Pakistan negotiating a number of agreements to promote trade
By Asad Cheema

ISLAMABAD—Pakistan is negotiating a number of agreements with other states to promote its trade and it has no concern with any other agreement in this connection between two or more countries in the region.
According to official sources the negotiations with Bangladesh, Indonesia, Malaysia, Singapore and Thailand are under progress and soonagreements will be finalized with these countries. World Trade Organization (WTO) provides a common platform to each country to promote trade relations with the rest of the world. However every country has the right to undertake trade negotiations and reach an agreement to protect and promote its trade interests.
Referring to a recent press report, the sources said the story made an attempt to portray a false impression of Pakistan’s Trade Diplomacy and tried to link BIMST-EC with Pakistan’s trade regime with India under South Asia Free Trade Agreement (SAFTA). “The story is based on ignorance about BIMST-EC and the current level of negotiations on Free Trade Agreement (FTA) by the member countries of that Regional Arrangement”, he added.
The Regional Arrangement (now BIMST-EC) between Bangladesh, Sri Lanka, India and Thailand, was set up in June 1997 to foster social-economic cooperation among member countries. Myanmar was admitted to the Regional grouping in December 1997 whereas Bhutan and Nepal joined BIMST-EC in 2004. SAARC countries negotiated and put into operation a Preferential Trade Agreement in Goods i.e. South Asia Preferential Trade Agreement (SAPTA) in 1993 even prior to the creation of BIMST-EC. It was an attempt to liberalize trade on identified goods with reduction of tariff on Margin of Preference. In order to further boost the trading links a Free Trade Agreement i.e. SAFTA was negotiated and signed here in 2004 during the SAARC Summit.
The BIMST-EC Free Trade Areas was conceptualized in April 2000 and the negotiations on an FTA still continue and it may take some considerable time before an FTA amongst BIMSt-EC finally materializes. The said press report, however, has conveyed a false impression that perhaps the Free Trade Agreement was in operation. Although a comparison of the concession available under SAFTA and those likely to be made available under BIMST-EC-FTA can be correctly made only after the later Agreement is put into operation, the LDCs of SAARC i.e. Bangladesh, Bhutan, Nepal and Maldives may prefer trade under SAFTA.
Under SAFTA tariffs for them would be reduced to 0-5% in three years and they can also avail the facility of revenue loss compensation. Besides, they have more relaxed Rules of Origin as compared to the Rules of Origin being negotiated under BIMST-EC. Apart from Regional Arrangements; bilateral FTAs in South Asia, and their relations with SAFTA and BIMST-EC have not been understood or even mentioned by the correspondent. Pakistan has an operational Free Trade Agreement with Sri Lanka and is making efforts to have a similar Agreement with Bangladesh and Nepal. On the other hand, India has also entered into a Free Trade Agreement with Sri Lanka, and has a Special Trading Arrangement with Nepal.
Simultaneously India has an Early Harvest Programme with Thailand and is negotiating a bilateral FTA with Thailand. These bilateral Agreements provide deeper concessions than SAFTA with lesser phase out period of tariff. Pakistan’s Trade Diplomacy is very active in South Asia to retain the existing share and increase our market share in these economies.
As regards Indo-Pakistan trade; Pakistan has gradually liberalized trade with India and just recently 203 new items have been made importable from India. The economic relations between the two countries are definitely linked with the political reality and cannot be viewed in isolation.