up 90 per cent of its market for Pakistani goods whereas Pakistan would share 65pc of its market with Chinese exports.
The second phase of China-Pakistan FTA would give further boost to trade and economic relations between the two countries. New list of 313 items included in the second phase of China-Pakistan Free Trade Agreement includes textile goods, leather, engineering, chemicals, furniture, auto parts, plastic, rubber, paper board, ceramic, glass, surgical instruments, footwear, wood, articles of stones, sea food, meat, tractors, home appliances etc. FTA Phase-II, China would provide market access to 90% of Pakistani commodities at zero duty, while Pakistan would give China access to 65% of tariff lines.
Under the FTA and the investments made in Pakistan by Chinese companies. China-Pakistan Free Trade Agreement to promote business
The second phase of China-Pakistan Free Trade Agreement (FTA) was a great opportunity to benefit from. Pakistan gets advantage in phase-II of FTA with China.