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Landmark FTA to be signed with Pakistan

Colombo Daily News, Sri Lanka

7 February 2005

President arrives in Islamabad today

Landmark FTA to be signed with Pakistan

from Pramod de Silva in Islamabad

President Chandrika Bandaranaike Kumaratunga will arrive in Islamabad tonight (7) on a three-day state visit. The highlight of President Kumaratunga’s visit to Pakistan is the signing of the landmark Free Trade Agreement (FTA) between the two SAARC partners.

The comprehensive FTA is the second to be signed by Sri Lanka with another SAARC country. The first was with India, signed in 1998. This will also be Pakistan’s first FTA with a SAARC country.

President Kumaratunga, who will be accompanied by a high powered official delegation, is due to hold talks with Pakistani President Pervez Musharaff and Prime Minister Shaukat Aziz on trade, bilateral and regional issues.

She is also expected to brief the Pakistani leaders on the reconstruction of tsunami affected areas in Sri Lanka with international help and the peace process. Pakistan responded swiftly Lanka’s call for help following the tsunami tragedy, sending massive consignments of relief supplies.

The Lanka-Pakistan FTA was to have bee inked last month, but was postponed in the aftermath of the tsunami cataclysm and the deferral of the SAARC summit.

Under the proposed FTA, both countries will slash duties totally on hundreds of products traded between them. This is likely to boost trade among the two countries substantially and give Sri Lanka a bigger say in the trading process.

According to sources close to the FTA operationalisation, Pakistan will undertake elimination of tariff on spices, plastics, rubber and rubber products, raw silk and silk yarn, precious jewellery, precious stones, wooden and cane furniture and tea.

Sri Lanka will give market access to Pakistan on items such as oranges, dates, apples, fruit juices, welded pipes, iron and steel products, rice and potatoes.

There will also be a negative list of products both countries deem strategically important and which therefore need to be protected. Pakistan and Sri Lanka will eliminate not only the tariff but also non-tariff barriers, which will contribute to the establishment of a free trade area.

The Economic Coordination Committee of the Pakistani Cabinet in January gave the green light to institute the regime of no duty, no draw back, Free Trade Agreement with Sri Lanka.