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Pakistan to hold talks with Sri Lanka over FTA

Sunday, September 25, 2005

Pakistan to hold talks with Sri Lanka over FTA

Wants changes in FTA fearing more import from India

By Khalid Mustafa

ISLAMABAD: In a new development, Pakistan is going to hold secret talks to make some changes in the existing Free Trade Agreement (FTA) with Sri Lanka on September 28-29 in Colombo which has already been operational since June 2005.

Pakistan fears that under existing FTA Indian products can enter Pakistan’s market through Sri Lanka particularly India automobile parts, Daily Times has learnt.

“The commerce ministry had earlier extended some concessions to Sri Lanka under operational FTA on the import of spare parts of automobiles under the clause of margin of performances.

Likewise, Pakistan also allowed the import of PVC raisin from Sri Lanka under the existing FTA. Now the government has decided to take back the said concession under the clause of margin of performances from Sri Lanka.,” a government official told Daily Times.

The official said that since the Ministry of Commerce did not take the concerned stakeholders on board while deciding the concession items’ list with Sri Lanka. Now the stakeholders particularly the automobile sector had feared Sri Lanka will export the Indian automobile parts in Pakistan, as Sri Lanka has FTA with India also.

This will hurt Pakistan’s automobile sector which is highly protected in Pakistan. Joint secretary Shahid Bashir, who was earlier head of the negotiating team during the process of finalizing existing FTA with Sri Lanka, will again negotiate for amending the FTA on September 28-29 in Colombo.

Since this was the first-ever FTA that Pakistan has inked so there can be made some mistakes. However, the official said that Pakistan hopes that Sri Lanka would agree during the two-day talks to amend FTA as per the wishes of Pakistan’s stakeholders. He said that trade had begun under the FTA since June 2005, but the margin of performance clause is not enforced so far.

He said the trade under the primary items’ concession list was under way. However, automobile parts and PVC raisin are included in late items’ concession list, under which the trade of the said items has not kicked off so far.

He said that when the stakeholders in the automobile sector was provided with the FTA copy, they moved the government saying the negotiating team headed by Shahid Bashir had made blunders in extending the concession to Sri Lanka of automobile parts as it would hurt Pakistan’s local industry. Pakistan fears that Sri Lanka will export Indian automobile parts after some value addition to Pakistan and it will inflict huge injury to the local industry.

 source: Daily Times