Malaysia-Pakistan FTA Expected to be Finalised by Year End

FTA between Malaysia and Pakistan is expected to be signed by year-end and implemented in 2007. Malaysian businessmen have taken advantage of the Early Harvest Programme (EHP) signed by KL and Islamabad in October last year.

For the January-August 2006 period, Malaysia has exported RM24.3 million worth of products to Pakistan, mainly petrochemical products, oleic acid and rubber.

The EHP covers products with most favoured nation (MFN) tariffs of 10 percent and below while products with MFN tariffs of 5 percent are eliminated. 40 Malaysian companies are doing business in Pakistan.

Malaysia's offer to Pakistan covers 114 tariff lines which include yarn, textiles and clothing while Pakistan offers 125 products such as electrical appliances, machinery, plastic products, chemical, rubber and timber products.

On the Malaysia-Pakistan FTA negotiations, Malaysia has requested reduction in import duties on motor vehicles and palm oil.

Pakistan and Malaysian governments agreed to work to boost bilateral trade to US$1 billion annually from the current US$730 million. Both countries also agreed in principle to set a joint investment company to promote investments in Pakistan and vice versa.

Rules of Origin for Textile and Apparels : Product Specific Rule (PSR) Criteria

“Product Specific Rules” are rules that specify that the materials have undergone a change in tariff classification or a specific manufacturing or processing operation, or satisfy an ad valorem criterion or a combination of any of these criteria. 

It is proposed that PSR be applied on textile and textile products and products which have undergone sufficient transformation in a Party shall be treated as originating goods. Products which satisfy the Product Specific Rules shall be considered as goods to which sufficient transformation has carried out in a Party. 

The following processes can be considered as sufficient transformation: 

·       spinning;

·       weaving;

·       bleaching;

·       dyeing;

·       printing;

and

·       finishing

A detail description of textiles under products specific rules is available for viewing on MKMA website.  

 

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