ISLAMABAD, July 30: Pakistan will face difficulties in getting maximum share in the Sri Lankan market under the free trade agreement (FTA) because of import of goods at preferential duties from India, says an official report. “Since Sri Lanka has an operational FTA with India, the goods exported from India to Sri Lankan have a tariff preference, making it difficult for Pakistan’s exports to get a foothold in the Sri Lankan market,” according to the report on “free, preferential trade agreements, recent development and implications”.

The report, a copy of which was available with Dawn here on Saturday, observed that Pakistan’s exports would grow for both agriculture produce like fresh fruits — kinnoo, dates, rice, potatoes, etc., — and manufactured goods like iron, still pipes and other intermediary goods. The bilateral trade will definitely have the potential to grow rapidly.

It has been bilaterally agreed to include investment in the purview of the FTA. Negotiations on trade in services and investment will be undertaken in the near future to convert the bilateral FTA into comprehensive economic partnership. The report says that under the trade related quotas (TRQs), Pakistan has provided a market access to Sri Lanka on tea — 10,000 tons per year at zero duty; betel leaves -– 1,200 tons per year (35 per cent reduction in duty); and garments –- four million pieces per year on 20 specified HS Headings (reduction of duty by 35 per cent).

Under the TRQs, Sri Lanka has provided a market access to Pakistan on rice -– 6,000 tons per year; and potatoes — 1000 tons per year. PTA with D-8: The developing-8 is a regional group of eight Muslim countries — Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey.

A technical meeting of the group would be held in Islamabad next month to finalize a draft agreement for submission to the governments of member countries for approval during this year. The rules of the origin and list of items on which tariff would be reduced would also be finalized during the current fiscal year.

South Asian Free Trade Area (Safta): The report says that the committee of experts (CoEs) had met on eight occasions to finalize negotiations on annexes to the agreement. It is expected that negotiations on sensitive list would be finalized in the next two meetings.

Under the rules of the origin, there are certain disagreements on criteria of according origin to the goods eligible for import under the FTA and consensus would be developed in the upcoming meetings.

As regards revenue compensation mechanism for the least developed countries (LDCs), the difference of opinions between the LDCs and non-LDCs members of Safta is still very wide. There is, however, a possibility that this mechanism could be evolved before the Saarc summit to be held in Dhaka later this year.

FTA with Gulf Coordination Council (GCC): The first round of negotiations on the FTA would be held in the near future and the date of meeting is yet to be finalized.

PTA with MERCOSUR: Pakistan would soon start negotiations on the PTA with MERCOSUR member countries — Argentina, Brazil, Uruguay and Paraguay.

PTA with Iran: Pakistan has notified the PTA agreement along with the rules of origin and concession lists. Similar action by Iran is awaited, which will result in operational of the agreement.

The Economic Cooperation Organization Agreement on Trade (ECOTOA) includes Pakistan, Iran, Afghanistan, Turkey, Azerbaijan, Kazakhstan, Turkmenistan, Tajikistan, Uzbekistan and Kyrgyzstan. The agreement under consideration would be finalized soon.

Early Harvest Programme (EHP) with China: The EHP and PTA with China have already been finalized and are operational. It would lead to a free trade agreement. FTA with Asean states: Pakistan would start negotiations on the FTA with Asean regions (on the basis of 10+1) shortly. Bilateral Investment Treaty (BIT) with US: The treaty would be finalized in the next two meetings.