Pakistan and Turkey on Friday signed the Preferential Trade Agreement (PTA) aimed at boosting trade in goods between the two countries.
Prime Minister Shehbaz Sharif witnessed the inking of the PTA at a ceremony held at the PM Office, as the visiting Turkish Trade Minister Dr Mehmet Mus and Minister for Commerce Syed Naveed Qamar signed the accord.
Commonly known as the 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 termed the agreement “a great moment and a milestone” in the brotherly and historic relations between Pakistan and Turkey.
He recalled that following his official visit to Turkey in May, the untiring efforts of the ministries of both sides resulted in the signing of the agreement.
The premier added that immense business opportunities existed between the two countries and expressed confidence that the accord would further explore the trade avenues in diverse sectors.
The PM also said Pakistan would continue to work with Turkey on strengthening bilateral ties.
Trade Minister Dr Mehmet said the occasion marked a significant milestone which would contribute in a long way to further strengthening and expansion of trade ties.
He said that meeting the expectations of all stakeholders was not easy but dedication and step-by-step measures led to the conclusion of the accord.
The Turkish minister also thanked PM Shehbaz for his leadership to seal the agreement for the betterment of the two countries and enhancing linkages between their business communities.
Qamar hoped the PTA between Pakistan and Turkey would open up new opportunities to boost bilateral trade across various sectors.
He said Pakistan also looked forward to working towards materializing a Free Trade Agreement (FTA) with Turkey.
The trade minister stressed the need to increase business-to-business interaction for strengthening trade and investment relations between the brotherly countries.
A key highlight of the trade concessions offered by both sides under the agreement is that Turkey had offered concessions to Pakistan on 261 tariff lines, which include key items of Pakistan’s export interest to Turkey from both agriculture and the industrial sectors.
Pakistan and Turkey enjoy historical relations, which are growing in different domains including political, defence, culture and education.
However, realizing that economic engagement, especially trade, required concentrated steps to improve bilateral relations, the Framework Agreement between Pakistan and Turkey was signed in 2016 by the Turkish Minister of Economy, Mustafa Elitas and Minister of Commerce Engineer Khurram Dastagir.
The agreement laid the ground for a gradual liberalization of goods, services, and investment by establishing a Free Trade Area.
Under the ambit of the agreement, a Joint Scoping Study was conducted to identify the areas in which both sides can make progress in reducing tariff barriers to trade.
Turkey highlighted its sensitivity in the textile sector whereas Pakistan highlighted its sensitivities in various sectors such as auto, iron and steel, processed agriculture, dairy, value-added textile, and specific products in the chemical, plastics, and white goods.
Negotiations on Pakistan-Turkey Preferential Trade Agreement (PTA) remained slow-paced until Prime Minister Shehbaz Sharif’s recent visit to Turkey from May 31 to June 2, 2022.
During the visit to Turkey, Qamar and Dr Mus inked a joint Ministerial Statement to conclude the Trade in Goods Agreement based on mutual benefit between the two countries.
The Trade in Goods Agreement will help achieve the strategic goal of bilateral trade of $ 5 billion in the medium term.
After 19 rounds of bilateral negotiations, the agreement was finalised to be signed on August 12.
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 market access in 261 tariff lines. Pakistan’s global export of these products is $5.1 billion. Turkey's global import of these products is $7.6 billion.
Pakistan has offered concessions to Turkey on 130 tariff lines. Turkey's global export of these products is $23 billion (12% of Turkish global exports). Pakistan’s global import of these products is $6 billion.
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.
Pakistan-Turkey bilateral trade
The total trade between Pakistan and Turkey stood at $883 million in the fiscal year 2021-22 with Pakistan’s exports to Turkey amounting to $366 million and Pakistan’s imports from Turkey amounting to $517 million. The balance of trade is in favour of Turkey with a negative trade balance of $151 million in 2021-22.