ISLAMABAD: While accepting the demand placed by the Ministry of Commerce, China has in principle agreed to hold second phase of negotiations with Pakistan on less than equal reciprocity principle in fovour of Pakistan.
“The very term ‘less than equal reciprocity principle’ is normally used in General Exchange of equal or identical advantages or privileges, such as removal of traveling restriction between two countries,” a well-placed official source at MoC elaborated to this scribe here the other day, adding that in the international trade it was meant as lowering of import duties and other trade barriers in return for similar concessions from another country.
The source further described that reciprocity was a traditional principle of GATT/WTO, but was practicable only between developed nations due to their roughly matching economies. “For trade between them and developing nations, the concept of relative reciprocity is applied whereby the developed nations accept less than full reciprocity from their developing trading partners,” the source added.
While sharing Grounds Rules for 2nd Phase Tariff Reduction Modality (TRM) for upcoming talks between Pakistan and China on China-Pakistan Free Trade Agreement (CPFTA) which are scheduled to be held by the end of current month, the source said that as per verbal agreement and not in black and white, both sides would have separate TRMs just like the first phase. “China will not apply any Safe Guard measures of Tariff Rate Quotas for imports from Pakistan as mentioned in their proposal, however, Pakistan will be allowed to include provisions of Safe Guard measures and Tariff Rate Quotas to protect the local industries,” the source added. Moreover, the source said that Second Phase request and offer lists would be formulated independent of the list phase tariff liberalization.
Referring to a three-day CPFTA talks between Pakistan and China held here in Islamabad in the first week of current month, the source said that both the countries also agreed to soften criteria banking sector for establishment of branches of Banks in each other’s countries.
“As per the understanding reached between the two countries, for establishing a branch, asset requirement would be reduced to US$15 billion from $20 billion, for all Pakistani Banks, at the end of the year prior to the submission of the application,” the source added, saying that understanding was fruit of hectic deliberations on the forum of third meeting of second phase negotiations on CPFTA.
The source said that MoC expected that the current account deficit would be curtailed to substantial levels which would be an enormous achievement through this FTA of the Ministry of Commerce.
“Working Group on Customs shared some information on modalities of establishing customs Electronic Data Exchange related to the implementation of CPFTA. Both sides agreed that this Working Group would have first face-to-face meeting in next few days in Beijing,” the source observed, adding that the group would mutually agree the frequency of the meetings and present their recommendations in the next meeting of CPFTA. On the basis of the information shared, it is expected that the above online system can be launched in 2016.
In evaluating the first phase of CPFTA, the source added that both sides would also raise concerns regarding insufficient utilization of concessions, influence to local industry as a result of concessions and misuse of certificate of origin which could be addressed in the second phase.
The source said that both sides also further analyze offers including the trigger mechanism for special safe guard measures and give their recommendations by mid-February, 2015 and also review the options for the establishment of a working group on Trade in Services & Investment, which would meet with next CPFTA meeting, scheduled to be held at the end of March, 2015.
Special business passport on cards to ease investment flow: Naqvi
ISLAMABAD: Federal Interior Minister Mohsin Naqvi indicated that the government is considering issuing special passports for members of the business...
