Pakistan and European Free Trade Association (Efta) are likely to sign trade pact on Monday (today) in Geneva, Switzerland, boosting domestic exports, officials told Business Recorder. Efta is a free trade area comprising Switzerland, Norway, Iceland and Liechtenstein, and is a huge potential market for Pakistani goods.
The pact will be signed by senior Commerce Minister Makhdoom Amin Fahim and the Commerce Ministers of Efta member states.
The Cabinet approved in principle entering into negotiations with Efta member states on April 7, 2007. In a meeting of trade officials between Pakistan and Efta members states in April 2012, in Switzerland both sides decided to enhance co-operation for boosting trade between Pakistan and Efta member states by exploring the possibility of a Free Trade Agreement (FTA) between the two sides, the sources added.
"Efta is negotiating FTAs with GCC and other countries including India. The MoU will be the first step to begin talks with Efta to negotiate proposals for market access on goods and services as well as investment. Besides this will be Pakistan's first engagement with developed countries to initiate ambitious bilateral talks," said Pakistan ambassador to WTO, Shahid Bashir.
The sources said, Efta secretariat forwarded a draft joint declaration on co-operation between Pakistan and Efta members states to Islamabad through diplomatic channels for approval. The declaration envisages setting up of Joint Trade Committee (JTC) comprising trade officials of the two sides to meet regularly to undertake steps for enhancing co-operation for strengthening trade ties.
Both the sides will also explore the possibility of concluding an FTA to remove trade barriers and encourage communities to forge trading ties. According to sources the text of the Joint Declaration on co-operation has been shared with the stake holders while Law and Justice Division vetted the text, and recommended that the words Joint Declaration should be replaced with Memorandum of Understanding (MoU).
The Commerce Ministry had argued that this is rather an inconsequential change and might delay the process, as this may have to be agreed by the four members states of Efta. The Commerce Ministry later persuaded the Law Ministry that there was no harm in using 'Joint Declaration'.
The sources said, Federal Cabinet, in its meeting on October 31 this year discussed the proposal in detail and decided that the matter should be referred to the Ministry of Law and Justice for clarification for their views which recommended that the words 'Joint Declaration' be replaced by 'Memorandum of Understanding' and resubmit the case to the cabinet. Giving background, the sources said, that Switzerland had advised Pakistan to approach Efta secretariat in Geneva with the proposal for FTA, and assured Pakistan of its support. Initially the proposal had been discussed between the then Prime Minister Shaukat Aziz and Swiss President in Davos on January 27, 2007 where in the two leaders agreed on the need to initiate FTA negotiations. Norway, another member of Efta, had also advised Pakistan to take up FTA proposal with Efta.
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