MoC seeks trade agreement with South American countries

Daily Times (Pakistan) | Sunday, August 05, 2012

MoC seeks trade agreement with South American countries

Staff Report

ISLAMABAD: The Ministry of Commerce is negotiating trading arrangements with Mercosur countries like Brazil, Argentina, Paraguay, Uruguay, Venezuela and Andean Community (CAN) a trade bloc comprising the South American countries of Bolivia, Colombia, Ecuador and Peru to increase it’s trade market access.

According to details submitted to the parliament, the Ministry of Commerce has been mandated to promote Pakistan’s trade with other countries and to ensure optimum market access opportunities for Pakistan’s core export products in global markets. Pakistan has been traditionally trading with North America, European Union and Middle Eastern countries.

However, a shift has taken place in the identification of new market other than our traditional markets. Our exports since 2007-08 have not only increased to our traditional markets but have also shown substantial increase in the regions of Central America by 12 percent, South America 25 percent, Eastern Europe (excluding EU) 89 percent, Africa 41 percent, ECO 89 percent, SAARC 98 percent, ASEAN 67 percent and Oceania 17 percent.

In this regard a few steps have been taken during the last four years to explore new markets.

Free Trade Agreement (FTA) with Malaysia was signed on November 8, 2007 that became operational from January 1, 2008. This FTA is the first bilateral FTA between the two Muslim countries or members of Organisation of Islamic Conference (OIC). This agreement is also Pakistan’s first comprehensive FTA covering trade in goods as well as services, investment and economic cooperation. It is also Malaysia’s first bilateral FTA with any South Asian country.

The investment chapter of Pak-China FTA was renegotiated and the protocol was signed on October 15, 2008. This provides for establishment of China-specific industrial zones in the country and the products manufactured in these zones will get duty free market access in China.

The agreement on trade in services between Pakistan and China was signed on February 21, 2009. The agreement became operational from October 10, 2009.

The second Joint Trade Committee (JTC) meeting between Pakistan and Australia was held in February 2010 in Islamabad. One of the major achievements of this meeting was the Import Risk Analysis of our mangoes by Australia. As a result, Australia agreed to allow export of mango from Pakistan to Australia.

Negotiations for the second phase of Pak-China FTA have been commenced. The first meeting was held on March 10-11, 2011 in Islamabad. The next meeting of the second phase of negotiations will be held at a mutually convenient date.

The inaugural session of the Pakistan - Vietnam Joint Trade Commission (JTC) was held on July 28-29, 2011 in Hanoi, Vietnam. During the meeting, both sides agreed to strengthen business-to-business cooperation and improve trade logistics between the two countries.

Pakistan and Indonesia concluded a Preferential Trade Agreement (PTA) in September 2011. The agreement has been signed by both countries on February 3, 2012. Pakistan is also a member of PTA among the D-8 Muslim countries comprising Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, and Turkey. The cabinet in its meeting held on December 8, 2011 approved the ratification of the agreement.

Some proposals are under consideration to explore such markets in Africa, South America and Asia Countries. Trade Preferential System of Organisation of Islamic Conference (TPS-OIC) has been signed and operationalised among OIC member states during 2011.

Pakistan being a member of OIC signed the agreement of rules of origin in September 2008 and the same was ratified by the cabinet on December 2, 2011.

Pak-GCC FTA: Pakistan is negotiating a FTA with GCC and two rounds of negotiations have been held already.

Pakistan-Jordan FTA: The Ministry of Commerce is also pursuing an FTA with Jordan.

Africa: Currently Pakistan and Mauritius have an operational PTA leading towards a FTA. Since 2008 three meetings have been held to convert this PTA into an FTA.

The Ministry of Commerce is also pursuing PTA with Tunisia, South African Customs Union and East African Community.

South America: MoU on Promotion of Trade between Pakistan and Chile is in progress.

Pakistan obtained ‘observer’ status in ALADI in March 2011, which is an intergovernmental organisation with a goal of the establishment of a Latin-American common market.

During the year 2006, Pakistan signed a Framework Agreement with the Mercosur countries paving way for an FTA. Pakistan is negotiating with Mercosur block to sign a PTA.

The Ministry of Commerce is exploring the possibility of making some arrangements with the CAN, which is a trade bloc comprising the South American countries of Bolivia, Colombia, Ecuador and Peru.

Pakistan and Argentina have a Joint Trade Committee, two meetings of the committee were held to discuss matters of common interest of both countries, 2nd Joint Trade Committee meeting was held in Buenos Aires, Argentina on August 4-5, 2009.

The approval process for export of mangoes from Pakistan to Japan is in the final stage and it is expected that the first export consignment to Japan will be dispatched from the next season.

Pakistan and India are in the process of normalising bilateral trade relations by removal of non-tariff barriers and by building the confidence level of our exporters.

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source: Daily Times