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Monday, 13 May 2013 00:01 - - {{hitsCtrl.values.hits}}
Boosting Lanka-Pakistan bilateral trade levels and cooperation yet again and closely on the heels of the 24 April concessions announcement, Pakistan has decided to liberalise even more export items from Sri Lanka.
“On behalf of the President Mahinda Rajapaksa, I thank the government of Pakistan for these concessions. I strongly believe that the latest measures by Pakistan will help us to move towards better utilisation of the Lanka-Pakistan FTA,” Minister of Industry and Commerce Rishad Bathiudeen stated on 08 May.
Bathiudeen was addressing his meeting with Lankan exporters to discuss recent developments on the Pakistan-Sri Lanka Free Trade Agreement (PSFTA) and future prospects held at his Ministry on 08 May. Among the top Pakistan export-oriented Lankan firms meeting Bathiudeen on 08 May were Adamjee Lukmanjee, Nature’s Beauty Creations, Expolanka Holdings, Hettigoda Industries, Anverally Sons, MK Lanka Exports and USA Trading Ltd.
Followed by India, Pakistan ranks as the second largest buyer of Sri Lankan products in the SAARC region, accounting about 10% of Sri Lanka’s total exports to the SAARC. On 24 April, the High Commissioner of Pakistan to Sri Lanka Maj. Gen. Qasim Qureshi, during his discussion with Bathiudeen in Colombo, informed him that Pakistan had eased tariffs on three Lankan commodities it directly imports from Sri Lanka, namely crude coconut oil, betel leaves, and bottle cooling machines.
During the session with exporters, Bathiudeen announced that consequent to secretarial level meetings held during the last week of April between both countries in Islamabad, even concessions have been received from Pakistan for several Lankan export items.
“These new products are herbal hair oil, mosquito repellent coils, ceramic products, and electric switches exported from Sri Lanka. Pakistan has also agreed to consider concessions for ayurvedic products, fermented beverages, and selected agricultural products from Sri Lanka,” Bathiudeen added. At the secretary level meetings in Islamabad, Sri Lanka was represented by Secretary, Ministry of Industry and Commerce Anura Siriwardene.
Accordingly, the 20% preferential margin of duty currently enjoyed for Sri Lankan betel leaves under the PSFTA will be increased to 35% with immediate effect and according to the Department of Commerce of Sri Lanka; Pakistan imports 5,000-6,000 MT of betel leaves annually. Sri Lanka is the largest supplier followed by Thailand, Bangladesh and India.
Pakistan is the only single market for Sri Lanka’s betel leaves betel leaves worth US$ 5.77 million having been exported to Pakistan in 2010. Crude coconut oil, which is currently in the ‘no concession list’ of Pakistan, will be granted a 50% preferential margin of duty immediately. The preferential margin will be increased to 100% with effect from 1 July 2013, making this product totally duty free under the PSFTA. In 2011, Sri Lanka exported US$ 1.25 million of crude coconut oil to Pakistan. Previously, Pakistan agreed to remove crude coconut oil from its no concession list and phasing it out in two annual instalments and also promised to provide market access for bottle cooling machines on a 50% margin of preference. Bottle-cooling machines will be able to enjoy a 50% preferential margin of duty with immediate effect.
A 50% margin of preference for herbal hair oil and 100% concession for mosquito repellent coils are now in effect.
Pakistan has also agreed to restore a 20% margin of preference on ceramic products and agreed to remove electric switches from the negative list thereby granting 100% duty concession. Pakistan has also agreed to consider concessions for Ayurvedic products, fermented beverages and concessions for selected agricultural products.
When Sri Lanka expressed its concern over Pakistan’s transferring of 65 items into the no concession list without its consent during lengthy discussions, Pakistan agreed to consider removing 28 items out of 65 items from their NCL.
Bilateral trade between both countries experienced a substantial growth after the free trade agreement between the two countries was implemented in 2005. The total trade which stood at US$ 158 million in 2005 rose to US$ 433.69 million in 2012, showing a strong 174% growth. Pakistan ranks in 24th place in terms of total exports (0.9% of SL total exports) and at 14th place in terms of total imports (2% of SL total imports) from the world into Sri Lanka. During the past it was noted that there was a growth in bilateral trade in both exports and imports, especially after the FTA was implemented in 2005. The balance of trade has always been in favour of Pakistan.
Natural rubber, vegetable products, coconuts, brazil nuts, tea, wood, oil cake, pneumatic tyres (rubber), coconut (copra) oil are Sri Lanka’s main exports to Pakistan.
