Pakistan and Turkiye on Friday inked a Preferential Trade Agreement (PTA) aimed at boosting trade between the two countries.
Prime Minister Shehbaz Sharif witnessed the signing of the PTA at a ceremony held at the Prime Minister’s Office in Islamabad. Turkish Trade Minister Dr Mehmet Mus and Minister for Commerce Syed Naveed Qamar signed the accord.
Commonly known as Trade in Goods Pact, the PTA includes comprehensive provisions on bilateral safeguards, balance of payment exceptions, dispute settlement, and periodic review of the agreement.
Prime Minister Shehbaz in his remarks termed the agreement “a great moment and a milestone” in the historic relations between Pakistan and Turkiye.
He recalled that following his visit to Turkiye in May, the untiring efforts of both countries’ ministries resulted in the signing of the agreement.
He said immense business opportunities existed between the two countries and expressed confidence that the accord would help further explore trade avenues in diverse sectors.
The prime minister said Pakistan would continue to work with Turkiye on strengthening bilateral ties.
Turkish Trade Minister Dr Mehmet Mus said the occasion marked a significant milestone that would contribute to further strengthening and expanding trade ties.
He said meeting the expectations of all stakeholders was not easy. However, he added that dedication and step-by-step measures led to the conclusion of the accord.
He thanked PM Shehbaz for his leadership that led to the agreement’s finalisation for the betterment of the two countries and for enhancing linkages between their business communities.
Meanwhile, Minister for Commerce Syed Naveed Qamar hoped the PTA between Pakistan and Turkiye would open up new opportunities to boost bilateral trade across various sectors.
He said Pakistan also looked forward to working towards a Free Trade Agreement (FTA) with Turkiye.
He stressed the need to increase business-to-business interaction for strengthening trade and investment relations between the countries.
Turkiye has offered concessions to Pakistan on 261 tariff lines, which include key items of Pakistan’s export interest in both the agriculture and industrial sectors.
The PTA will help to achieve the strategic goal of bilateral trade of $5 billion in the medium term.
Both sides agree that once the initial agreement creates goodwill and economic gains, both sides can move towards a more comprehensive arrangement.
Under the PTA, Pakistan has got market access to 261 tariff lines. Pakistan’s global exports of these products are $5.1bn. Turkiye’s global imports of these products are $7.6bn.
Pakistan has offered concessions to Turkiye on 130 tariff lines. Turkiye’s global exports in these products are $23bn (12 per cent of Turkiye’s global exports). Pakistan’s global imports of these products are $6bn.
Pakistan has gained market access in traditional sectors such as leather, rice, dates, mangoes, cutlery, and sports goods; and non-traditional sectors including seafood, processed agricultural products, rubber tubes and tyres, plastics, and engineering goods.
The framework agreement between Pakistan and Turkiye was signed in 2016, by the then Turkish minister of economy Mustafa Elitas and Pakistan’s then minister of commerce Khurram Dastagir.
The framework agreement laid the ground for gradual liberalisation in goods, services, and investment by establishing a Free Trade Area.
Under the ambit of the framework agreement, a joint scoping study was conducted to identify the areas in which both sides can make progress in reducing tariff barriers to trade.
The total trade between Pakistan and Turkiye stood at $883 million in the fiscal year 2021-22 with Pakistan’s exports to Turkiye amounting to $366m and Pakistan’s imports from that country amounting to $517m. The balance of trade is in favour of Turkiye with a negative trade balance of $151m in 2021-22.