ISLAMABAD, Aug 3: Minister for Commerce Abdul Razak Dawood has said the Free Trade Agreement (FTA) signed between Pakistan and Sri Lanka will increase their annual volume of trade from existing $130 million to $230 million.
“There will be an additional $100 million trade annually between Pakistan and Sri Lanka because of signing this FTA and we plan to sign a similar agreement with Bangladesh as well,” he added.
Addressing a news conference here on Saturday Mr Dawood, who accompanied the President during his visit claimed that the visit had been a great success in respect of increasing trade and economic relations with Bangladesh, Sri Lanka and China.
Giving the details, he said that market access offered to Bangladesh in Pakistan will help finalize FTA between the two countries. He said Bangladesh has been allowed to export duty free 10,000 tons of tea but at the same time it could export duty free jute without the limit of any quantity.
“We have done this favour with a view to carving out extremely good and brotherly relations with Bangladesh by putting the past much behind us.”
He said Pakistan needed to improve its shipping lines as currently a number of consignments were reaching Bangladesh via Singapore. Moreover, he said at present shipping was very infrequent and has to be made on regular basis.
The minister for commerce said that he would now be meeting exporters and importers to increase Pakistan’s trade relations with Bangladesh and Sri Lanka. “One of the goals is to balance the trade which is currently in our favour,” he added.
He said that he would again be visiting Sri Lanka on September 19 to get the FTA agreement operative. “A number of importers and exporters will also accompany me,” he added.
To a question, he said that FTA signed with Sri Lanka was a hard agreement and not a Memorandum of Understanding (MoU). This agreement, he said, will be fully operative in three phases and almost in three years period.
Dawood said that first there will be a “narrow list” of items which could be traded totally duty free between the two countries. “Then there is a bigger list of items for which both the countries would be giving concessions to each other,” he said.
“Lastly both the countries will be gradually offering duty free access to a greater number of items and this process will take three years to complete,” said the minister for commerce.
He said Sri Lanka was interested to export tea, rubber and coconut oil to Pakistan while Pakistan desired to export engineering goods and chemicals to Sri Lanka. Pakistan, he said, was already exporting yarn to Sri Lanka.
Asked whether Bangladesh has sought market access for medicines, the minister for commerce said it required a procedure, which called for registration with the ministry of health. He expressed the hope that if Bangladesh was interested in exporting its medicines to Pakistan it will register itself with the ministry of health. “The procedure is followed every where in the world and Pakistan is exporting its medicines to Iraq and Kenya under the same arrangements,” he added. Now negotiations were currently being held to export Pakistani medicines to Morocco.
Responding to a question, he said that Pakistan was exporting its goods worth $90 million annually to Sri Lanka while the volume of Sri Lankan exports to Pakistan was to the tune of $35 million and as such the balance of trade was in Pakistan’s favour. “In fact we have told the authorities of both Bangladesh and Sri Lanka that Pakistan is ready to remove this imbalance by importing more from them.”
Dawood did not think that India could create hurdles in improving better trade and economic relations with Bangladesh and Sri Lanka. “But we have to compete to increase our exports to these countries,” he said adding that G-I pipes from Pakistan required 20 per cent export duty to Bangladesh and Sri Lanka while India was exporting the same at 10 per cent duty.