ISLAMABAD, June 3: Pakistan and Sri Lanka are likely to develop consensus on scaling down custom duty on 2-4 items to finalize the much awaited free trade agreement (FTA) between the two countries.
An official source told Dawn on Thursday that an official delegation has left for Colombo to negotiate duty reduction on these items. "During the two-day discussion on the FTA, it is expected that the two sides will agree to reduce customs duty on the said items," the official added.
According to informed sources, Sri Lanka wanted Pakistan to allow at zero rate import of tea, while Islamabad asked for zero rate export of rice and potatoes to Colombo under the proposed FTA.
The sources said that due to local production of rice and potatoes, Colombo is not willing to reduce custom duty on import of these commodities from Pakistan under the treaty. Again, the sources said this is a major demand of Pakistan to export more rice and potatoes to Colombo.
Pakistan exported around $5 million worth rice to Sri Lanka during the year 2002-03, while import of tea from Colombo stood at about $4 million during the same year. The FTA framework agreement was signed by the two sides in 2002 during the visit of President Pervez Musharraf to Sri Lanka. But it is yet to be finalized.