Pakistan – Sri Lanka Free Trade Agreement (PSFTA)
Pakistan Sri Lanka Free Trade Agreement (PSFTA) came into force on 12th June 2005. A substantial improvement in trade has been recorded since the Agreement came into force.Pakistan implemented its final phasing out commitment in March 2009 and Sri Lanka has now duty free market access for more than 4500 products. Sri Lanka has also completed all her phasing out commitments in November 2010.
Sri Lanka’s export to Pakistan increased from US $ 26 million during January to May in 2010 to US $ 34 million during the corresponding period of 2011 registering a 30.8% growth. This increase was mainly due to a significant increase in exports such as natural rubber, vegetable products, desiccated coconut, new pneumatic tyres, MDF boards , dried leguminous vegetables, copra, natural graphite, woven fabric etc. during January to May in 2011 when compare to the same period in 2010. However, exports of certain products such as oil-cake and other solid residues, sewing thread of man-made staple fibres, tea, nutmeg, pepper, rubber strips, coconut oil and its fractions etc. have recorded decrease during January to May in 2011 compared to the same period in 2010. A range of new products have also penetrated into the Pakistan market after the implementation of the PSFTA. 2,352 Certificates of Origin were issued under the PSFTA during January to May 2011 when compared to 2,166 Certificates of Origin under the PSFTA issued during the same period in 2010.
The 10th Session of the Joint Economic Commission between Pakistan and Sri Lanka is scheduled to be held in the month of July, 2011 in Islamabad. In this regard, a pre-Joint Economic Commission (Pre-JEC) meeting between the two countries was held in March, 2011 in Colombo. During the Pre-JEC meeting, both sides have agreed to discuss the implementation issues under the PSFTA at the 10th Session of the JEC in order to create more conducive environment for trade between the two countries.
More Comprehensive Economic Cooperation Arrangement with Pakistan
Proposed comprehensive economic cooperation arrangement with Pakistan is presently at a standstill after two rounds of negotiations i.e. in January 2008 in Colombo and in May 2008 in Islamabad.However, at the Pre-JEC meeting held in March, 2011, both Sri Lankan and Pakistan sides have agreed to discuss the future course of action that should be taken with regard to the proposed CEPA at the 10th Session of the JEC as well.