COLOMBO, April 25: Pakistan said on Monday the start of a free trade agreement with Sri Lanka in June is expected to double business between the two countries to almost $300 million in the first year. Pakistan’s High Commissioner to Sri Lanka Bashir Wali Mohamand told reporters that he expected business between the two South Asian nations would double in goods such as tea, betel leaves and cotton after the deal comes into force.

He said a three-day Pakistan trade exhibition opening here from Thursday would be a further boost and expected similar events to be organized by Sri Lankan exporters.

Pakistan’s exports to Sri Lanka were worth $97 million in 2004, up from $76 million in the previous year. Sri Lanka’s exports to Pakistan were worth $48 million, up from $38 million in 2003.

Mohamand noted Pakistan’s cabinet approved the free-trade agreement on April 12 and both countries were expected to make the treaty operational by mid June.

The two countries are members of the seven-nation South Asian Association for Regional Cooperation (Saarc) which has also agreed to pursue a free-trade arrangement covering one-fifth of the world’s population.

A full regional free trade agreement was to be in place by 2001 as agreed by SAARC leaders in 1998, but negotiations are still underway.

The slow movement of Saarc prompted Sri Lanka to use the “fast-track” bilateral route to boost trade and Sri Lanka in late 1998 signed a free trade deal with India. Sri Lanka is negotiating similar deals with Bangladesh and Maldives.—AFP