COLOMBO: CEO Trade Development Authority of Pakistan (TDAP) S. M. Muneer said Pakistan and Sri Lanka have the potential to increase bilateral trade over six times from the current $ 247 million to $ 2.7 billion by just effectively utilizing their Free Trade Agreement (FTA).
According to details, Pakistan and Sri Lanka signed a Free Trade Agreement in July 2002 and it became operational in June 2005. The terms of the FTA were comprehensive and granted 100% immediate concession to major Pakistani exports such as cotton and cement and major Sri Lankan exports such as rubber and coconut products.
By 2010 both countries were required to have removed tariffs on all items barring those listed in their respective no-concession lists or those facing Tariff Rate Quotas (TRQ). Given these facts, I would say that at present there is still a tremendous amount of untapped potential available for companies and entrepreneurs from both nations.
After signing of FTA between Pakistan and Sri Lanka, Pakistan’s exports to Sri Lanka grew from USD 154 million in 2004 to USD 316 million in 2013. However Pakistan could only claim 1.7% of total Sri Lankan imports from the world in 2013, he noted.
Sri Lanka’s exports to Pakistan grew from USD 46 million to USD 63 million between 2004 and 2013, and Sri Lanka claimed only 0.14% of total Pakistani imports from the world in 2013. More recently our exports have decreased to US$ 247.145 million in 2015-16 while import from Sri Lanka increased to US$ 74.59 as compared to 57.801 million in 2014-15.
“There are certainly encouraging signs that these engagements are gaining greater momentum however, given the remarkable synergies that we see between our two nations, we remain convinced that we have barely scratched the surface in terms of our bilateral trade relationships, particularly given the FTA.”
Top Sri Lankan exports to Pakistan include vegetable products, rubber, fibreboard and coconut products while we have been able to build a small but vibrant set of exports based primarily around cotton products, cement, refined sugar and potatoes.