According to sources within the ministry of commerce, a draft of the agreement has been formulated and an offer list consisting concessionary custom duties has been prepared for each country except for Iran. After receiving the offer list from Iran, the draft of the trade agreement will be sent to the federal cabinet for approval.
Sources indicated that Pakistan had presented an offer list recently at a D-8 (Developing Eight) meeting in Istanbul and textiles are among items on which concessionary duties will apply.
The D-8 countries include Pakistan, Turkey, Iran, Egypt, Nigeria, Malaysia, Indonesia and Bangladesh. With the exception of Bangladesh, all countries will reduce rates on products by as much as eight per cent within the next four years. The reduction will be carried out in equal portions annually.
Duties which are currently between 10 and 15 per cent will be reduced to 10 per cent, those between 15 and 20 per cent will be cut to 15 per cent, duties between 20 and 25 per cent will be slashed to 20 per cent and duties above 30 per cent will be reduced to 25 per cent.
Bangladesh is the only country that will have eight years to implement these changes since it is categorised as a Least Developed Country (LDC). After the implementation of the trade agreement, exports from Pakistan to these countries should increase by $1.5-2 billion annually, according to sources.
Importing at a lower cost will slash production costs for industries and the country will be able to import those commodities that it cannot produce locally, said sources, adding this should lead to a decrease in the overall price level.
The agreement has been in the works since 2004 but a draft of the agreement is finally reaching completion, sources said.
Published in The Express Tribune, October 20th, 2010.
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