Sri Lanka and Pakistan ink bilateral agreements worth over US $ 700mn
06 Jan 2016 - {{hitsCtrl.values.hits}}
By Chandeepa Wettasinghe
Sri Lanka and Pakistan signed a number of memoranda of understanding valued over US$ 700 million yesterday during the launch of the Pakistan Single Country Exhibition, coinciding with the state visit of Pakistan Prime Minister Nawaz Sharif.
“We hope that the Memorandum of Understanding signed between the Trade Development Authority of Pakistan and Sri Lanka’s Export Development Board will help expand bilateral trade between the two countries,” Sharif said.
In addition to the MoU between the two governments, the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) and the Aman Centre for Entrepreneurship of the Institute of Business Administration in Karachi was also signed.
Sri Lanka’s Granada Suppliers Pvt. Ltd and Pakistan’s Paidar Trading (Pvt) Ltd signed an MoU to co-operate in shipping, while Granada Suppliers signed another agreement with Pak Hy-Oils Ltd to set up a lubricant blending plant in Sri Lanka.
Sri Lanka’s Granada Suppliers Pvt. Ltd and Pakistan’s Paidar Trading (Pvt) Ltd signed an MoU to co-operate in shipping, while Granada Suppliers signed another agreement with Pak Hy-Oils Ltd to set up a lubricant blending plant in Sri Lanka. Sri Lanka’s Maxton Holdings (Pvt) Ltd signed an MoU with Pakistan’s Paidar Energy (Pvt) Ltd to develop a hydro power project in Pakistan, while Sri Lanka’s Eagle Power (Pvt) Ltd also signed an MoU with Pakistan’s Stellar Rock (Pvt) Ltd for the same purpose.
Pakistan’s Gharibwal Cement Ltd, the parent company of the Paidar Group also signed an MoU with Maxton Holdings to set up a cement plant in Sri Lanka.
Further, Lanka Business Consortium Private Limited and Pakistan’s HKH Enterprises Pvt Limited signed an MoU on deep sea fishing in Pakistan, while Almar Trading Pvt Limited of Sri Lanka signed an MoU with M/S Service Pvt Limited to set up a shore manufacturing plant in Sri Lanka. “We are also examining the possibility of setting up a joint investment company and a currency swap agreement with Sri Lanka,” Sharif added.
Meanwhile, Sri Lanka’s Prime Minister Ranil Wickremesinghe pointed out that while political ties with Pakistan are strong as ever, the bilateral trade between the countries are weak.
He said that this is despite documents saying that the oldest recorded maritime trade in the region being between Sri Lanka and merchants from the Middle East who used ports situated in land now belonging to Pakistan.
He went on to say that ministerial working groups of the two countries will meet in 6 months to discuss trade promotion, with the Sri Lankan working group comprising of the Minister of Development Strategies and International Trade, the Minister of Finance and the Minister of Industry and Commerce.
“We have been the heart of trade in the world until the 17th century. We were the richest region in the world; not East Asia, not Europe or America. This is the heritage which we seem to have forgotten, because we have forgotten the importance of capital and trade in developing a country,” he added.
He requested the Sri Lankan private sector to take more risks to help develop the country.
Pakistan Single Country Exhibition
The Pakistan Single Country Exhibition will be held from January 15-17 January at BMICH featuring over 400 stalls from over 100 Pakistani conglomerates showcasing Pakistani-made products. “This is about understanding Pakistan; what defines and makes us who we are,” Trade Development Authority of Pakistan Secretary Rabiya Raveri Agha said.
She added that the products exhibited will be from a variety of industries, ranging from handicrafts, to automobiles to garments.
Pakistan Minister of Commerce Khuraam Dastagir Khan said that the significance of the exhibition, and trade with Sri Lanka are important, as the first Pakistan Single Country Exhibition had been held in Sri Lanka, and Pakistan’s first Free Trade Agreement was also with Sri Lanka.
Meanwhile, Sharif invited Sri Lankan businesses to also hold similar exhibitions in Pakistan.
“We also invite Sri Lankan companies to take part in any exhibition organized by TDAP in Pakistan,” he added.
Inclusion of services to trade pact
REUTERS: Sri Lanka and Pakistan have agreed to include services in a bilateral free trade agreement (FTA), Pakistani Prime Minister Nawaz Sharif said.
India has been in discussion with Sri Lanka to liberalise the service sector under a trade pact for a Comprehensive Economic Partnership Agreement (CEPA) since early 2000.But Sri Lankan entrepreneurs have strongly opposed the such an agreement with India saying they would be at a disadvantage and could be forced out of businesses.
“The two countries have agreed on the inclusion of services and investments chapters in the bilateral FTA,” Sharif, who is visiting Sri Lanka, said after overseeing the signing of eight bilateral agreements. They signed their FTA in 2005.
“This would enable our companies to form joint ventures for export to third countries.”
The volume of trade between Sri Lanka and Pakistan has been estimated at about $325 million a year. Sharif said both South Asian countries had agreed to re-invigorate efforts to reach a target of $1 billion “at the earliest”.
Trade between Sri Lanka and India is an annual $4.7 billion, but a CEPA could boost that much higher with Indian investment coming into Sri Lanka’s service sector, economists say.
Successive Sri Lankan governments have rejected India’s request to sign a CEPA, but Sri Lankan Prime Minister Ranil Wickremesinghe last month promised to sign an economic and technology cooperation agreement with India and China.
Political analysts say any move to liberalise service to Pakistan ahead of India could put a strain on relations between Sri Lanka and its big neighbour, which could have costs for Sri Lanka.
“India is more important for Sri Lanka diplomatically and security wise than Pakistan,” said Terrene Purasinghe, senior lecturer in Political Science at the Sri Jayewardenepura University.
Subashini Abeyasinghe, Senior Researcher at Verite Research, said she saw limited business opportunities for Sri Lanka and Pakistan because of political and security problems in Pakistan.
“The current political security concerns make Pakistan less attractive,” Abeyasinghe said.
Many Indian and Pakistan companies such as India’s oil giant Indian Oil Corporation and Pakistan’s Thatta Cement Company have invested in Sri Lanka.
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