ISLAMABAD, Oct 5: The Sri Lankan government has finally notified the second phase-out of tariffs on products other than those in their no-concession lists under the free trade agreement (FTA) with Pakistan, it is learnt.
Pakistan and Sri Lanka had agreed a timeframe under the FTA effective from June 12, 2005 to phase out the second reduction in tariffs, which was due from July 1, 2006 but was delayed because of some political turmoil in Sri Lanka.
As per the agreement, the two sides are scheduled to scale down tariffs to zero per cent in a period of three to five years on the respective products not listed in the negative lists of the two countries.
Well-placed sources told Dawn on Thursday that Colombo notified further reduction in tariffs in September last. The sources said Colombo notified the reduction with retrospective effect from September 20, 2006.
The sources said Pakistan had yet to notify a similar reduction in duty under FTA with Sri Lanka. When contacted, a senior official at the Central Board of Revenue told Dawn that the lists had been sent to the law division for the last couple of weeks for vetting.“When we receive the list from the law division then we would notify it,” the official said, adding that it would have to be effective from the same date as was announced by the Sri Lankan government.
According to the agreed timeframe, Pakistan would have to reduce the tariffs to zero per cent on products other than those included in the negative list within a period of three years following the implementation of the agreement. This includes reduction by more than 34 per cent at the time of entry, more than 67 per cent by the second year and 100 per cent at the end of the third year of the agreement, making it zero per cent.
In case of Sri Lanka, the tariff phase-out schedule includes reduction by 20 per cent at the implementation stage followed by 30 per cent at the end of first year, 40 per cent by the second year, 60 per cent by the third year, 80 per cent by the fourth year, and 100 per cent at the end of five years of the agreement to zero per cent.
Despite the fact that Pakistan continues to be the second largest trading partner of Sri Lanka within the South Asian region, a closer look at the composition of exports reveals that the majority of the products exported by Pakistan includes cotton, rice, fish products, man-made staple fibres, iron and steel based products, medicines, fruits and vegetables such as potatoes, onions, oranges, spices like coriander, cumin and fennel seeds, polymers of propylene, plastic products, textile fabrics, etc.
The Sri Lanka's major exports to Pakistan at present are coconut and coconut products, natural rubber, tea, vegetable products, fibre boards of wood, garment accessories, spices, articles of plastics, natural graphite, aluminium-based products, etc.