Pakistan and China are set to launch the much awaited free trade regime under the Early Harvest Programme (EHP) from January 1, 2006, officials said. The trade under the EHP includes arrangement on the basis of mutually agreed lists of items. The first list includes fruits and vegetables and marble. Both nations will reduce tariff on these items to zero gradually, but not later than end of 2007. The second list includes home textiles, towels, chewing gum, cotton fabric, cutlery, surgical goods and sports goods for Pakistan and machinery and chemicals for China. These items would also be zero-rated gradually. Items in the third list provide tariff concession on the basis of margin of preference. Against the Most Favoured Nation status (MFN) tariff of 15%, the Pakistani mangoes and oranges will be exported to China at 5% tariff from next month and from Jan 2007 these could be exported to China at zero duty. Similarly, Chinese-made textile machinery and organic chemicals will also enjoy preferential duty next year and duty-free access in Pakistan from 2007. The Chinese government has also allowed import of Pakistani rice on 1% duty from the new calendar year, starting from January, 1. These are benefits brought by the EHP between the two countries, signed formally early this month in Beijing. Officials said this also reflects the two countries' resolve resorting to economic diplomacy in order to transfer fruits of their decades' old deep-rooted diplomatic partnership to their people. The EHP is a significant step towards the free trade agreement (FTA) between the two economies. According to the EHP, more than 3,000 categories of products will have zero tariff from January 1, 2006. 486 categories of Chinese goods exported to Pakistan will enjoy the zero-tariff treatment, mainly vegetables, fruit, stone materials, textile machinery and organic chemical products.
