Pakistani Commerce Minister Engr. Khuram Dastgir Khan (left side, third from left) leads the Pakistani team (seated at left) while Minister of Industry and Commerce Rishad Bathiudeen (third from right-right side) makes his opening remarks leading the Lankan team at the bilateral trade talks session
“The forthcoming change to historic Pakistan-Sri Lanka Free Trade Agreement (PSFTA) is a new phase in our bilateral economic engagement. It deepens our economic and trade relationship creating this new phase in our engagement,” said Minister of Commerce of Pakistan Engr. Khuram Dastgir addressing the bilateral trade meeting between Sri Lanka and Pakistan held in Colombo on Wednesday.
“We offer to Sri Lanka our confluence of being able to give access to South Asia, Central Asia and West Asia while Sri Lanka opens the East Asian trade doors for Pakistan. That’s the broader foundation of this relationship! We need to give administrative solutions for short term trade issues and also longer term agreements formalising our short term understanding.”
Minister Khan said, “Many sensitivities can arise but we need to realise that this is a relationship for long term, particularly in terms of new challenges that have arisen in the form of mega regional trade agreements such as the recent Trans Pacific Partnership (TPP). We need to understand that we cannot wait for too long to deepen our bilateral engagement, otherwise our markets will be taken by competitors. We have to conclude our bilateral arrangements and then go for joint ventures in both countries so that we start exporting to third countries-in that we both join together in both value chains and supply chains to export to third countries.”
Joining Minister Khan at this in-depth trade session were Maj General Syed Shakeel Hussain (High Commissioner of Pakistan to Colombo), Dr. Sarfraz Ahmed Khan Sipra (Deputy High Commissioner of Pakistan in Sri Lanka), Pakistani Commerce officials and several Pakistani business delegates accompanying Minister Khan. Sri Lankan side lead by Industry and Commerce Minister Rishad Bathiudeen.
“The forthcoming change to historic PSFTA is a new phase in our bilateral economic engagement. It deepens our economic and trade relationship creating this new phase in our engagement. A wider range of items under FTA to be offered duty free,” Khan noted.
At present, more than 4000 product lines from Sri Lanka have duty free access to Pakistani market under the Pakistan Sri Lanka FTA. This number of product lines is expected to expand as per Pakistani Minister Khan’s announcement on 11 November.
The value of total Lanka-Pakistan bilateral trade that stood at US$ 97 million in 2001 increased to peak levels by 2013 to US$ 462 million and in 2014 levelled at US$ 354 million. Since the start of the FTA, Sri Lanka-Pakistan overall trade has surged by four times, exports to Pakistan have increased by three-fold while imports from Pakistan have grown by four-fold. Pakistan is now the second largest export destination for Sri Lanka in South Asia accounting for 10 percent of Sri Lanka’s exports to South Asia. Sri Lanka’s exports to Pakistan totalled US$ 74.25 million in 2014 while imports from Pakistan stood at US$ 279.59 million in the same year. Despite steady growth-except in 2014, the Balance of Trade remains mostly in favour of Pakistan.