Study on China-Sri Lanka Free Trade Agreement

The Agreement contains no explicit transition period as the tariff elimination on imports of goods for
both Parties is to be completed within a period of ten years (2019). Duty reductions take place on
the date of entry into force of the Agreement and on following years: New Zealand (2008-2011,
2012, 2013, 2014-2015 and 2016) and China (2008-2011, 2012, 2013-2015, 2016, 2017-2018 and
2019).
Liberalization of Tariff Lines:
Both the countries have gradually eliminated their tariff lines from the date the agreement came
into force in 2008. As shown in Table 3.8, in the case of New Zealand, 57.6 per cent of total tariff
lines were already duty-free on an MFN basis, 111 even before the agreement was in force in 2008.
Upon entry into force, New Zealand has allowed access to further 5.7 per cent of tariff lines dutyfree
for imports from China in 2008. A total of 63.3 per cent of New Zealand’s tariff lines have
become duty free accounting 39.2 per cent of imports from China. By the end of implementation in
2016, 100 per cent of tariff lines that account for all the imports from China will be duty-free.
Table 3.8: New Zealand’s Tariff elimination commitments under the Agreement and corresponding
average trade
Duty phase-out No. of
period
lines
% of total lines
in New Zealand's
tariff schedule
Value of New Zealand's
imports from China
(2005-2007)
in million US$
% of New Zealand's
total imports from
China
2005-2007
MFN duty free (2008) 4,190 57.6 1,264.8 37.4
2008-2011 415 5.7 60.5 1.79
2012 1,967 27.1 1,237.0 36.58
2013 86 1.2 5.4 0.16
2014-2015 466 6.4 148.6 4.39
2016 146 2.0 665.5 19.68
Total 7,270 100.0 3,381.7 100.0
Sources: WTO Secretariat, Factual Presentation of Free Trade Agreement Between China and New
Zealand (Goods and Services), 2010.
China has also allowed duty-free access to 8.4 per cent of total tariff lines on an MFN basis 112 in
2008 before the entry into force of the agreement (Table 3.9). Upon entry into force, a further 15.7
per cent of tariff lines have become duty-free for imports from New Zealand in 2008. By the end of
the transition period in 2018, a further 72.9 per cent of tariff lines are to be liberalized, accounting
for 39 per cent of imports from New Zealand. Thus, a total of 97.1 per cent of tariff lines will be dutyfree
under the Agreement, corresponding to 88 per cent of imports by value from New Zealand.
111 New Zealand's MFN tariff schedule in the year of entry into force of the Agreement (2008) comprised
7,270 tariff lines at the HS 8-digit level; 99.5% of this tariff is ad valorem, 0.1% relates to lines with specific
duties; and 0.4% to others.
112 China's MFN tariff schedule in the year of entry into force of the Agreement (2008) comprised 7,646 tariff
lines at the HS 8-digit level; 99.4% of this tariff is ad valorem, 0.58% relates to lines with specific duties; and
0.07% to others.
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