Pakistan has initiated a series of preferential trade negotiations with different countries. Iran will soon offer tariff concessions on 309 items to Pakistan under the Preferential Trade Agreement (PTA) and Pakistan would sign an FTA framework agreement with the Mercosur countries (ie Brazil, Argentina, Paraguay and Uruguay) on July 20.
Moreover, Pakistan is in the process of multilateral negotiations with the Organisation of Islamic Conference (OIC) and Group of Developing Eight countries (D-8).
According to the Trade Policy (2006-07), Pakistan has recently concluded negotiations on a Preferential Trade Agreement (PTA) with Iran. Under the agreement, Iran has agreed to grant tariff concessions on 309 tariff lines, including seafood, fruits, vegetables, rice, marble and granite, textile machinery, wooden furniture, pharmaceuticals, minerals and certain textile items. This agreement is expected to become operational shortly.
"With Singapore and the Gulf Co-operation Council (GCC) countries, we expect to conclude our FTA negotiations by the end of the year. With the Mercosur countries ie Brazil, Argentina, Paraguay and Uruguay, I am scheduled to sign a framework agreement on July 20 in Buenos Aires, Argentina, on the occasion of the Mercosur Summit Meeting, said Commerce Minister Humayun Akhtar Khan.
The trade policy highlights that in recent years, the world trade scene has witnessed a proliferation of preferential trading arrangements, be they in the form of Regional Trading Arrangements (RTAs) Bilateral Free Trade Agreements (FTAs) or unilateral GSP type programmes.
As a consequence, Pakistani exporters were increasingly finding themselves at a disadvantage vis-a-vis their competitors, on account of the preferential access the latter enjoyed in certain markets.
The government has initiated a series of preferential trade negotiations designed to neutralise this disadvantage for Pakistani exporters. While negotiations with a number of countries are at various stages, some of them have either already begun to yield benefits or are on the verge of doing so.
The trade policy also specifies that Pakistan's first FTA is to become fully operational with Sri Lanka, and it has been effective since June 2005. As a result, Pakistani exports such as fruits, vegetables, footwear, engineering products, sanitary goods, chemicals, leather, rice and some textile items enjoy duty concessions in the Sri Lankan market.
Secondly, while negotiations for a full-fledged FTA with China are progressing well; an Early Harvest Program has already become effective since January 2006. As a result, Pakistani exports such as leather articles, some textile items, marble, sports goods, fruits, vegetables and mineral products will have reduced duties and all these items will be exported duty-free by January 2008.
Thirdly, while FTA negotiations with Malaysia are proceeding at a rapid pace, an early harvest program has become effective since January 2006. As a result, Malaysia has allowed export of Pakistani items such as fruits, vegetables, some textile items and jewellery at concessional rates of duty.
These negotiations will conclude by the end of this year. Moreover, the South Asia Free Trade Agreement (Safta) between Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka has been signed and ratified by all Saarc members. It has consequently become operational as of July 1, 2006.
Lastly, the government has initiated talks with several other countries for preferential market access arrangements. Bilateral negotiations in this regard are underway with Mauritius, Morocco, Russia, and Thailand.
Additionally, multilateral negotiations are taking place in the context of the Organisation of Islamic Conference (OIC), and Group of Developing Eight countries (D-8). Further a joint consultative study group for a potential PTA with Association of South East Asian Nations (Asean) has also been agreed.
While in recent years, there has been an intensification in trade diplomacy and preferential trade negotiations, our exporters need to be made more aware of the rapidly emerging new concessional opportunities.
The commerce ministry is taking a number of measures in this regard. These include the organising of informative seminars, dissemination of information through the ministry's website as well as through the print and electronic-media, Humayun Akhtar Khan added.