Talks with Efta for signing FTA soon
ISLAMABAD (April 15 2007): Pakistan will start negotiations with the European Free Trade Association (Efta) for signing Free Trade Agreement (FTA), which the Commerce Ministry hopes will boost Pakistan’s exports. Efta is a free trade area comprising Switzerland, Norway, Iceland and Liechtenstein, and is a huge potential market for Pakistani goods.
Official sources told Business Recorder that Switzerland has advised Pakistan to approach Efta secretariat in Geneva with the proposal for FTA, and assured Pakistan of its support. Sources said that Commerce Secretary Asif Ali Shah had briefed the Cabinet in its last meeting about the on-going negotiations for working out FTAs with Malaysia, Singapore, Indonesia, Iceland, Russia, Gulf Co-operation Council and Bangladesh.
They said that the latest initiative aims at negotiating FTAs with non-European Union member countries, like Norway, Switzerland, Bosnia, Serbia, Croatia, Montenegro, Belarus and Ukraine. According to sources, the FTA issue was discussed at a meeting between Prime Minister Shaukat Aziz and Swiss President in Davos on January 27 wherein the two leaders agreed on the need to initiate FTA negotiations.
Norway, another member of Efta, has also advised Pakistan to take up FTA proposal with Efta, sources added. The global exports of Efta are estimated at $230.85 billion and imports amount to $180.36 billion, which cover goods, services, investment and intellectual property rights, they said.
Pakistan’s exports to Efta countries in 2005-06 were $98.45 million while imports were $483 million, which shows that trade balance of $384.55 million is in favour of these countries. Switzerland is the largest trading partner of Pakistan within Efta and total Pak-Swiss trade in 2005-06 was $508.19 million.
Pakistan’s exports to Switzerland were worth $36.55 million while imports from Switzerland were $471.63 million. The main reason for Pakistan’s trade deficit with Switzerland was import of machinery which valued $223 million.
Sources said that the Planning Commission, in its export strategy, has also recommended that the government should focus on finding new markets, new products, and produce goods at competitive prices. The PC is also of the view that potential of economic diplomacy should also be exploited besides taking advantage of the FTA signed with China.