FREE TRADE AGREEMENT WITH SINGAPORE
Pakistan be provided same facility of GSP Plus as given to Sri Lanka and some other countries affected by Tsunami
From: KHALID BUTT Lahore
Nov 14 - 20, 2005
Pakistan and Singapore would go into the second round of talks on proposed Free Trade Agreement (FTA) by the end of November, PAGE has learnt.
The Ministry of Commerce officials said that Singapore was already concluding FTA with India and had started exploratory talks with Sri Lanka. The ministry officials said that FTA between Pakistan and Singapore had not yet made any progress whereas the latter had concluded FTA with India and had started exploratory talks with Sri Lanka.
The officials said that Singapore's trade with Pakistan touched 1.02 billion US dollars last year making it Singapore's 45th-largest trading partner. Talking about the probable areas of cooperation between the two countries the officials said that Pakistan was unable till yet in fully tapping the Singapore's markets. Pakistan had a great deal of potential in areas like infrastructure development, power, roads, telecommunications. The areas in which Singapore has a lot to offer range from electronics, pharmaceuticals to banking services - all these things will be of interest to a developing country like Pakistan.
The two countries had already signed a Comprehensive Economic Cooperation Agreement as they were now negotiating the FTA to give a boost to their trade ties for enhanced economic cooperation. Officials from Singapore and Pakistan concluded on Aug 27 the first round of talks over a possible free trade agreement, in Singapore. Pakistan had imported goods worth Rs16.032 billion in fiscal 2004-05 and Rs 25.109 billion during July-May period of the 2003-04 fiscal. Pakistan's exports to Singapore are negligible and the signing and operationalization of the FTA between the two countries would help increase exports from Pakistan to Singapore.
Imports from Singapore would be of semi-finished goods or parts of consumers goods that would help the local industry to assemble the goods for the local market or for export. These items would be imported at cheaper rates. As a result of this Pakistan would be able to compete in the local as well as international markets and the country would be in a position to increase its exports.
Pakistan would export raw materials and commodities to Singapore, and a new market for Pakistani exports would be tapped. Singapore is an active member of the Association of Southeast Asian Nations and it could be helpful in expanding Pakistan's trade with its neighboring countries.
Singapore has already proposed to Pakistan the draft of the proposed FTA and the second round of negotiations between the two countries. Trade experts from the two countries are focusing on the said draft and will try to finalize the modalities of the proposed FTA for the promotion of trade in desired areas.
"Pakistan is still a rather small trading partner of Singapore's. Pakistan produces cotton textiles, sugar, rice, etc and exports some of these products to Singapore, but it has a fairly good appetite for Singapore products and services and so relations between Pakistan and Singapore would probably grow over the time," officials said.
Pakistan's operating environment was very similar to that of India, Bangladesh and Sri Lanka, based on an Anglo-Saxon model very much like Singapore. The legacy of English Common Law exists in all these countries, but the legal system in these countries is a little more ponderous and slower than in Singapore. Also, it probably lacks the required skilled manpower which abundant in India.
Regarding the possibilities of the problem of a lack of skilled people the officials said that it's not entirely lacking, which did not have the same depth that India presents. They said that there was some sort of labor in virtually every level of skills in Pakistan.
Talking of the important considerations for a new investor, the officials said that Pakistan was a fairly fast-growing economy but infrastructure bottlenecks were certainly a bit of a problem.
Political stability over the medium and long-term was another issue that Pakistan was in a very volatile part of the world especially on its Western frontier where there was insurgent activity. "But it has an environment now which is very welcoming for foreign investors and so opportunities for businesses are growing", the officials added.