Pakistan-SL trade volume could exceed US $ 1 b

Pakistan High Commissioner Seema Ilahi Baloch expressed satisfaction on the increase in the volume of bilateral trade since the signing of the Pakistan- Sri Lanka Free Trade Agreement (PSFTA) which came into effect in June 13, 2005. She added that there is a huge untapped potential in this area and with collective effort, the trade volume could exceed US $ 1 billion.

She said so at a press briefing jointly held with Sri Lanka Export Development Board (EDB) Chairman and Chief Executive Janaka Ratnayake recently at the Export Development Board (EDB).

The High Commissioner said institutional infrastructure in shape of the FTA on goods, Bilateral Investment Treaty, and MoU on Customs Cooperation is in place and added that the framework can be strengthened by negotiating and concluding Services and Investment chapters of the FTA.

She also invited Sri Lankan investors to visit Pakistan and explore its potential, including geo- strategic location, trained workforce, abundant raw materials, infrastructure and investor-friendly policies. Pakistan is especially looking forward to investments in the energy sector, she said.

Pointing out the apprehension of Sri Lankan businessmen towards the perceived security environment of Pakistan, she said incidents of terrorism were confined to isolated areas and urban centres were safe and secure for business. She also said Pakistani agricultural products provide a cheaper and higher quality alternative to Sri Lankan imports from countries such as Australia and South America. This in no way would compete with local farm products and add to the diversity to the advantage of consumers. She pointed out that one such product was Pakistani mangoes, which are a seasonal product (June-August) and due to high quality are being exported to western countries passing their strict quarantine requirements.

Ratnayake said, "Pakistan and Sri Lanka enjoys a strong and long standing bilateral multi- faceted relationship, including economic cooperation. Sri Lanka considers Pakistan as a true friend who stood by the people of Sri Lanka during difficult times. EDB is willing to join hands with the Pakistan High Commission in Sri Lanka to expand the volume of trade between the two countries to further strengthen the long standing commercial ties for mutual benefit".

He added that in February 2010, the EDB had to cancel Sri Lanka's participation at the Expo Pakistan Exhibition at the last moment due to the concerns of the private sector. "However we believe that it is our duty and the responsibility to work with the friendly neighbour at this moment to develop trade and provide opportunities for the business communities of both the countries to forge new trade relations with each other," he said.

Ratnayake pointed out that there is untapped, vast potential for enhancing trade for both countries to explore using the tariff concessions available under the FTA. Despite the concessions available under the FTA, Sri Lanka's exports to Pakistan accounted for less than 1% of total exports of the country.

Ratnayake said the EDB is ready to carry out a series of promotional activities in Pakistan and Sri Lanka in collaboration with the Pakistan High Commission for 2012. This will include conducting seminars to create awareness, mini exhibition for women entrepreneurs from both countries, single country exhibition and trade fair participation. Sri Lanka could also look into the new opportunities that will arise from the Free Trade Agreement Pakistan has with China, he added.

Both the High Commissioner and Ratnayake expressed their firm resolve to work together to enhance the economic ties, especially trade between the two countries, for mutual benefit.

The EDB organized Sri Lanka's participation at the My Karachi International Exhibition consecutively in 2007, 2008, 2009 and 2010 which paved way for a number of Sri Lankan exporters to enter and expand in the Pakistan market. The EDB has taken efforts to promote value added products to the Pakistan market through this event viz. packeted tea, confectionery products, herbal healthcare products, ayurveda products, wood based modular furniture, rubber products , gems and jewellery, porcelain tableware, paint and varnishes, pre- fabricated steel products, electrical wiring accessories, LV panel boards, MCBs, switch boards and power panels, spiral duct work and accessories etc.

Pakistan is the second largest trading partner of Sri Lanka in the SAARC region. It was the 26th export destination for Sri Lanka in 2010 accounting for nearly 0.7% of total exports in value terms while it has been the 10th largest import origin contributing to over 2% of total imports in to Sri Lanka in the same year. Trade between the two countries had grown during the recent past except 2009. According to the Sri Lanka Customs statistics, the value of total trade between the two countries which stood at US $ 169 million in 2005, has increased up to US $ 345 million in October, 2011 recording a 4.5% average growth during this period.

Sri Lanka has exported mainly the basic commodities to Pakistan. The main exports in to Pakistan in 2010 includes sheet rubber, betel leaves, other natural rubber, coconut fresh nuts, desiccated coconut, crepe rubber, pepper, woven fabrics, lentils and tea in bulk.