FREE TRADE AGREEMENT WITH SINGAPORE
It is high time that Pakistan should have much stronger and active trade relations with the active economies in this region
By AMANULLAH BASHAR
Mar 29 - Apr 04, 2004
Pakistan, which has recently entered into an arrangement for Free Trade Agreement (FTA) with neighboring India on the occasion of SAARC Summit, held in Islamabad in the first week of the first month of the current year. This FTA would come into force by 2006. However, prior to implementation on FTA with India, it is wise to get ready for the challenges for the economy in the coming years especially after implementation of WTO rules in 2005.
It is high time that Pakistan should have much stronger and active trade relations with the active economies in this region to tune our business community with the new environment. So far, it is harsh reality that our business was moving under umbrella of protection provided by the government.
The Federal Minister for Commerce, Humayun Akhtar has taken a bold step by suggesting Singapore for an agreement of free trade between the two countries. Singapore, every body knows has established and grown its economy impressively which speaks in the volume of trade that country has in the world market.
Singapore, which has become a hub of trade in the region, responding to the proposal of the commerce minister has expressed willingness to negotiate a free trade agreement (FTA) with Pakistan.
The offer is the outcome of the discussion between Humayun Akhtar Khan, the Federal Minister for Commerce and George Yeo, Minister for Trade and Industry Singapore recently.
Though Singapore and Pakistan were significant economies of the region, the quantum and diversity of bilateral trade between the two countries did not commensurate with the existing business potential.
In this connection, the government of Singapore has decided to send a ministerial mission to Pakistan later this year to further the talks on this concept. Prior to the ministerial mission, a two-member delegation of the International Enterprise (IE) Singapore, the investment and trading arm of the ministry of trade and industry, will be undertaking a trip to Pakistan in the first week of next month.
The objective of the forthcoming visit of the two member delegation is to get a feel of the Pakistani market for trading and investment. During the visit, the delegation will meet the concerned government officials, to understand trade laws and practices, operations at Export Processing Zone, investment and privatization procedures and also to have detail discussions with different trade bodies in the private sector including Federation of Pakistan Chambers of Commerce and Industry and individual Chamber of Commerce and Industry of major cities in Pakistan.
The Export Promotion Bureau (EPB) would facilitate and arrange meetings of the Singapore delegation with the relevant quarters both in the public and private sector in Karachi, Lahore and Islamabad.
The federal minister for commerce feels that the ministerial delegation's visit to Pakistan would provide an excellent opportunity to appreciate the favorable business environment in Pakistan whereas officials and entrepreneurs from both sides would be able to have useful interaction to augment bilateral trade.
From Pakistan, there is a potential for enhanced exports of rice, fish and fish preparations, fruits and vegetable, petroleum and petroleum products, cotton fabrics, cotton yarn, synthetic fabric, textile made-ups to the Singaporean markets, whereas an increased import of chemicals, oil seeds, palm oil, machinery and other finished goods from Singapore was also possible.
Practically speaking, the role of third country trade plays a significant role in Pakistan, especially Dubai which is used for import and export of goods from the countries like India with we had to free trade so far. With the access of the Singapore market, the trade in Pakistan would be getting a strong launching pad for re-exporting its goods in the countries where our business lags on different accounts.
A free trade agreement with Singapore, it is said, would also help promoting our IT industry which could not attain a desired level of growth especially in the export sector. Experts in the IT sector feel that since Singapore has become a major supplier of IT accessories plus, the improved relation could be used for improving pace of growth of the IT industry in Pakistan. It may be mentioned that India over the years has elevated its IT industry to the level of IT related exports which jumped to $13 billion a year. On the other hand, despite all tall claims made by the IT experts in Pakistan, our export in this specialized sector is not even $50 million. Our youth has great potential, but they are denied access to the knowledge because of exorbitantly high cost of professional education especially in the Information Technology. The time calls for a strong public-private sector partnership investment in the market potential sectors impart professional knowledge to our youngsters at the cheapest cost to harvest a rich crop in future. Going for immediate profits would neither serve the investors nor the country, because it is always a short-lived phenomenon.