ISLAMABAD:
Turkey has offered concessions on 261 tariff lines to Pakistan under the Trade in Goods Agreement with the aim of achieving an annual bilateral trade value of $5 billion.
This development came following Prime Minister Shehbaz Sharif’s visit to Turkey about two months ago. Pakistan and Turkey had been in talks for several years to sign a trade agreement, but Turkish businessmen were not in favor of it.
Today, Ankara offered concessions to Islamabad on 261 tariff lines, which include key items of Pakistan’s export interest in both agricultural and industrial sectors.
Commerce Ministry officials said tariff concessions on these items would give Pakistani exporters better market access compared to major competitors such as India, China, Vietnam and Malaysia.
Out of the 261 tariff lines, Turkey proposed immediate zero duties on about 123 tariff lines (customs duty on agricultural products and additional customs duty on industrial products). However, for 92 tariff lines, the duties will be reduced to zero over a period of 5 to 10 years.
In the case of five tariff lines, Ankara offers a 50% duty reduction, while for 14 tariff lines, it offers a tariff quota.
In response, Pakistan offered Turkey concessions on 130 tariff lines. Of these, Islamabad offers immediate zero duties on only 16 tariff lines and for another 16 tariff lines the duties will be reduced to zero over a period of 5 to 10 years.
In the remaining tariff lines, Pakistan has offered a margin of preference ranging from 20% to 50%.
Previously, Turkey requested tariff concessions on 300 tariff lines, but Pakistan kept 170 goods in its sensitive list to protect domestic industry.
The Commerce Division, in a recent meeting, informed the cabinet that Pakistan and Turkey have historically enjoyed warm and cordial relations, encompassing political, cultural and security spheres. However, economic and commercial engagement with Turkey remained an area that required concrete steps to improve bilateral relations.
In order to improve the economic and commercial partnership, the two countries signed on March 22, 2016 “the framework agreement for the establishment of a free trade zone between Pakistan and Turkey”.
In the agreement, both sides reflected their commitment to gradually establish the Turkey-Pakistan Free Trade Area covering trade in goods. Bearing this in mind, the Ministry of Commerce told the cabinet that Pakistan has been engaged in intensive negotiations for the Trade in Goods Agreement with Turkey, in consultation with public and private sector stakeholders. .
The deal would be a significant breakthrough in economic relations between the two countries and was a key talking point during Prime Minister Shehbaz’s visit to Turkey from May 31 to June 2, 2022.
The agreement had been finalized for signature after 14 rounds of negotiations. Its final draft was reviewed by the Tariff Policy Council and the Ministry of Law and Justice.
Bilateral trade between the two countries has steadily increased over the years and stood at $882 million in the fiscal year 2021-22, up 17.8% from $749.12 million in FY21. In total trade, Pakistan’s exports to Turkey increased by 33.6%.
The agreement on trade in goods will be followed by deeper access to services and investment markets. The agreement will also help achieve the strategic goal of $5 billion in bilateral trade in the medium term.
The trade minister stressed that the agreement was reached on time.
The cabinet reviewed a summary titled “Agreement on Trade in Goods between Turkey and Pakistan” and gave its approval.
Published in The Express Tribune, July 28e2022.
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