Feb 01, Colombo: Sri Lanka and Pakistan will work together to identify the factors responsible for slow progress in trade relations between the two countries and address the problems faced by the two business communities to improve bilateral trade.
The High Commission of Pakistan in Sri Lanka organized an interactive meeting with the members of the Sri Lanka Pakistan Business Council to address these issues and the meeting was held Thursday (January 31) with the participation of Acting High Commissioner of Pakistan Amna Baloch, Economic Development Basil Rajapaksa and Minister of Industry and Commerce Rishad Bathiyutheen.
Addressing the gathering the Pakistani envoy has said that the economies all over the world search for complementarities and comparative advantage to build upon them and to create closer ties with each other.
Pakistan and Sri Lanka, which enjoy excellent relations based on non-interference, mutual respect for sovereignty, territorial integrity and support at all forums, strive to add more substance to their economic cooperation and benefit from each other's strengths, the Acting High Commissioner has said.
Although the two countries have strived to put in place an overarching economic framework to facilitate businessmen of both countries to set-up and strengthen commercial and investment ventures with a Free Trade Agreement (FTA) that has been operational since 2005 for trade in goods, the bilateral trade remains under potential reaching only US$ 400 million last year.
Pakistan and Sri Lanka also have a Bilateral Investment Treaty (BIT) and an MoU on Customs Co-operation.
Ms. Baloch has identified limited export diversification over the years, lack of research towards identifying new tradable products, as factors responsible for slow progress in trade relations.
Restriction of trade only in goods and not in services, due to limited progress on expansion of FTA to include trade in services and investments and lack of awareness regarding trade potential resulting from the FTA and inability to fully capitalize on the concessions granted under the agreement also have contribute to the slow trade.
Major Sri Lankan export sectors, particularly, garments and tea have not made full use of the duty free concessions extended by Pakistan, the envoy has said, pointing out that 10,000 metric tons of tea or 3 million pieces of garments that are allowed each year to be exported with a 35% margin of preference.
Pakistan is the third largest tea consumer in the world and has a niche market for high value added garments.
Currently Sri Lanka is importing apples, dates, grapes and other fruits at much higher prices from destinations such as the USA, Australia and the Middle East.
Ms. Baloch has stressed that Pakistan offers a good opportunity to Sri Lankan traders and consumers to benefit from abundant raw material, available at competitive prices and low freight costs.
Pakistan offers various varieties of rice, vegetables and fruits, which if imported from Pakistan, can considerably reduce the inflation in food items, at the same time providing a wide choice of the consumables, she has noted.
Regarding the issue of trade surplus being in favor of Pakistan, she has said that cheap textiles and cotton raw material exports from Pakistan are fueling Sri Lanka's value added apparel industry and earning valuable foreign exchange for Sri Lanka through its exports to EU and US.
Responding to the security concerns expressed, she has said that in today's context conflicts prevail all over the world and trade and investment go on irrespective of those issues and Sri Lanka itself is a prime example where the private sector held the economy together during its 30 years turbulent period.
Mr. Rizwan Ghani of Packages Lanka briefed the forum about his company with 80% shares of Packages Pakistan and its investments in Sri Lanka. He proposed that Sri Lanka may take advantage of Packages Pakistan's expertise in developing indigenous facility to produce tissue-paper and related items.
Economic Development Minister Basil Rajapaksa appreciating the efforts of the High Commission in organizing the interactive meeting has said that such events provide opportunity to gain firsthand insight into the issues in bilateral trade and at the same time create confidence among the business community.
Minister of Commerce and Industry, Rishad Bathiyutheen has said that the problems faced by the two business communities would be addressed in order to take the economic relations forward.
President of Sri Lanka-Pakistan Business Council Rohitha Thilakaratne and Executive Committee and members of Sri Lanka-Pakistan Business Council, and a large number of prominent business personalities also attended the meeting.