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Real potential of bilateral trade still needs to be achieved under PSFTA: Sri Lankan Trade Minister Blogs

Real potential of bilateral trade still needs to be achieved under PSFTA: Sri Lankan Trade Minister


KARACHI: Sri Lankan Minister of Trade Dr. Bandula Gunawardhane, while commenting on Pakistan Sri Lanka Free Trade Agreement (PSFTA), stated that PSFTA has contributed moderately to the enhancement of bilateral trade volume therefore, the real potential of bilateral trade was still needed to be achieved by both countries under PSFTA.  

Dr. Gunawardhane, who led a Sri Lankan delegation during its visit to the Karachi Chamber of Commerce & Industry (KCCI) on Thursday, said that in 2020, despite the debilitating impact of COVID-19 pandemic on all businesses, Sri Lanka’s total exports to Pakistan reached US$74 million, of which US$53 million worth of exports or 73 percent took place under PSFTA.

Consul General of Sri Lanka Jagath Abeywarna, Director General/ Economic Affairs Division, Sri Lankan Foreign Ministry Prof. Dr. Saj U. Mendis, Commercial Secretary, High Commission of Pakistan in Sri Lanka Asma Kamal, Chairman Businessmen Group & Former President KCCI Muhammad Zubair Motiwala, President KCCI Muhammad Idrees, Senior Vice President Abdul Rehman Naqi, Vice President KCCI Qazi Zahid Hussain, Former President KCCI Majyd Aziz, Chairman of KCCI’s Sub-Committee for Fairs, Exhibitions & Trade Delegations Azeem Ahmed Alvi, KCCI Managing Committee Members and others attended the meeting.

Sri Lankan Trade Minister said that Pakistan was the only market for Sri Lankan betel leaves which is mostly associated with the income of the rural population of Sri Lanka. “We are hopeful that Pakistani government will soon do away with the regulatory duty which adversely impacted the export of betel leaves from Sri Lanka”, he added.

He said that the relations between Pakistan and Sri Lanka date back to the formative years of the two countries as they laid foundation of their friendship in 1948 when the Sri Lankan Prime Minister visited Pakistan. “From historical time onwards, we enjoy and cherish the cordial, close and deep relations of Pakistanis in all aspects of our lives.”

He pointed out that on the trade front, Pakistan has been a long-standing partner and a close ally of Sri Lanka. In mid-70s, Pakistan was the largest buyer of Sri Lanka, accounting for 8 percent of Sri Lanka’s total exports due to high intake of Ceylon tea. Today, Pakistan was the second largest trading partner of Sri Lanka in the SAARC region. “Sri Lanka Pakistan economic cooperation needs to be performing well than in the present context. Therefore, let us join hands for better economic ties between the two countries for greater economic issues”, he added.

He hoped that the business visit of Sri Lankan delegation will certainly pave way for further strengthening friendly and cordial relations and take them to new heights in the areas of trade, investment and tourism, besides imparting much needed impetus to guide to the growing dynamics of bilateral relations.     

Chairman Businessmen Group Zubair Motiwala, in his remarks, pointed out that although higher number of government dignitaries from both countries including the Prime Ministers were meeting each other but no progress rectifying the existing FTA between Pakistan and Sri Lanka was taking place. At this point in time, this FTA, which was signed long time ago, needs to be revisited and made in order according to current problems, current way of businesses and the current way of dealing with the world market. “I would request my government and also the Sri Lankan government to sit together and revisit this FTA as soon as possible”, Motiwala said, “The delay in revisiting the FTA was due to the fact that Business-to-Business meetings were hardly taking place. When businesses sit together to negotiate and the governments understand what is desired by each side then they (the governments) have no other option but to make necessary amendments.

Chairman BMG said, “Despite being close and very reliable friends, Pakistan’s exports and imports to Sri Lanka too low which were neither desirable nor acceptable. We have to work on this as there was a great scope for Pakistani goods in Sri Lanka and the trade potential of around US$2.5 to US$3 billion exists.”

He suggested that the massive amount of goods being exported by India to Sri Lanka including raw materials, can easily be replaced with same kind of Pakistani products and materials. 

He was of the opinion that the reason for flourishing Sri Lankan garments and apparel industry was the educated and skilled labor workforce. “The stitching in Sri Lanka was being done so well that many foreign buyers of Pakistani garments insist that the stitching of finished goods is done in Sri Lanka. Those people sitting on the machines are educated so they understand what is the requirement”, he added.

He further requested the Sri Lankan Trade Minister to convince his government to revisit the investment policy announced recently which would certainly create a win-win situation for both the countries. 

Chairman BMG said that Pakistan and Sri Lanka were blessed with enormous amount of minerals including gems, gold, copper, petroleum products and almost everything.  Sri Lanka possesses huge raw material for paper industry hence relevant Pakistani businessmen can set up their paper industries in Sri Lanka but they must be provided single window facility. 

Keeping in view the Sri Lankan expertise in gems cutting and polishing, he invited Sri Lankan businessmen to come to Pakistan to explore opportunities in this sector. We will also guide you to Afghanistan where there is a huge potential for the gem stones industry.”

He also emphasized on both the governments to have more air and sea linkages to promote tourism sector whereas frequent visits of business delegations must also take place between the two countries.

Earlier, while welcoming the Sri Lankan delegation, President KCCI Muhammad Idrees pointed out that during 2020, goods exported by Pakistan to Sri Lanka totaled $324.7 million while the imports from Sri Lanka were recorded at $78.9 million. “The real trade potential is much higher than what the current statistics reveal and we are determined to unlock this potential through concerted efforts and close coordination with Sri Lankan side”, he added. 

He said that Pakistan was a huge market for spices which Sri Lankan exporters can explore. One such product is cloves. In 2020, Pakistan imported $9.91 million worth of cloves from other countries whereas, Sri Lanka exported around $15.87 million worth of the commodity to other countries but trade in this particular commodity does not exist between Pakistan and Sri Lanka. 

He also stressed that Sri Lanka should look into importing pharmaceutical products from Pakistan. During 2020, Sri Lanka imported Medicaments consisting of two or more constituents worth around $2.14 million from countries excluding Pakistan even though we exported $9.70 million worth of the commodity. The businessmen of both countries must also look into the possibility of undertaking joint ventures for the cultivation of coconut trees at the huge coastal belt in Pakistan. 

He urged businessmen and investors to capitalize on the opportunities in the agriculture, textile, tourism, real estate, energy and IT sectors which are attractive investment sectors in both countries. Pakistan has a number of Buddhist religious sites which can attract religious tourism from Sri Lanka.

President KCCI also invited Sri Lanka to participate in My Karachi Exhibition scheduled to be organized at Karachi Expo Center from Feb 11 to Feb 13, 2022. It provides an excellent opportunity to businessmen to interact at one place and it is attended by almost one million visitors.