ISLAMABAD, May 30: Commerce Minister Humayun Akhtar Khan said on Wednesday that Malaysia has provided market access in various sectors, including Islamic banking and Takaful (an Islamic mode of insurance), to Pakistani service providers under the free trade agreement (FTA).
"These concessions have not been extended by Malaysia to any other country. Limit of aggregated foreign equity participation in existing Malaysian domestic Islamic financial institutions has been increased from 30 per cent to 49 per cent," the minister said while releasing details of the FTA at a press conference recently concluded with Malaysia at Kuala Lumpur on May 24.
Mr Khan said this facilitation will also qualify Pakistani financial institutions to conduct a full range of Takaful business in international currencies without any limitation, etc.
He said the initiative relating to investment will help secure FDI from Malaysia. The constitutional and procedural requirements are likely to be completed by both countries within two months and thereafter an agreement will be signed.
The minister said the date and timing of the event will be settled through diplomatic channels. After signing of the agreement, the package will be made public, he added.
Elaborating the overall impact of the FTA with Malaysia, he said it would pave the way for a regional agreement with 10 countries of Asean.
"This landmark agreement is the first between two OIC member countries and will serve as a precedent for many future such agreements between Muslim countries," the minister added.
The comprehensive agreement with Malaysia covers trade in goods; trade in services, investment and economic cooperation.
He said Malaysia is an important member country of Asean and this agreement will provide Pakistan a firm foothold in vibrant and growing economies of East Asia. It will help Pakistan to be a full dialogue partner of Asean.
Asean and China have already concluded an FTA on trade in goods and trade in services on 10 + 1 basis.
The Asean member countries are in the process of reducing/eliminating tariff for imports from China to Asean countries, including Malaysia.
The commerce minister said Pakistan has been able to create a level playing field for our exports to this region. The preferential/tariff free regime with China has already been established through Pakistan-China FTA recently signed at Islamabad. This is an unprecedented success of our trade diplomacy efforts.
Under the FTA with Malaysia, the minister said Pakistan has undertaken to eliminate/reduce tariff mostly on raw material and Malaysia shall provide market access to our textiles, bed-linen, other home textiles, kinno and prepared food etc.
The manufacturing sectors of Pakistan will now be able to source raw material and inter-mediatory goods from China, as well as from Malaysia at preferential/zero duty. This will address the issue of trade diversion and help in global competitiveness of our exports.
