Aug 12, Colombo: Pakistan benefited more from its free trade agreement (FTA) with Sri Lanka, a study conducted by Pakistan Institute of Trade and Development (PITAD) has revealed.
According to a report by PITAD titled 'Evaluation of Trade Agreements: A case study of Pakistan Sri Lanka FTA', Pakistan's exports to Sri Lanka rose by 41 percent to $216 million in 2009 while imports from the country fell by 5.7 percent to $55.79 million.
The FTA signed on August 1, 2002, came into force on June 12, 2005 with the objective of enhancing bilateral trade between the two countries.
Pakistan is the second largest trading partner of Sri Lanka within the South Asian region. The bilateral trade between the two countries had sharply increased since the signing of the FTA. Trade between the two countries has increased from US$ 150 million to over US$ 300 million during last three years.
The reports says main products that benefited from the preferences granted under the FTA between the two countries between 2005 and 2009 included Basmati rice, potato and cement.
Basmati rice exports grew from just $4.6 million in 2005 to $21.5 million in 2009 while potato exports increased from $1.6 million to $15 million during the same period.
In 2009, Pakistan exported cement worth $11.7 million. It did not export cement to Sri Lanka in 2005.
Minor products such as cumin seeds, tubes and pipes also grew in the four-year period.
During the period studied exports of woven cotton fabrics to Sri Lanka rose from $17.2 million to $34.6 million, while knitted fabrics from $1 million to $8.4 million and denim from $1.8 million to $8 million.
However, exports of mandarin oranges, onion, chilies and certain fish products declined despite receiving significant preferences under the FTA, the study said.
Export of non-traditional products like pharmaceuticals also rose, taking advantage of zero tariff rates in Sri Lanka with $6.5 million worth of medicines being exported in 2009 as compared to zero exports in 2005.
The top imports from Sri Lanka to Pakistan included rubber and latex. Rubber imports rose from $6.3 million in 2005 to $10.8 million in 2009 while Latex imports rose from $1.03 million to $3.87 million.