China to start Transit Trade with Pakistan next Year
By Ruth Chen 'Pakistan Times' Foreign Correspondent

BEIJING (China): China hopes to start transit trade with Pakistan and two Central Asian States next year.

Official sources said in Beijing on Friday that a general framework agreement has already arrived at between China, Pakistan, Kyrgizstan and Kazakhstan.

They made considerable progress to sort out some relevant legal and administrative matters, at the experts-level meeting held in Islamabad recently.

The meeting mainly discussed volume of transit trade, number and valid term of visa from 2006 to 2007, and problems existing in the process of implementing inspection, quarantine and customs rules.

Four countries agreed that Pakistan would draft a proposal to set up a promotion institution for joint transportation for the next meeting. The proposal will focus on expanding trade exchanges through Karakuram Highway.

The four-country Transit Trade Agreement among China, Pakistan, Kyrgizstan and Kazakhstan was signed in 1995 and started to function in 2004 owing to various reasons.

According to the agreement, the four countries would issue some licenses to transit trade and grant visas with certain period of validity to transit traders. In order to make transit transportation more convenient, the four countries will jointly draw up a unified procedure for Customs Clearance.

The Agreement will remain in force for five years and will be assessed sometimes.

Li Yanwu, an official with the highway management department of the Chinese Ministry of Communication, said China, Pakistan, Kazakhstan and Kyrgyzstan were neighbours and it had been a common pursuit of the four countries to seek regional development through cooperation.

Communication and transportation play a very important role in seeking development through cooperation, Li noted. The four countries first reached an agreement on transit transportation in 1995.

Negotiations on FTA

Meanwhile Pakistan, China are scheduled to hold fourth round of negotiations on Free Trade Agreement (FTA) in Beijing next month.

The two sides expected to conclude the agreement by the end of this year. The FTA will be a major step forward expanding the scope of import-export between the two countries.

According to the sources, FTA was raised at a time when such trade arrangements are becoming increasingly popular and the two countries have stepped up their efforts to strengthen their economic ties.

Pakistan pinned a great hope on FTA, also for correcting its balance of trade position with China.

Over past few years, China-Pakistan economic and trading relations developed quickly. In 2005, bilateral trade reached US$4,26 billion, up by 39% compared with 2004.

Trade between China and Pakistan amounted to US$1,018 billion in January through March this year, up by 42.3% compared with the same period last year.

By March 2006, contractual investment of China in Pakistan was US$100 million, turnover of overseas projects was US$6,9 billion. Pakistan invested US$24,31 million in China in all.

The enhancement of the bilateral ties reflects the political will of the two governments and also the aspiration of the two peoples, the sources said, adding that it serves the fundamental interests of two sides and is conducive to peace and prosperity in the region.

The two countries attach great importance to FTA for translating their time-tested and evergreen relations into economic gains.●