|
|
|
  |
| Sunday, 22 May 2005 |
 |
|
 |
Business |  |
| News Business Features Editorial
|
Pakistan's High Commissioner expounds FTA benefits With the Free Trade Agreement (FTA) between Sri Lanka and Pakistan expected to be operational by mid next month, Pakistan High Commissioner for Sri Lanka Bashir Wali Mohmand spoke to Sunday Observer staffer Rashomi Silva on the first FTA his country has signed with a foreign country and on the benefits it would bring to the two neighbouring nations. Can you tell us how the FTA between Pakistan and Sri Lanka first came about? The FTA was initially agreed during President Pervez Musharraf's visit in 2002. During the last three years there were discussions on how to proceed with that and on the modalities. There were certain minor irritants since both countries are agriculture oriented they wanted to protect the agriculture of their country, but all in all, the discussions were in a cordial environment and in November last year our Prime Minister Shaukat Aziz too made his presence in Sri Lanka. It was this visit which gave political importance to the FTA at the highest level. He had discussions with President Chandrika Bandaranaike Kumaratunga and Prime Minister Mahinda Rajapakse and as a result of that we worked out the treaty. Then it was rectified to meet the constitutional requirements and was approved by the Cabinets of both countries. The treaty was signed when President Kumaratunga was in Pakistan. Our Trade and Commerce Minister Humayum Akhtar Khan was in Colombo last week. He came for a meeting of the Joint Economic Commission (JEC) where certain economic issues were discussed. These meetings normally take place between two neighbouring countries but unfortunately during the last couple of years the meetings were postponed due to various reasons. During last week's meeting the papers of the FTA were exchanged. Exactly 30 days after the meeting of JEC on June 12, we agreed to make the FTA operational. Sri Lanka is the first country to sign an FTA with Pakistan. Why has Pakistan decided to sign its first FTA with Sri Lanka? We have enjoyed an excellent relationship with Sri Lanka for decades and we thought it was high time that we should promote our political relations into stronger economic ties so that both countries would benefit from it. The trust we had in each other made the task easy. We have been discussing the FTAs with several other countries such as Malaysia, Bangladesh and Thailand. How do you evaluate this treaty and how would the two countries benefit by it? Whenever you sign such treaties normally both sides play a game that it should be a win-win game. But I would say in the case of this particular FTA it is more favourable to Sri Lanka. I can well quote that Pakistan will grant duty free access to 206 tariff lines from Sri Lanka whilst Sri Lanka will grant only 102 tariff lines from Pakistan. Then these tariff lines will be clear from other items that exceed 4,000. Again, in the case of Pakistan we have given only three years. In three years all Sri Lanka's 4,000 items will be able to find their way to Pakistan. On the other hand Sri Lanka will take five years to clear that number. We wanted Sri Lanka to have more free access to our market. You wanted to send your tea. We are already getting tea from Kenya and that tea has duties on it. Sri Lanka will be able to export 10,000 Mt of tea per annum. Then Sri Lankan tea will be cheaper than Kenyan tea and subsequently there will be a greater demand and Sri Lanka will have a very big market there. 10,000MT is quite a substantial amount. Similarly betel leaves are already sold in Karachchi but now there will be a concession on this too. I initially said both were trying to protect each country's agriculture. For example we produce Basmati rice in excess in Pakistan but here people were slightly reluctant to grant concessions since you have your own crops, though the Basmati rice that we produce is not consumed in high quantity. The Sri Lankan government agreed to grant concessions for 10,000 T of rice per annum but only for Basmati and not for those which are grown here. This will be only during the period when your own crops are in short supply. Your rubber, cocoa and spices will have access to Pakistan and in the same manner our fruits which are world famous for their high quality and taste will access in your market. Despite the excellent relations between the two countries Pakistan's share of imports is less than two percent in Sri Lanka's import market. What is the reason? Probably because Sri Lanka being a small country, our investors were not concentrating much on the market here. Similarly Sri Lankan traders too having limited interaction with their Pakistani counterparts are not aware of Pakistan's export potential. A well thought out strategy and concerted efforts by all stakeholders would be required to make further inroads into the Sri Lankan market and we hope the single country trade exhibition that was held last month would pave the way for more business interaction between the two countries. It has already helped our business community to realise that they have a very friendly market and a big market where the people have the desire to buy and go for Pakistani products. I'm sure the existing trade volume which is about US$140 million will be doubled hopefully before the end of this year. An upward trend could be seen already. During the last four months the volume has reached the US$ 44 million mark. We feel that it is because we were about to sign the FTA and there were talks about the single country exhibition. With over 300 items moving both ways, the volume between the two countries will increase. How successful was the single country exhibition? It was a mega success and beyond our expectations. This is what our business community who took part in the exhibition said. We at the High Commission, our Trade and Commerce Ministry and the Export Development Authorities in Pakistan received letters of thanks from the business community for giving them this opportunity. Representatives from 30 companies came here and we were told that they have established contacts with their Sri Lankan counterparts and are already engaged in interaction with each other. How many of your investors are operating in Sri Lanka at present? At present there may be between 30 or 40. But I suppose that this figure would double very soon. For example when one investor dealing with yarn comes here he would tell his colleagues who are dealing with garments, cartoons and the like that they have very good investment opportunities in Sri Lanka and by word of mouth news would spread soon in the business community. We can exchange expertise. We are the fourth largest cartoon producer in the world and you have expertise in the garment industry. Sri Lanka is hoping to contest the post of UN Secretary General. What is Pakistan's stand on this? We have not decided on this issue as yet. I think it is too early. But we
have already told the Sri Lanka government we'll give it serious thought as
far as their candidate is concerned. We further believe this time it should
be from this part of the world. We feel it should be on consensus as to who
will be the best and which area he should come from. |
|
| News | Business | Features
| Editorial | Security
| Produced by Lake House |
