Malaysia Pakistan Free Trade Agreement

The Malaysia Pakistan Free Trade Agreement (FTA) formally known as The Malaysia Pakistan Closer Economic Partnership Agreement (MPCEPA). The Agreement on the Early Harvest Program for the Free Trade Agreement between the Government of Malaysia and the Government of the Islamic Republic of Pakistan signed in Kuala Lumpur on 1 October 2005 Malaysia and Pakistan established the Malaysia-Pakistan Closer Economic Partnership Agreement (MPCEPA) on 8 November 2007. MPCEPA came into force on 1 January 2008. It aims to promote bilateral trade between the two countries by giving tariff preferences on various items. The FTA is one of the most comprehensive agreements Pakistan has signed and covers trade in goods, services, investment and economic cooperation. Under which Pakistan agreed to eliminate tariff on 43.2% of its current imports from Malaysia by 2012. On the other hand, Malaysia eliminated tariff on 78% of imports from Pakistan. Two tracks for Margin of Preference (MoP) have been set under FTA on the basis of product categories. The five palm based products (margarine, glycerol, non-ionic soap, medium density fiber board and other related commodities) are included under first track. In this track, the import tariff will be reduced by 5% MoP on January 2008 followed by an additional 5% MoP every year. The Track two includes Crude Palm Oil, Palm stearin, RBD palm oil, Palm olein, Crude Palm Kernel oil and other related commodities. Under this track, import duty will be reduced by 10%.