Turkish Prime Minister Ahmet Davutoglu has reportedly played a key role in proposed Free Trade Agreement (FTA) with Pakistan expected to be signed by the end of current year, well-informed sources told Business Recorder. In 2011, Turkey had imposed extraordinary duty on Pakistani textile products due to which Pakistan's exports nose-dived from $900 million to $400 million which sent shock waves across exporters' community.
Turkey had increased duty on fabrics from 6 percent to 18 percent and on garments from 9 percent to 20 percent. Pakistan raised the issue on different occasions and in 2013 and 2014 the incumbent Commerce Minister Engineer Charm Dastgir requested the Turkish authorities to reduce duty on Pakistani textile products. However, the Turkish authorities were not ready to slash duty by more than five percent.
According to sources, Pakistan argued that five percent reduction in duty will not serve its purpose. On the other hand, Turkey argued that it was very difficult for it to sign an FTA with Pakistan due to customs union with the European Union (EU). "The Turkish authorities clearly conveyed that the duty is neither Pakistan specific nor can be removed. If Pakistan wants the duty be slashed both countries should sign a PTA," the sources maintained.
In October 2014, Joint Economic Commission (JEC) which met in Turkey discussed the issue of trade and Pakistan requested that an FTA be signed between the two countries to promote trade. However, Turkish Commerce Minister offered Preferential Trade Agreement (PTA) which Islamabad refused to sign, the sources maintained. When the issue of extraordinary duty on Pakistan textile products was not resolved at the JEC level, Commerce Minister Khurram Dastgir Khan raised the matter with the Turkish Prime Minister proposing an FTA despite the fact that it was not included in the talking points, the sources added.
When contacted, the commerce minister confirmed that he suggested FTA between Pakistan and Turkey which is now going to be signed in a few months time. A slight decrease in bilateral volume was noted which the two sides want to increase to $3 billion in the next two years and up to $10 billion in coming years.
"During meeting with Turkish Prime Minister in October last year, I pressed on wider and deeper trade relations beyond textile. Turkish Prime Minister replied positively," Dastgir added. In reply to a question, the commerce minister said, he wrote a letter to his Turkish counterpart refusing to sign PTA. He further revealed that during talks in Islamabad, commerce ministers of both countries expressed agreement to sign FTA within two years but Prime Ministers pressed that it should be concluded in 2015.