Sri Lanka and Pakistan successfully conclude 10th JEC sessions in Islamabad

The Ministerial Level (trade) meeting between Sri Lanka and Pakistan after a six year period took place on 4-5 July in Islamabad, as the two South Asian countries met to discuss ‘Sri Lanka-Pakistan Joint Economic Commission’.

During the state visit of President of Islamic Republic of Pakistan Asif Ali Zardari to Sri Lanka from 27-30 November 2010, President Mahinda Rajapaksa agreed to hold the 10th session of JEC in the first quarter of 2011 to be co-chaired at ministerial level.

Thereafter, in March 2011, a high-powered official Pakistani delegation arrived for a pre-JEC meeting to finalise the agenda for the July JEC. Consequent to this, a 14-member delegation led by Minister of Industry and Commerce Rishad Bathiudeen left Colombo on 2 July to Islamabad.

On 4 July, Minister Bathiudeen, who led the high-powered Sri Lankan delegation, began bilateral discussions with Pakistani Minister of Foreign Affairs, Finance and Economic Affairs Hina Rabbani Khar, who led the Pakistan team.

Minister Bathiudeen apprised Minister Rabbani Khar of Sri Lanka’s new growth phase and the resulting positive investment climate. Minister Bathiudeen’s request to invest in industries and infrastructure development, including pharmaceutical manufacturing sector in Sri Lanka has also been well received.

Apprising the Pakistani side, Minister Bathiudeen said: “If we are to reap the benefit of bilateral and regional free trade agreements, we need to continue our efforts tirelessly, by pursuing a plan of action to enhance the volume and value of trade between our two countries.  In this connection the role of the private sector is crucial. They need to study very closely the opportunities available in each others’ markets, and engage themselves with each other on regular basis.”

Upon detailed review of implementation status of decisions taken at the 9th Session of the Pakistan-Sri Lanka Joint Economic Commission, both sides agreed that the implementation status of JEC was satisfactory to Sri Lanka and Pakistan.  

Both the delegations acknowledged that relations between the two countries were based on shared understanding on a wide range of bilateral, regional and international issues. It was emphasised that both countries were yet to explore the full potential for expanding and increasing trade under the FTA. However, it was observed that bilateral trade had increased considerably with the implementation of the FTA in 2005 from US$ 147 million in 2004 to US$ 342 million in 2010.

Both sides agreed on the need to encourage business community of the two countries to engage in regular interactions, participation in exhibitions and promotional events in each other’s country, facilitate their frequent visits, etc. They further agreed on the need to have regular meetings to review the progress of the implementation towards resolving emanating issues from time to time.

On bilateral cooperation under the Joint Economic Commission, the two sides agreed to cooperate in diverse areas which includes bilateral trade, investment, joint venture possibilities, banking and finance, human resource development, technical assistance and capacity building, health, agriculture, credit facilities, ports and shipping and cooperation in the field of science and technology and specific industrial sectors including gem and jewellery. The two countries identified that there were many potential areas and agreed to work together to identify such areas for strengthening bilateral relations.  

Khar stated that current levels of bilateral trade showed considerable future trade potential.

The Sri Lankan delegation was looking to reduce tariff imposed by Pakistan on Sri Lankan agro products, coconut based products and betel leaves in Pakistan. The Sri Lankan delegation also focused on the US$ 200 million Pakistani credit line extended to Sri Lanka in November 2010. During his visit to Colombo in December 2010, Pakistani President Zardari expressed Pakistan’s strong interest to increase bilateral trade beyond the level of half a billion dollars.

Both sides agreed to revisit their visa policies especially for their respective business communities to facilitate their frequent visits and enhance bilateral trade relations. Both countries also agreed to strengthen associations between trade bodies of the two countries, focusing on sectoral alliances of identified sectors and also to increase exchanges of bilateral trade delegations.

Matters related to the implementation of Sri Lanka-Pakistan Free Trade Agreement were also among the items in the talks. A Sri Lanka-Pakistan joint FTA review meeting was agreed on, to begin in Colombo in August 2011. The decision to proceed with the meeting was officially reached by both Sri Lanka and Pakistan sides jointly.

Both Ministers also agreed to hold the next JEC meeting in Colombo in 2012. In the interim, bilateral meetings of Joint Economic Commission (JEC) are scheduled to take place on a regular basis.

As per phasing out of tariff, both sides were satisfied that the needful had already been done by both countries as per their respective commitments. Both sides expressed their willingness to enhance cooperation in matters of customs and classification of goods. Details in this respect are expected to be worked out during the August-2011 FTA review in Colombo.

The matter of Tariff Rate Quota (TRQ) for long Pakistani Basmati rice (reserved for public sector agencies of Sri Lanka under Tariff Rate Quota during 2010) will be discussed in detail during the August-2011 FTA review in Colombo after which a decision may be made. The request by Sri Lankan delegation with regard to increase of taxes on betel leaves will also to be worked out in detail during the August-2011 FTA review in Colombo.

The Pakistani delegation informed the Sri Lankan side that they were examining Sri Lankan concerns on the tariff lines for coconut oil, adding that it would be considered accordingly. In January 2008 Colombo requested Pakistan to remove its coconut oil exports from Pakistan’s ‘No Concession List’.

The Sri Lankan side also requested Pakistan to implement the decision to grant a 50% Margin of Preference (MOP) as agreed at the second Pakistan-Sri Lanka Free Trade Agreement Review Meeting held in Colombo in January 2008. The Pakistani delegation informed that they were examining the tariff lines and that this request would be considered accordingly.

Sri Lanka also made an observation on high tariffs imposed on certain Sri Lankan agriculture products, to which the Pakistan delegation responded by requesting the Sri Lankan delegation to specify the agriculture products concerned where Sri Lanka also has an export interest. The Pakistan delegation had expressed that Pakistan would consider reviewing these tariffs accordingly.

Both sides agreed to explore the possibility of establishment of direct shipping services between Pakistan and Sri Lanka to further enhance the level of bilateral trade between the two countries.

On the sidelines of the JEC, Minister Bathiudeen paid a courtesy call on Prime Minister of Pakistan Yousaf Raza Gilani on 5 July. During the meeting, which was very cordial and productive, matters of mutual cooperation related to the two countries were discussed. The Prime Minister of Pakistan also indicated his willingness to offer more opportunities for Sri Lankan students to study in Pakistan.

Minister Bathiudeen specially thanked the Pakistani Prime Minister and the Government of Pakistan for sending the precious and sacred Buddha relics to Sri Lanka on the occasion of 2,600th anniversary of attainment of enlightenment by Buddha. Minister Bathiudeen also thanked the Government of Pakistan for extending its fullest support and cooperation in eradicating terrorism in Sri Lanka.   

On 4 July Minister Bathiudeen also had a bilateral meeting with Pakistani Minister of Commerce Makhdoom Amin Faheem and discussed matters related to further development of trade and economic activities. Both Ministers emphasised on the need for increased trade between the two countries utilising the duty free concessions offered under the Free Trade Agreement, exchange of trade delegations, participation in trade fairs and more people-to-people contacts.

The Pakistani Minister accepted the invitation by Minister Bathiudeen to visit Sri Lanka with a trade delegation to participate in the 2012 mega EXPO scheduled for March next year in Colombo.

Minister Bathiudeen held a bilateral meeting on 4 July with the Senior Advisor to the Prime Minister on Industries Mohammad Bashrat Raja and discussed mutual cooperation in the field of industries such as gem and jewellery, cement and sugar.

Minister Bathiudeen on 5 July addressed the Federation Chambers of Commerce and Industry in Islamabad. In his speech, he reiterated the need for closer interaction between the business community of the two countries for further development of trade, investment and economic activities. He invited the Pakistani business community to participate in EXPO 2012, which is scheduled for March 2012 in Colombo.

The Sri Lankan delegation which was led by Minister Bathiudeen included (among others) Ministry of Industries and Commerce Secretary Tilak Collure, Director General of Commerce Gomi Senadhira, Deputy Secretary to Treasury D. Widanagamachchi, Ministry of Finance and Planning Additional Director General A. Kumarasiri, Ministry of Education Director Development B.M. Sumana Bandara, Sri Lanka Customs Director R.P.D. Tharaka Seneviratne, Deputy Director of Commerce V.S. Sidath Kumar, Central Bank Economist K.S. Karanagoda and Department of Animal Production and Health Livestock Economist Dr. K.A.C.H.A. Kothalawala.

Also joining the delegation in Pakistan were Sri Lankan High Commissioner to Islamabad Air Chief Marshal (Retired) Jayalath Weerakkody, Consul General of Sri Lanka in Karachi D.W. Jinadasa and High Commission of Sri Lanka in Islamabad Minister Counsellor M.H.M.N. Bandara.