ISLAMABAD, June 21: Pakistan is negotiating Free Trade Agreements (FTAs) with the United States and Singapore to increase its exports and thus narrow its rising trade deficit, which is expected to touch $6 billion by June 30 this year.
Informed sources told Dawn here on Tuesday that the government has decided to seek full FTA rather than just the Bilateral Investment Treaty (BIT) which is only one component of the FTA.
However, Pakistan would continue negotiating BIT with a number of countries, including the United States and Germany.
The government had conducted preliminary FTA negotiations with the US and Singapore which would now be further discussed in July separately to sign FTA, preferably during 2005.
Sources said the government was pursuing talks with a number of important countries to sign FTA that will not only increase exports but would also help lower its trade deficit currently at $5.5 billion.
The government maintained that unprecedented rise in oil prices had pushed the oil import bill up by 30.9 per cent to $3.094 billion and as a result trade deficit widened to $4.8 billion in the first 10 months of 2004-05. “However, this trade deficit is still rising sharply and it may eventually touch $6 billion figure,” a source said.
It was in that backdrop, the sources said, that Foreign Office, ministry of commerce and the Economic Affairs Division (EAD) had been given the task by the higher authorities to conduct negotiations with a number of important countries for signing the FTA.
Foreign Minister Khurshid Mehmood Kasuri is believed to have held preparatory talks with the US officials during his recent visit to Washington. Now both the governments were working to finalize mutually acceptable dates for holding more talks over the issue some time in the middle of July.
Similarly, the officials concerned including from the Board of Investment (BoI) would leave for Singapore in the first week of next month to further hold talks for signing the FTA. Earlier, both sides had held talks in Islamabad over the issue.
“Initially we expect to identify 50-60 items to be traded without any duty between the US and Pakistan and between Singapore and Islamabad,” a source said.
He said Pakistan and Singapore had signed a trade agreement on March 8, 1995 which now Singapore government wanted to convert into FTA. Pakistan was encouraging the idea as it would help import a number of duty free items from Singapore including machinery, spare parts, chemicals, vegetable oil, photographic equipment & material, dying, colouring and tanning material, yarn and thread of synthetic fibre.
Singapore, the sources said, had expressed its willingness to import textile, cotton, rice, wheat, surgical equipment, sport goods and fresh fruits and vegetables from Pakistan.
The Sources said that the United States had signed FTA with a few countries including Behrain and Uruguay and Pakistan could sign this FTA with Washington.
Under North Atlantic Free Trade Agreement (NAFTA), Canada and Mexico enjoyed the privilege of among the few countries in the world to have extremely beneficial trade relations with the United States.