ISLAMABAD, Jan 1: The Free Trade Agreement (FTA) between Pakistan and Malaysia has become effective from January 1, 2008, aimed at further increasing cooperation between the two countries.

Both sides have agreed to favour each other through what was termed a “comprehensive” FTA signed earlier and in this behalf Federal Bureau of Revenue (FBR) issued a notification on Tuesday.

According to the notification, the FTA was operationalising from 1.1.2008. The government has issued SRO, wherein margin of preference of 20 per cent of existing tariff rates to 129 products has been granted. Whereas tariff on palm oil has been reduced by 10 per cent on a margin of preference, which will be reduced further by 5 per cent on January 1, 2010.

Similarly, tariff rates have been reduced ranging from 0 per cent to 40 per cent on more than 5000 Pakistan Customs Tariff lines.

“Both the countries need to forge closer economic cooperation and this will now be possible through FTA”, Secretary General Revenue Division and the Chairman of FBR, Mr Abdullah Yousuf told Dawn.

Responding to a question, he said that Pakistan would seek more market access for its products to Malaysia. Similarly, he said that Pakistan would also be providing this market access to Malaysia.

“We need to export additional products to Malaysia and this job could be done due to having FTA between the two countries”, Mr Yousuf said.

He agreed that Pakistan was already importing many products specially palm oil and as such Malaysia was immensely benefiting from the existing trade. “But now we see a good market and potential for Pakistani products in Malaysia”, the secretary general revenue division said.

He said that the government would provide maximum facilities to Pakistani exporters to increase the country’s exports to Malaysia.

Malaysian market has good potential for Pakistani exports and can also serve as a gateway for the entire Asean region.

The FTA with Malaysia will ensure that Pakistani products have an edge over the products of other countries in the Malaysian market. “This historic and landmark agreement is the first bilateral FTA between two Muslim countries-- both members of OIC; it is Malaysia’s first such agreement with any country of South Asia and also Pakistan’s fist comprehensive agreement with any country”, the notification said.