The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has launched a publication on free trade Memorandum of Understanding (MoU) between Pakistan and Sri Lanka, here today.
The idea behind publishing this document is to provide the readers, stakeholders, and interested business parties a chance to look into the prospects of trade between the two countries.
The publication will also be a source for the regulators and the policymakers to understand the existing trade between two South Asian Association for Regional Cooperation (SAARC) countries, Pakistan and Sri Lanka, under their free trade agreement.
The Pakistan-Sri Lanka Free Trade Agreement (PSFTA) in concern was signed in August 2002 and came into effect in July 2005. As per the terms of the agreement 100 percent immediate concession was granted to major export products of both Pakistan and Sri Lanka.
As a result, the trade volume doubled from approximately $212 million in 2005 to around $460 million in 2018.
Despite this improvement, the actual trade potential between the two countries remains unrealized. That is where this published document comes in. It chalks out the specifics of this potential and suggests ways to remove obstructions to the full realization of trade between the two countries. As per the findings of the study, over $2.7 billion of trade potential exist between these two countries if the FTA is fully utilized.
The study revealed that Pakistan enjoyed an increasing surplus in bilateral trade with Sri Lanka. However, Sri Lanka’s bilateral trade with Pakistan is considerably low. In this context, the study uses the trade complementarity index tool to see whether Sri Lankan exports meet the import demand of Pakistan and also establish the extent of sectoral match and mismatch between the two countries.
The FPCCI hosted the publication launching ceremony in Marriott Islamabad. Among the notable attendees of the event were the High Commissioner of Sri Lanka to Pakistan Vice Admiral Mohan Wijewickrama, Senator Mushahid Hussain Sayed, and Senate Foreign Affairs Committee Chairman.
In his address, Senator Sayed said that it is important for the private sectors of both countries to play their role to utilize the highlighted trade potential available in each country. He also accentuated the potential of Religious Tourism and exchange in the cultural heritage of both countries. He also invited Sri Lanka to take the advantage of China Pakistan Economic Corridor (CPEC) to enhance its outreach to Central Asian states and European countries.
FPCCI President Anjum Nisar said that the Covid-19 pandemic has brought the business community much closer through the use of new technologies, adding that the political issues in the region were being a hurdle in the way of reaching the true potential of the trade.
High Commissioner of Sri Lanka to Pakistan, Vice Admiral Mohan Wijewickrema said that Covid-19 has increased trade challenges between member countries with a decrease in foreign remittances, adding that Pakistan and Sri Lanka had historic relations and that Sri Lanka is the second-largest trading partner of Pakistan in South Asia.