Commerce Ministry is to ink a pact with Australia on strengthening bilateral trade and economic ties, which would serve as a confidence-building measure (CBM) between the business communities and investment enhancement, official sources told Business Recorder.
Pakistan-Australia bilateral trade is in favour of Australia with Pakistan's imports averaging $350 million against exports of $150 million during last three years. There is an immense potential for Pakistan to enhance exports to Australia and increase its share in Australia's global imports of US $192 billion.
Pakistan and Australia signed a bilateral trade agreement in 1990. Under the provisions of the Agreement, a Joint Trade Committee (JTC) was created. The JTC plays an important role in promoting aims and objectives of the agreement. It also considers proposals for deepening and broadening trade and economic relations and is headed by senior officials from respective trade ministries of both countries. The second meeting of JTC was held on February 16, 2010 in Islamabad after a lapse of four years. In the meeting, various avenues to enhance bilateral trade and investments were discussed. Both countries recognised the need to update the existing trade agreement to reflect contemporary priorities. The Australian side indicated its difficulty in completing the required legal and constitutional formalities for updating the existing trade agreement.
It was agreed that instead of renegotiating the existing agreement, the two countries would enter into a Memorandum of Understanding (MoU) which would provide a mechanism to discuss, strengthen, and resolve trade and investment issues. The proposed MoU will be helpful in encouraging Australian investment in Pakistan and will further cement bilateral trade and investment relations.