FTA to double Pakistan, Sri Lanka trade
11 August 2005
Pakistan Times Business & Commerce Desk
ISLAMABAD: With the start of free trade agreement between Pakistan and Sri Lanka, the annual trade volume between the two countries was likely to double within the first year due to the increase in trade in tea, textiles, betel leaves and other items.
Business communities of the two countries are likely to play an important role in doubling the present trade volume to double over $ 300 million in the very first year of inception of FTA.
Pakistani traders were quick to organize a three-day Pakistan trade exhibition in Colombo to boost prospects of bilateral trade. Presently Sri Lanka traders look towards India for meeting their demands but entry of Pakistan in the arena is likely to give them a very tempting alternative.
A similar event is being planned by the Sri Lankan exporters in Pakistan in next few weeks.
The magnitude of Pakistan’s exports to Sri Lanka was worth 97 million dollars in 2004, up from 76 million dollars in the previous year. On the other hand, Sri Lanka’s exports to Pakistan stood at 48 million dollars, up from 38 million dollars in 2003.
Sri Lanka was making efforts to regain the tea market she lost in Pakistan over two decades ago. In-spite of Free Trade Agreement Sri Lanka would get duty free access to 10,000 tonnes of tea to Pakistan.
Significantly, the two countries are members of the seven-nation South Asian Association for Regional Cooperation [SAARC] which has also agreed to pursue a free-trade arrangement covering one-fifth of the world’s population.
A full regional free trade agreement was to be in place by 2001 as agreed by SAARC leaders in 1998, but negotiations are still underway.
The slow movement of SAARC prompted Sri Lanka to use the fast-track of bilateral route to boost trade with neighbouring countries in the region. Sri Lanka signed a free trade deal with India in late 1998.
After signing another one with Pakistan, Sri Lanka is negotiating similar deals with neighbouring Bangladesh and Maldives.
To recap, the President of Sri Lanka Chandrika Bandaranaike Kumaratunge during President Pervez Mushrraf’s visit to Colombo had said that FTA will lead to stronger Lanka-Pakistan ties.
The landmark Free Trade Agreement [FTA] between Sri Lanka and Pakistan will open a new chapter of potential cooperation for mutual benefit, President Chandrika Bandaranaike Kumaratunga had remarked.●