Thailand has officially declined the invitation to invest in the auto industry of Pakistan.
The decision was made after the eighth round of bilateral meetings between the two countries held on 23rd and 24th August in Islamabad.
A source privy to the matter told that both sides have almost finalized the text of the proposed free trade agreement (FTA). However, negotiations are still underway on the tariff reduction.
Thailand’s Commodity Advantage
According to an official study, Thailand has a comparative advantage in around 1,000 commodities, chiefly electrical and electronic appliances, machinery and components as well as automobiles and parts.
The final decision on the Pak-Thailand FTA would be made during the 9th round of talks between the two countries scheduled on November 14-15 in Thailand.
Both sides had exchanged the final offer lists of items for free trade, including automobile and textile sectors for removing the reservations of the business communities.
During the 9th round, he said, talks would also be held on the text of agreement, tariff reduction modalities, complete request lists from both sides and offer lists.
Thailand has sought a drastic reduction in the tariff on the auto sector under the proposed FTA.
Turkey Interested in Pakistan’s Auto Sector
Thailand followed Turkey in demanding market access for the auto sector in Pakistan. In the last round of FTA negotiations held in Islamabad, Thai authorities conveyed that the agreement’s implementation would be linked with access to the auto sector in Pakistan.
To move forward, Pakistan will engage local stakeholders of the auto sector for consultation, the official said. He added that a delegation of the auto sector will also be sent to Bangkok for a meeting with Thai authorities.
“We will facilitate this meeting between the private sectors of the two sides,” the official said.
In 2006-07, Pakistan carried out a study for the initiation of a Preferential Trade Agreement (PTA) with Thailand. However, no further progress was made and the study remained on paper only.
Final Agreement in October
Meanwhile, Pakistan and Thailand have agreed to present the complete offer list on Free Trade Agreement (FTA) on October 15, aiming at signing the final agreement in this regard. Both sides have agreed on the total tariff line and are also willing on a Mutual Recognition Agreement (MRA) for harmonizing the standards and products.
Pakistan also wants concession on 100 products from Thailand granted to ASEAN countries, an official told the correspondent.
Pakistan’s Commodity Advantage
He added that Pakistan has a relative advantages in 684 commodities including cotton yarn and woven textiles, ready made garments, leather products, surgical instruments and sports goods.
Talking about the FTA with China, the official said negotiations on second phase of the FTA with China would be held from September 13th to 14th in China headed by Secretary Commerce Younas Dhaga.
He said that Pakistan wants to have duty relaxation on 45 products before launching the phase-II.
“We demanded unilateral relaxation on 45 different products for coming three years before signing Phase-II of FTA.” the official said.