Malaysia, Pakistan sign accord to reduce trade tariffs
The News International (Pakistan), 2 October 2005
Malaysia, Pakistan sign accord to reduce trade tariffs
KUALA LUMPUR: Malaysia and Pakistan on Saturday agreed to remove tariffs on scores of products they trade with each other including fish, fabric, fruit and machines as the first step toward a planned free trade agreement.
The two countries exchanged a list of 239 products that will benefit from the agreement, most of which will be traded with no tariffs. The duties on others will be reduced to 5 per cent.
The so-called Early Harvest Programme was signed by Malaysia’s trade minister Rafidah Aziz and Pakistan’s investment minister Abdul Hafeez Shaikh, in the presence of the prime ministers of the two countries.
Pakistan Prime Minister Shaukat Aziz is in Malaysia to attend an Islamic economic forum. A Malaysian government statement said the Early Harvest Programme, which comes into affect Jan. 1, 2006, will provide "an impetus for an early conclusion" to the negotiations for the bilateral free trade agreement, or FTA.
The programme will expire once the FTA comes into force or on March 31, 2007, whichever is earlier. However the aim is to conclude the FTA by mid-2006.
Pakistan will extend the benefits on 125 Malaysia products, covering 5.49 per cent of imports by value. The items include machinery, mechanical equipment, plastic products, chemical products, rubber, timber products and live and ornamental fish. Malaysia will waive or reduce duties on 114 Pakistani items, which account for 10.97 per cent of its total imports from Pakistan by value, and include textile, clothing, agricultural products, jewelry, citrus and dried fruit.
Malaysia’s major export to Pakistan are palm oil, margarine and telecommunication equipment. Pakistan’s main exports to Malaysia are fresh, chilled and frozen fish, rice, textile yarn, fabrics and woven cotton fabrics.
Later Pakistan and Malaysia expressed satisfaction over their growing multi-faceted ties as Premier Abdullah Ahmed Badawi assured Prime Minister Shaukat Aziz his country’s full support to Islamabad becoming a Full Dialogue Partner of the Association of Southeast Asian Nations (Asean).
Pakistan is already a sectoral partner of the strong regional economic bloc and most of its members have supported its bid to becoming the full dialogue partner.
Prime Minister Aziz held over an hour long exclusive meeting with Prime Minister Badawi on wide-ranging issues. The two leaders continued discussion over a lunch hosted by Badawi in honour of Prime Minister Shaukat that lasted for about two hours.
The prime minister sought Malaysia’s support on the Asean membership, who assured his country’s full cooperation in Pakistan’s efforts to attain the full dialogue partner status. He explained to the Malaysian leader that Pakistan was seeking increased relations with the Far Eastern countries and the organizations of this region under its Vision East-Asia policy.
Pakistan is also seeking Malaysian support for getting membership of ASEM (Asian Europe Meeting), Asia Pacific Economic Cooperation and Indian Ocean Rim for Regional Cooperation (IOR-ARC).
The two leaders noted with satisfaction that the visit of the Malaysian Premier to Pakistan in February and Prime Minister Shaukat’s return visit to Kuala Lumpur in May and his current tour have a very positive impact on ties between the two brotherly Islamic countries. As a sequel to these visits and effective diplomacy, both the countries were able to sign the Early Harvest Programme (EHP) in a record time of five months, after the negotiations for the agreement started in May. "This EHP will give a big fillip to the trade between the two countries," the prime minister said of the agreement which is a first step towards concluding a Free Trade Agreement (FTA) by March 2007.
The frequent exchanges of high-level visits have also resulted in an increased interest of Malaysian companies in Pakistan which are now more actively engaged in various economic activities, particularly in telecom, real-estate, information technology, construction and energy.
