Daily Times, Lahore, Tuesday, April 04, 2006
Joint study group to initiate Pakistan-Canada FTA
LAHORE: Steps are under way to set up a Pak-Canada Joint Study Group for initiating Free Trade Agreement between the two countries, as the volume of two-way trade is not up to the mark in Pakistan and Canada.
These views were expressed by Pakistan Ambassador to Canada Shahid Malik while speaking at the Lahore Chamber of Commerce and Industry on Monday. Member of the Canadian Parliament Sinclair M Stevens, Consul-General in Canada Saifullah Chattha, LCCI Senior Vice President Abdul Basit and former senior vice president Sohail Lashari also spoke on the occasion.
Mr Malik said that Canada is an important trading partner of Pakistan. At present two-way trade is about 600 million Canadian dollars and there is tremendous scope for increasing this volume.
He said that Pakistan has been trying to get greater market access in Canada. The High Commission and the government of Pakistan are continuously in touch with Canadian authorities in that regard. We have requested the Canadian government for a joint study group to initiate Free Trade Agreement and negotiations are in progress in this regard. That augers well for the promotion of businesses and would definitely help facilitate the two-way trade.
Sinclair M Stevens said that joint ventures between the two countries are well worth considering.
He said that there is a need to redouble the efforts for increasing the volume of trade between the two countries. The trade with Canada would be a stepping-stone for trade with the entire North American Market, which in itself is a very huge market with a huge potential. He said that Canada is an avenue that Pakistani businessmen can tap very well.
The LCCI Senior Vice President, Abdul Basit, said that the Canadian International Development Agency had also played a valuable role in the development of Pakistan.
He said that Pakistan’s growing economy and its strategic location as a regional hub - a principal gateway to the Central Asian Republics, a large consumer market, abundant natural resources, cheap but skilled labour, well established infrastructure and liberal investment friendly policies offer immense opportunities for foreign investment, which has been facilitated by the government through a number of incentives. All the economic sectors have been opened to foreign direct investment. Free movement of foreign exchange has been allowed. Foreigners have free access to capital markets and there is no restriction on borrowing if government guarantees are not sought.
There are also no restrictions on principal, dividends and profit. There is no limit on equity held by foreigners and no restrictions on entering into a joint venture with a Pakistani counterpart.
He said that the establishment of Gawadar Port, Textile/Garments Cities at Karachi, Lahore & Faisalabad, Sundar Industrial Estate (Lahore) and Faisalabad Industrial City (FIC) offer huge lucrative opportunities for foreign investors. Other attractive areas, which can be explored for investment by foreigners, could be oil & gas, engineering goods, mining, infrastructure, power, IT & telecom, chemicals, agro-based industries and SMEs.
These potentials need to be studied and monitored by the commercial sections of diplomatic missions of Canada and Pakistan for a more objective guidance of their investors and traders. Interaction between the chambers of commerce & industry of both the countries can be instrumental in raising the level of bilateral trade and investment. The trade between the two countries has averaged around US$ 368 million over the last three years. Pakistan’s exports to Canada have decreased from US$ 205.9 million in 2002-3 to US$194 million in 2004-5.
On the other hand, imports from Canada had increased from US$ 121.5 million to US$ 196.6 million during the same period.
Major exports from Pakistan to Canada comprise textile yarn & fabrics, articles of apparel & cloth accessories, fruit and vegetables, rice, sports goods and leather products, etc. Main items of imports from Canada to Pakistan consist of pulp and waste paper, coal, iron & steel, pharmaceutical products, general and specialized industrial and power generating machinery, peas & chick peas, lentils, etc.