Pakistan - Sri Lanka Free Trade Agreement (PSFTA)

Details: Category: Pakistan-Sri Lanka Free Trade Agreement (PSFTA)

As the 2nd bilateral Free Trade Agreement (FTA) of Sri Lanka, the framework agreement of Pakistan- Sri Lanka Free Trade Agreement (PSFTA) was signed on the 01st August 2002 and the PSFTA came into operation from 12th June 2005.
In accordance with the respective commitments under the PSFTA, Pakistan has implemented its final phasing out in March 2009, allowing Sri Lanka a duty-free market access for more than 4500 products. Sri Lanka has completed its phasing out commitments in November 2010.

PSFTA- at a glance

Product Coverage of the PSFTA for Tariffs Concessions:

Type of commitment	By Pakistan		By Sri Lanka
Type of commitment	Description	Applicable Customs Duty	Description	Applicable Customs Duty
No Concession List	541 Tariff Lines at 6 digits	General duty rates	697 Tariff Lines at 6 digits	General duty rates
100% immediate duty reduction ( w.e.f. 12.06.2005)	206 Tariff Lines at 6 digits	Zero	102 Tariff Lines at 6 digits	Zero
Phasing Out Lists	- Upon entering into force not less than 34% (12.06.2005) - At the end of the second year not less than 67% - At the end of third year not less than 100%	-	- Upon entering into force not less than 20% (12.06.2005) - At the end of first year not less than 30% - At the end of the second year not less than 40% - At the end of the third year not less than 60% - At the end of the fourth year not less than 80% - At the end of the fifth year not less than 100%	-
Tariff Rates Quotas (TRQs)	Apparel: - 3 million pieces of garments with a maximum quantity of 200,000 pieces per category - 21 categories	MOP – 35%	Basmati: - Duty free 6,000 MT per year	Zero
		MOP – 35%	Potatoes: - Duty free 1,000 MT per year - 2/3^rd during June – July and 1/3^rd during October – November	Zero
	Tea: - Duty free 10,000 MT per year (July/ June)	Zero		Zero

Rules of Origin (ROO) Criteria under the PSFTA:

There are key ROO criteria as “wholly obtained or produced” vs the products which are “not wholly produced”.

There are 03 requirements of ROOs under “not wholly produced”, as follows:

Minimum Domestic Value Addition (DVA): 35% of FOB and when it is applicable to Cumulative Rules of Origin there should be a minimum DVA of 25%, subject to the Aggregate Value Addition of 35%
Change of Tariff Sub-Heading (CTSH) or at HS 6-digit level
And there should be a sufficient working or processing or should not be an in sufficient working.

For the products that are eligible for tariff concession from Pakistan under PSFTA, you may check the List of Concession attached.

Pl. visit the following website of Sri Lanka for the PSFTA duty concessions and other tariff information of Sri Lanka:http://www.customs.gov.lk/classification/tarrif

Statistical Analysis