logo logo

Pak-Malaysia to sign FTA within two months: Humayun

Associated Press of Pakistan

Pak-Malaysia to sign FTA within two months: Humayun

30 May 2007

ISLAMABAD, May 30 (APP): Minister for Commerce, Humayun Akhtar Khan said on Wednesday said that Pakistan -Malaysia have concluded negotiations on a bilateral Free Trade Agreement (FTA) and it will be signed within next two - month for improving trade and investment between them. "The initiative includes trade in goods, trade in services , investment and Economic cooperation", he told a press conference here at a local hotel today.

The Commerce Minister said that the landmark agreement is the first between two OIC member countries and will serve as a precedent for many future such agreement between Muslim countries.

About his recent visit to European countries and outcome of the negotiations with EU, he said that European Countries and Pakistan have agreed that the trade preference policies of the EU in South Asia especially those policies for Least Developing Countries which provides zero tariff access to EU from these countries.

He said that in South Asia these four LDCs are:Bangladesh, Bhutan, Nepal and Maldives and these countries have zero rated tariff access to the EU.

Humayun Akhtar Khan said that Pakistan and EU have exchanged views on further strengthening of trade relations and looked at options for future consideration agreed that the Sub Group on Trade will monitor the impact of EU’s trade policies in the region on Pakistan’s preferential access to EU markets and will identify possible options for improvement in bilateral trade.

He added that both the parties also agreed that the sub group on trade should meet in Autumn 2007 with a view to initiating a study in consultation with Pakistan on the impact of these trade policies.

Minister for Commerce Humayun Akhtar Khan said negotiations on a bilateral Malaysia-Pakistan close economic partnership agreement, which is a comprehensive Free Trade Agreement, successfully concluded at Kuala Lumpur on May 24, 2007.

He added that the initiatives include trade in goods; trade in services; investment and economic cooperation.

He said that Malaysia is an important Member Country of ASEAN and this Agreement will provide Pakistan a firm foothold in the vibrant and growing economies of East Asia.

The Minister said Malaysia and Indonesia are the two main sources of palm oil imports adding said that the signing of FTA with Malaysia would encourage Indonesia to sign an FTA or PTA with Pakistan.

He expressed the hope that it will help Pakistan to be a full Dialogue Partner of ASEAN and pave the way for a regional Agreement with ten countries of ASEAN.

The Minister said that ASEAN and China have already concluded an FTA on Trade in Goods and Trade in Services on 10 + 1 basis.

The ASEAN Member Countries are in the process of reducing/eliminating tariff for imports from China to ASEAN countries including Malaysia, he remarked.

The Minister said that the exports of Pakistan, already facing tariff barriers in Malaysia (due to ASEAN Free Trade Agreement (AFTA) would have been even more adversely affected by 2012, when tariff is scheduled to be eliminated on imports of textiles from China by Malaysia.

He said that Pakistan has been able to create a level playing field for our exports to this region.

The preferential/tariff free regime with China has already been established through Pakistan-China FTA recently signed at Islamabad, he remarked.

He said this is an un-precedented success of our trade diplomacy efforts.

For Trade in Goods the package with Malaysia was successfuly negotiated to achieve the twin objectives of liberalizing our trade regime while giving due protection to the local industry.

Humayun Alhtar Khan said that Pakistan has undertaken to eliminate/reduce tariff mostly on raw materials and Malaysia shall provide market access on our textiles; bed linen, other home textiles; kinno, and prepared food etc.

The manufacturing sectors of Pakistan will now be able to source raw materials and inter-mediatory goods from China as well as from Malaysia at preferential/zero duty.

"This will address the issue of trade diversion and help in global competitiveness of our exports", he added.

In the realm of Trade in Services,he said Malaysia has provided market access on various sectors including Islamic Banking and Takaful.

These concessions have not been extended by Malaysia to any other country.

He said limit of aggregated foreign equity participation in existing Malaysian domestic Islamic financial institutions has been increased from 30% to 49% .

"This facilitation will also qualify Pakistani financial institutions to conduct the full range of Takaful business in international currencies without any limitation etc", he remarked.

The initiative relating to investment will help to secure FDI from Malaysia, he added.

The Minister said that the constitutional and procedural requirements are likely to be completed by both countries a within to months and thereafter the Agreement will be signed.

The date and time of the event will be settled through diplomatic channels. After signing of the Agreement the package will be made public.