The Minister of Commerce and Consumer Affairs Ravi Karunanayake said the anticipated Sri Lanka-Pakistan Free Trade Agreement (FTA) would be signed in January 2003.
Ashraf Qureshi the Pakistani High Commissioner in Sri Lanka said, the political changes in Pakistan caused some delay in signing of this agreement. Pakistan's Commerce Minister is expected in Colombo next month and Pakistan is eager to enter into a FTA with Sri Lanka, he added.
Former Pakistani Commerce Minister, Abdul Razak Dawood visited Sri Lanka for early bilateral trade talks consequent to Pakistani President Pervez Mushraff's visit some time ago when the two countries signed the framework agreement in Colombo.
The Agreement includes:
- Free movement of goods between the two countries through the elimination of tariffs, subject to a few exceptions.
The structure of phasing out the existing tariffs on the part of the two countries.
Rules of Origin criteria for establishment of a Joint Committee at Ministerial level to review the progress of implementation.
Annexes to the Agreement will specify the structure of phasing out the existing tariffs on the part of both Sri Lanka and Pakistan and stipulate the Rules of Origin criteria for the purpose of granting concessions.
A dispute settlement mechanism through mutual consultations and recourse to arbitration.
Pakistan is Sri Lanka's second largest trading partner in the SAARC region. The Sri Lankan Government expects the FTA would help Sri Lanka increase exports to Pakistan reducing the existing trade deficit between the two countries.
The value of total trade between the two countries stood at SL Rs. 8781 million in 2001. In 2001 Sri Lanka's imports from Pakistan was SL Rs.
6,596.5 million. Exports to Pakistan were at SL Rs. 2,184.6 million, making a trade deficit of Rs. 4,411.9 million.
The two countries also agreed on appointing a Joint Committee at Ministerial level to review the implementation of the FTA. The business community stressed the need for the resumption of direct flights between the two countries to reach the full trade potential of such an Agreement.