Implementation of WTO rules with effect from January
1, 2005 is likely to promote tremendous cooperation among the regional
countries especially in the textile trade which is the mainstay of
Since Pakistan is a major producer and supplier of
cotton textile especially grey cloth and cotton yarn to the neighboring
countries especially Bangladesh and Sri Lanka. The removal tariff and
quota barriers with the implementation of WTO rules these trade ties in
the textile sector are likely to further grow not only with Bangladesh
and Sri Lanka but the trade circle is going to widen with India,
Malaysia and Indonesia as well. However the immediate beneficiary of the
trade cooperation seems to be Sri Lanka as the Free Trade Agreement has
almost reached to its final stage and probably it will be signed in the
first month of 2005. There are indications that besides promotion of
trade ties and increase in two way trade volume between Sri Lanka and
Pakistan, there is ample scope for joint ventures in the textile sector
between the two countries.
Pakistan has offered to help Sri Lanka's garment
industry to improve its backward integration efforts by supplying yarn,
as it gets ready to face the challenges posed by the phasing out of the
textile quota system at the end of this year.
"We will certainly want to support Sri Lanka by
way of promoting garment industry joint ventures between Sri Lankan
industrialists and Pakistani yarn producers which would enable the two
countries to continue together as industry leaders," said Pakistan
High Commissioner in Sri Lanka, Bashir Wali Mohammed.
Sri Lanka has facilities to manufacture fine-finished
products, but the garment industry imports many of its raw materials
while Pakistan has a large raw material industry.
According to reports coming from Sri Lanka, the
Pakistan High Commissioner has said "If the two countries put their
strengths together — Sri Lanka's experience and our backward
integration facilities in a giant joint venture, the two countries
together can remain as one of the major garment exporters in the
"I strongly recommend a giant joint venture in
this industry and we need to make a concerted effort to realize this
project. We are quite happy to help Sri Lanka in anyway," said
Bashir Wali Mohammad.
Pakistan is one of the leading yarn producers in the
world and it is also one of the major cotton producers in this part of
the world along with China and India. At present it exports yarn to
countries such as Japan, Korea and the US. High Commissioner said that
their raw material is available in the market more than the finished
The two countries, which are enjoying excellent
diplomatic relations are set to launch a Free Trade Agreement (FTA)
early next year and are hoping to further strengthen their trade
relations. An agreement had already been signed to have a FTA between
the two countries during the Pakistan President Pervez Musharraf's visit
to Colombo two years ago.
"Within the SAARC region, Sri Lanka stands out
as a close friend of Pakistan," he said. Referring to Pakistan
Prime Minister Shaukat Aziz's recent visit to Sri Lanka, he said it was
a very successful visit and he held fruitful talks with many officials
in Sri Lanka.
Pakistan holds the current Chairmanship of SAARC. The
Chairmanship will be passed to Bangladesh during the next SAARC Summit
to be held in Dhaka in February 2005.
Prime Minister Shaukat Aziz recently visited Sri
Lanka as it is customary for the current Chairman to visit the SAARC
countries prior to the main summit and to extend an invitation for next
Though the Prime Minister visited Sri Lanka as the
Chairman of SAARC, there were several other issues which were discussed
with Sri Lankan leaders and Government officials at the highest level.
One of the major areas for discussion was the
agreement to exchange convicted prisoners between the two countries —
a treaty was signed in this regard soon after the PM's visit. Currently,
there are 40 Pakistanis in Sri Lankan jails and two Sri Lankan in
"We have looked into the human rights of the
prisoners and decided to exchange them into the jails in their own
countries so that at least, their families could visit them.
According to the treaty, only the convicted prisoners
would be exchanged and their jail terms would be served in their
respective countries. Those who are under trial will stay on till the
legal procedure is completed," he said.
"Pakistan suggested this to the Sri Lankan
Government on humane grounds. Sri Lanka already had such an agreement
with the UK while Pakistan also has such agreements with many countries
including the US and UK," the High Commissioner added.
Pakistan has tough laws and severe punishments to
fight drug trafficking. "We don't want to pardon any drug
traffickers if there are any among the offenders. We have a very strong
and effective unit headed by a General serving in the Army to handle
During the last two years, the two countries had been
trying to finalize their lists of items for the proposed FTA. The main
reason for the delay in launching the agreement was the desire by both
countries to protect their agricultural products.
There were issues with certain products such as tea,
potato and onions. Sri Lanka wanted a substantial quota for tea. At
present Pakistan, which is one of the major tea consuming countries in
the world, imports most of its tea from Kenya.
"We used to get tea from Sri Lanka. But for some
reason it didn't continue. However, I am convinced that Sri Lankan/Ceylon
tea is much better in taste. We have had many discussions over the tea
issue and now I am positive that FTA will offer a major concession for
Ceylon tea imports," he said.
As far as Pakistan's list is concerned, the problems
occurred with the rice, potatoes and onions.
"Sri Lankan consumers mostly use Samba, but
Pakistan does not produce that rice at all. We can send IRRI-6, the rice
which was sent to Sri Lanka recently to make up for a shortage of rice
in the local market.
Pakistan sent 2,000 tonnes of rice on a request by
the Trade Minister," he said. Pakistani officials took prompt
action to send the rice within 10 days.
According to High Commissioner, IRRI-6 is a better
version and may be better than Samba. Yet it is cheaper in price.
"So we have asked Sri Lanka to allow us to
export IRRI-6, under the FTA. As far as Basmati is concerned it is a
very negligible number of people who can afford to purchase it.
There are other varieties of rice similar to Basmati
in the local market. Our view is that Sri Lanka should allow us to
compete with them. It is nothing to do with your agricultural products.
Sri Lanka does not produce Basmati — so it won't be a problem for your
farmers," he said.
The next issue is with onion and potato imports under
the FTA. "We have good quality onion and potato which we can export
during the off season in Sri Lanka, as we know Sri Lanka is not
self-sufficient in onions and potatoes.
You import them from other countries. Our entry into
the market will ensure a better price for the consumer. However, when
your crop is available in abundance, you can impose taxes on these
items," he said.
Other major items in the list include pharmaceutical,
industrial products, textiles and yarn. Referring to surgical items
imported by Sri Lanka at present, he said: "Sri Lanka imports them
from Germany although they are being manufactured in Pakistan. When Sri
Lanka has the opportunity to directly import the same product from
Pakistan at a lower price, they get it from Germany at a higher
However, the final decision on these items will be
worked out after another session of meetings due to be held in Colombo
on December 21 and 22 and is expected to finalize the lists before
January as the two countries are planning to make an announcement on the
launch of the FTA in January in Pakistan during President Chandrika
Bandaranaike Kumaratunga's visit to that country.
Pakistan has also increased the number of
scholarships given to Sri Lankan students in Pakistani universities.
"We have increased the number of scholarships to 16 from 8.
In addition, students who could find their own funds
will be considered for placements in Pakistan's universities. They have
the opportunity to study any subject of their choice — including
medicine, IT and engineering.
There are plans to exchange delegations in arts and
culture in the near future in order to strengthen the cultural ties
between the two countries. Pakistani Tourism Minister and the Culture
Minister are due in Sri Lanka early next year.
With regard to tourism between the two countries, the
numbers have increased over the last year, owing to continuous
promotions and the resumption of direct flights between the two
There's a significant increase in tourists traveling
to both countries. This is a positive sign to say that we have begun a
new journey in our tourism relationships.
At the same time many Pakistani business, IT,
educational and trade delegations visiting Sri Lanka in the recent past
which is an indicator of the increasing trade links.
Both our countries have wonderful climates and many
beautiful sites to visit and every traveler would have something of
their own to enjoy in both countries. Currently both national airlines
— Sri Lankan Airlines and Pakistan International Airlines fly between
the two countries several times a week.
The open heart support extended by Pakistan in the
hour of the need when the tsunami had played havoc around the coastal
belt of Sri Lanka killing thousands of Sri Lankans just in one day in
the aftermath of the tsunami. The friendly gesture on the part of
Pakistan has won the heart of the people in that country, reports said.
In fact, the joint venture between Sri Lanka and Pakistan can be of
mutual benefits of the two countries especially for joint efforts in
marketing of the products of the countries.