Pakistan keen to increase imports from Sri Lanka

Colombo, Jul. 8 2002 (INS News) -- The proposed Free Trade Agreement between Sri Lanka and Pakistan will enable Sri Lanka to create a more favourable trade balance in trade between the two countries, visiting Pakistani Minister of Commerce, Industries and Production Abdul Razak Dawood said.

The Minister who is here for bilateral trade talks with Sri Lankan Government said that Pakistan was keen to increase imports from Sri Lanka especially the agricultural products including tea.

"The two countries have maintained excellent political and cultural relationship for many years, but we have not made use of that longstanding relationship to promote trade. The proposed FTA would be the ideal instrument for the two countries to strengthen trade between Sri Lanka and Pakistan," Mr. Razak said in the inaugural meeting held in Colombo yesterday.

Mr. Dawood said while Pakistan is keen to import more agri based products from Sri Lanka, the Sri Lankan market needs to be opened for manufactured products from Pakistan.

Commerce and Consumer Affairs Minister Ravi Karunanayake said proposed FTA with Pakistan could contribute to the Government's national economic development drive.

"The value of total trade between two countries which stood at SL Rs. 3336.4 million in 1990 increased to SL Rs. 8781 million in 2001. Sri Lanka enjoyed a favourable trade balance with Pakistan for several years up to 1984. This position reversed in 1985 and since then Sri Lanka has been experiencing an unfavourable trade balance. In 2001 Sri Lanka's imports from Pakistan amounted to SL Rs. 6,596.5 million while Sri Lanka's exports to Pakistan stood at SL Rs. 2,184.6 million resulting in a trade deficit of Rs. 4,411.9 million," Minister Karunanayake said.

He said the bilateral talks should address the existing trade distortions in the form of tariff and non-tariff barriers.

"During the deliberation of the last technical consultations our officials made a considerable progress towards improving the draft text of the framework agreement forwarded by the Pakistani side. Our target would be to conclude an FTA that could set an example as a model agreement for further strengthening bilateral trade economic relations, Minister Karunanayake said.

He said the early conclusion of the proposed FTA has become significant due to the slow progress achieved under the trade liberalisation program of SAPTA, which falls far short of the two country's expectations.

"Currently the exchange of tariff concessions under the SAPTA proceeds at a slow pace. The margin of preferences have not been sufficient for trade creation in the region. On the other hand the tariff concessions granted under the SAPTA do not include goods that were actually traded or were likely to be traded. This leads to the conclusion that the full trade potential between us is yet to be fully realized," the Minister said., according to the report of Sri Lankan daily.

-- Sam Asharaf - South Asia Correspondent in Trivandrum, India
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