Pak-Sri Lanka FTA to bring two SAARC nations closer
KARACHI. 21 February 2005: Pakistan signed up its first Free Trade Agreement (FTA) with Sri Lanka. President Chandrika Bandaranaike Kumaratunga and Prime Minister Shaukat Aziz signed the agreement in Islamabad recently.
The FTA would bring the two SAARC nations even closer.
Significance of the historic occasion was not lost on the business communities in Sri Lanka and Pakistan. A couple of hours after the signing of FTA, President Kumaratunga addressed the businessmen.
Talking about the FTA, she said that the two nations could now take their economic relations to a higher plane, opening up new vistas in trade and investment. She said that the FTA, which would a ‘create a win-win situation’ for Pakistan and Sri Lanka, was finalised after Premier Aziz’s visit to Colombo. The PM directed the officials to finalise all annexes concerned. She said that the business community could benefit from the FTA, as it removed trade barriers and provided a legal framework for them to conduct and expand their business.
She said that her country would immediately give a duty free access to 102 tariff lines, which would be reciprocated by Islamabad with a duty free access to 206 tariff lines. The elimination of customs duty would cover 69% of actually traded goods between the two countries.
She said that the FTA’s immediate benefit to Sri Lanka was that it would be able to enjoy duty free benefits on its exports, including natural rubber, almost all coconut products, spices, natural graphite, paper and paper products, copper and aluminum products and so on, to the Pakistani market. She said that Pakistan had granted tariff rate quotas for 10,000 metric tonnes of tea per annum at zero rate of duty and 1200 metric tonnes of betel leaves per annum at a preferential 35% margin. Sri Lanka granted TRQs for 6,000 metric tonnes of Basmati rice and 1,000 metric tones of potatoes per annum to Pakistan on a duty free basis.
The Sri Lankan President ended her speech saying that she found Sri Lanka-Pakistan economic co-operation performance a surprising under achievement, given close bilateral ties between the two countries.
The FTA should therefore serve as a launching pad for an era of vibrant business activity between the two economies, building upon the solid bilateral, historic, and political relations.
Earlier, Majyd Aziz, the Founder Chairman of Pakistan Sri Lanka Business Forum and a prominent industrialist, while speaking on behalf of the business community, said that Sri Lankan President’s visit was a harbinger of dynamic relationship between the two business communities. Paying tributes to the Sri Lankan president, he praised the Sri Lankan government for its consistency and transparency in economic policies and its endeavor towards peace and tranquility in the region.”
Majyd Aziz said that the FTA between Sri Lanka and India had seen a 400% trade growth within four years. He hoped that the Pak-Sri Lanka FTA would emulate the Indo-Lanka FTA achievements. He requested the Sri Lankan President to start Sri Lankan flights on Lahore-Colombo route and allow Pakistani private airlines to cater to the needs of Karachi-Colombo sector.
He said that many entrepreneurs in Pakistan were interested in setting up flour mills, pharmaceutical units, software houses, mega construction development projects, shipping and cargo handling endeavors, and trading houses in Sri Lanka.
He requested Pakistan’s Foreign Ministry to include Sri Lankan nationals in the list of Category ‘A’ countries, who would stand eligible for visas on arrival.
Mr Deva Rodrigo, the Chairman of The Ceylon Chamber of Commerce, and General Srilal Weerasooriya, the Sri Lankan High Commissioner to Pakistan, also addressed the distinguished gathering. The president answered questions from businessmen, such as top garment exporter Rashid Soorty, Chairman of Tabani Group, Yakub Tabani, Sohail Afzal of FPCCI, and others. She later posed for group photos with the businessmen, including Aziz Memon, Farukh Mazhar, and Honourary Consuls of Sri Lanka, SM Obaid and Pervez Hanif.
After her arrival at the venue, the Pakistan Sri Lanka Business Forum and The Sri Lanka-Pakistan Business Council of The Ceylon Chamber of Commerce signed a historic Memorandum of Understanding, witnessed by the Sri Lankan President, Sri Lankan Foreign Minister Laxman Kadirgamar, Pakistani Federal Minister Liaquat Ali Jatoi, and businessmen from the two countries. Abdul Rauf Tabani, the PSLBF’s President and Vice Chairman of Aero Asia, and Deva Rodrigo, the President of CCC, signed the MoU.