FTA under review to enhance Pakistan’s export footprints in China

The review aims to enhance trade agreement's benefits for pakistan, focusing on expanding export opportunities to China through increased tariff concessions and extended product coverage

The China Pakistan Free Trade Agreement (CPFTA) Phase II, set to conclude in 2024, is now under review to enhance the continuity and favorability of the trade agreement for Pakistan. The amendments aim to expand Pakistan’s export footprint in China through additional tariff concessions and broader product coverage. Before the initial Free Trade Agreement (FTA) with China, Pakistan’s exports were valued at US$0.5 billion in 2006. Following the inception of the FTA, these exports increased to US$1.6 billion in 2016, according to Gwadar Pro. By 2022, after the implementation of CPFTA Phase I and Phase II, exports reached $2.53 billion. Data from the China General Administration of Customs shows that Pakistani exports to China climbed to US $3.452 billion in 2023.

The initial FTA was signed on November 24, 2006, and concluded in December 2012. CPFTA Phase I was signed on April 28, 2019, and came into effect on January 1, 2020. CPFTA Phase II is scheduled to conclude this year. By the end of the initial phase, China and Pakistan had abolished tariffs on 35.5% of product lines. Under CPFTA-II, coverage from both sides has expanded to 75%. Phase II of the CPFTA enhances market access for both countries. China has eliminated tariffs on 313 product lines, benefiting major Pakistani exports including textiles, cotton, frozen meat and other animal products, seafood, prepared food, chemicals, carpets, marble, plastics, oilseeds, chili, footwear, engineering goods, machinery, leather, and auto parts.