Sri Lanka and Pakistan have agreed to include services in a bilateral free trade agreement (FTA), Prime Minister Nawaz Sharif said on Tuesday. India has been in discussion with Sri Lanka to liberalise the service sector under a trade pact for a Comprehensive Economic Partnership Agreement (CEPA) since early 2000. But Sri Lankan entrepreneurs have strongly opposed the such an agreement with India saying they would be at a disadvantage and could be forced out of businesses.
“The two countries have agreed on the inclusion of services and investments chapters in the bilateral FTA,” Sharif, who is visiting Sri Lanka, said after overseeing the signing of eight bilateral agreements. They signed their FTA in 2005. “This would enable our companies to form joint ventures for export to third countries.”
The volume of trade between Sri Lanka and Pakistan has been estimated at about $325 million a year. Sharif said both South Asian countries had agreed to re-invigorate efforts to reach a target of $1 billion “at the earliest”. Trade between Sri Lanka and India is an annual $4.7 billion, but a CEPA could boost that much higher with Indian investment coming into Sri Lanka’s service sector, economists say. Successive Sri Lankan governments have rejected India’s request to sign a CEPA, but Sri Lankan Prime Minister Ranil Wickremesinghe last month promised to sign an economic and technology cooperation agreement with India and China.
Political analysts say any move to liberalise service to Pakistan ahead of India could put a strain on relations between Sri Lanka and its big neighbour, which could have costs for Sri Lanka. Many Indian and Pakistan companies such as India’s oil giant Indian Oil Corporation and Pakistan’s Thatta Cement Company have invested in Sri Lanka.
APP adds: Prime Minister Muhammad Nawaz Sharif and his Sri Lankan counterpart Ranil Wickremesinghe on Tuesday launched the “Pakistan Single Country Exhibition 2016” aimed at tapping the business potential of two countries. Addressing a gathering of Pakistani and Sri Lankan businessmen here at the Temple Tree – the Office of Prime Minister, the PM invited the Sri Lankan businessmen to invest in Pakistan’s different areas.
The PM said the “Pakistan Single Country Exhibition” would provide a useful platform to further enhance the excellent commercial and bilateral relations between Pakistan and Sri Lanka. He termed it a timely opportunity for Sri Lankan businessmen to benefit from the vibrant and progressive economy of Pakistan. Sri Lankan Prime Minister Wickremesinghe said Pakistan and Sri Lanka enjoyed strong political relationship, however stressed that the economic relationship needed to be strengthened.
He said Sri Lanka, for centuries, had been the heart of trade with routes up to Asia and Africa. He expressed his country’s interest to redefine trade links with Pakistan which he said was ready to open up new trade corridor up to Central Asia. Prime Minister Wickremesinghe lauded Prime Minister Sharif for taking step for strengthening the national economy and for the well-being of people. The two Prime Ministers witnessed the signing of eight Memoranda of Understanding between the private sector of Pakistan and Sri Lanka.
— The MoUs were signed between 1) Ghabriwal Cement, Pakistan and Maxton Holding, Sri Lanka; Aman Centre for entrepreneur development;
2) IBA Karachi and Federation of Chambers of Commerce and Industry Sri Lanka;
3) Stellar Rock Pvt Ltd Pakistan and Eagle Powers Pvt Ltd;
4) HKH Enterprises Pakistan and Lanka Business Consortium;
5) Pakistan Sri Lanka Business Council of the Federation of Chambers of Commerce and Industry of Pakistan and Sri Lanka Pakistan Business Council of the Ceylon Chamber of Commerce;
6) Pak Hy Oils and Granada Suppliers Sri Lanka;
7) Paidar Shipping Pakistan and Granada Suppliers and;
8) Paidar Energy Pakistan and Maxton Holdings;
The exhibition organised by Trade Development Authority of Pakistan (TDAP) in partnership with High Commission of Pakistan in Sri Lanka features over 110 top organisations representing some of the Pakistan’s leading companies and brands. The range include engineering products, auto parts, agro products, textile and clothing, designer wear, pharmaceuticals, cutlery, designer wear, gems and jewellery, carpets and marble.
Source: Reuters, Associate Press of Pakistan