Speakers agrees to increase bilateral trade between Pakistan-Sri Lanka
ISLAMABAD – The speakers during ‘Book Launching’ on Pakistan – Sri Lanka Free Trade Agreement (PSFTA) have agreed that through the proper execution of the agreement both the countries would increase their trade volume from the recent ratio of bilateral trade.
The Federation Pakistan Chamber of Commerce and Industry (FPCCI) has launched the Publication on ‘Pakistan – Sri Lanka Free Trade Agreement (PSFTA)’ to enhance bi-lateral trade and promoting free trade between the two countries, said a statement on Sunday.
The Federation of Pakistan Chambers of Commerce and Industry hosted the publication launching ceremony.
Chairman, Senate Foreign Affairs Committee, Senator Mushahid Hussain Sayed, was the chief guest of the ceremony and addressed the gathering.
In his address, he emphasized that private sector of both countries would play their role to utilize the highlighted trade potential available in each country.
He also draws attention towards potential available in Religious Tourism and exchange in Cultural heritage of the both countries.
He also invited Sri Lanka to take the advantage of China Pakistan Economic Corridor (CPEC) to enhance its outreach to Central Asian states and European countries.
President, FPCCI, Anjum Nisar said that Covid-19 had brought business community much closer through use of new technologies.
He said that unfortunately the political issues in the region were the bottleneck in unleashing the true trade potential.
He said the Pakistan was always very supportive in enhancing the trade with its neighboring countries. President SCCI & CEO Guard grou, Iftikhar Ali Malik, said that Pakistan and Sri Lanka were agrarian countries and should focus on adaptation of modern technologies to enhance their per acre yield.
He also highlighted the role of tourism to enhance to strengthen the cultural bonding between the two countries. Joint Secretary (FT-I), Ministry of Commerce, Nauman Aslam said the government was thinking to review the FTA signed with Sri Lanka with inclusion of services sector and cross border Investments.
He also urged the private sector of the both member countries to increase the export basket to enhance the mutual trade.
High Commissioner of Sri Lanka to Pakistan, Vice Admiral Mohan Wijewickrama said that Covid-19 had increased trade challenges between member countries with decrease in foreign remittances. He added that Pakistan and Sri Lanka had old historic relations and Sri Lanka was the second largest trading Partner of Pakistan in South Asia. He seconded the proposal of earlier panelist regarding addition of more products into export basket of both countries to realize the true potential.
Earlier, VP, SCCI Haji Ghulam Ali extended warm welcome to the participants and Dr. Shafqat Munir, SDPI, gave a brief overview of the study.
Ajith D Perera, SG, FCCISL, Ms Nikita Singla, and Mr. Afaq Hussain, from Delhi based Think Tank BRIEF, also joined the deliberation through video link. Dr Ghulam Samad, from PIDE, also highlighted the shortcoming of FTA. Former President FPCCI, Zubair Ahmed Malik, articulated the entire discussion at the conclusion of the deliberation.
The events was attended by Mr. U.L Niyas Counsellor, Deputy HC, Ms. C. R. Munasinghe, First Secretary, in High Commission of Sri Lanka to Pakistan, Mirza Abdur Rehman, Shoail Hussain Malik,Hameed Akhtar Chadha, Naseem Ur Rehman, Khurram Sayeed Khursheed Barlas, Maryam Chaudhry and many renowned business figures and the government representatives joined the deliberations.
The PSFTA was signed in August 2002 and came into effect in July 2005. The terms of the FTA are comprehensive and grant 100 percent immediate concession to Pakistan’s major exports and Sri Lanka’s major exports products.
As a result of this, the trade volume has doubled from US$ 212 million in 2005 to around US$ 460 million in 2018. However, it was found that a considerable trade potential remained unutilized. The study chalks out the specifics of this potential and suggests ways to remove obstructions to the full realization of trade between the two countries. The study finds out that over US $ 2.7 billion of trade potential exist if both countries fully manage to utilize their FTA.
The study revealed that Pakistan enjoyed an increasing surplus in bilateral trade with Sri Lanka. However, Sri Lanka’s bilateral trade with Pakistan is considerably low. In this context, the study uses the trade complementarity index tool as to see whether Sri Lankan exports meet the import demand of Pakistan and also establish the extent of sectoral match and mismatch between the two countries. The result from the trade indices shows trade profiles of both countries are becoming more compatible as a result of a steady rise in their trade complementarity index during the period 2003-2018.
The study also examines that both countries has provided significant market share to each other and their emerging trade relations possess numerous opportunities and potential to increase the current existing trade.
One of the reason behind the low volume of trade the study reveals that is due to of non-tariff barriers which have overshadowed the impacts of tariff rationalization and thereby has been the major impediment to export performance for both countries.
The study also highlights the potential products that can increase the current trade between both countries. But the current trade share in those potential products is either very less or negligible.
This is because the exporters of both countries are unaware of the potential goods and market benefits that exist in the both countries.
Both Pakistan and Sri Lanka are lucrative investment destinations; Pakistan, on the one hand, is a gateway to the resource-rich Central Asian States while on the other hand, Sri Lanka enjoys duty-free access to EU and Indian markets.
Therefore the study concluded that trade bodies in both countries should facilitate trade delegations and single country exhibitions.
Unhindered communication between the business communities of the two countries will increase bilateral trade since the opportunities exist on paper a channel for exchange of ideas and proposals must be developed to translate the said opportunities into actual trade figure.
Also the strong linkages among the business community of both countries via exhibition and trade delegations will likely boost trade and trade relationship between Pakistan and Sri Lanka.
The research study on Pakistan Sri Lanka Free Trade agreement was developed by SCCI with the support of their regional partner Friedrich Naumann Foundation and officially launched by Federation of Pakistan Chamber of Commerce and Industry (FPCCI).