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by Ravi Ladduwahetty

The Free Trade Agreement (FTA) signed between Sri Lanka and Pakistan will give far reaching powers to both countries and will lead to the creation of a regional trading bloc similar to the North American Free Trade Agreement (NAFTA) and the European Union, Commerce and Consumer Affairs Minister Ravi Karunanayake told the Daily News yesterday.

Pakistan has reduced the negative list on Sri Lanka's exports from 820 to 200 while Sri Lanka's negative list has been reduced from 1282 to 500.

Minister Karunanayake signed the agreement on behalf of Sri Lanka while Federal Minister of Commerce Abdul Razak Dawood signed on behalf of Pakistan. Both Pakistan President Gen. Pervez Musharraf and Prime Minister Ranil Wickremesinghe witnessed the signing.

The Agreement will give Sri Lanka a major push for its apparel exports to Pakistan along with tea, electronics and engineering products while Pakistan will be exporting vehicle engineering products and some agricultural products, he said. The Agreement while promoting trading relations between the two SAARC nations, also aims to foster local industries.

He also stressed that Sri Lankan exports to Pakistan will be given a competitive edge. "What was needed for a long time was a vibrant intra-trading region. We have a population of 1.2 billion people, accounting for a fifth of the global population and intra-regional trading is a microscopic 1.2 percent," the Lankan Commerce Minister said. Two other agreements/Memoranda of Understanding (MoU) were signed. They were for Tourism and Archaeology and a cultural affairs program. The two Sri Lankan signatories to the tourism/ archaeology and cultural affairs were Ministers Gamini Lokuge and Dr. Karunasena Kodituwakku.

The Pakistani signatory for both agreements was Minister of State for Foreign Affairs Inam Ul Haque.

The Memorandum for Tourism will also offer a head start for the commencement of a joint program for promotions which will set off losses in recent arrivals. Sri Lanka will take into account Pakistan's outbound tourism in its promotional campaigns.

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