ISLAMABAD: Pakistan and Thailand have agreed on the Terms of Reference (ToRs) and the framework to begin negotiations on Free Trade Agreement (FTA) between the two countries.
This was stated by Pakistan Commerce Minister Khurram Dastgir and Thai Minister for Commerce General Chatchai Sarikulya at the end of a two-day visit of the Thai trade delegation.
“Pakistan and Thailand have agreed to launch negotiations for a comprehensive FTA which will initially cover trade in goods and subsequently trade in services,” said Dastgir, addressing a joint press conference.
He said the initiative was part of Pakistan’s strategy to deepen trade and investment linkages with Southeast Asian economies that are among the fastest growing in the world.
“Since 2013, the matter had been under discussion and we have been working on increasing the bilateral trade, which has huge potential for both countries,” said commerce minister Dastgir.
He added that the two countries had also agreed to play their role in facilitating each other in their respective regions. “Pakistan would facilitate trade for Thailand in South and Central Asian countries whereas Thailand will play its part in finding opportunities for Pakistan in the Asean region.”
“During the visits in 2013, leadership of both countries desired to double the trade volume by 2018,” said Dastgir, adding that this translated into the formulation of a Joint Trade Committee for government-to-government consultations and a Joint Business Council for interaction between the two private sectors.
On the product front, Thailand has comparative advantage in electrical and electronic appliances, machinery and components and automobiles. Pakistan, on the other hand, has advantage mainly in the production of cotton yarn and woven textiles, ready-made garments, leather products and other miscellaneous manufactured items like surgical instruments and sports goods.
“There also exists potential for boosting intra-industry trade between the two countries in several product segments, notably the knitted or crocheted fabrics, apparel and leather products,” said Dastgir.
“Both types of trade can benefit the two countries in terms of enhanced competition and efficiency, lower prices, improved product quality and variety,” he added.
Thailand has a comparative advantage in more than 1,000 commodities which constitute about 21% of Pakistan’s total imports worth around $45 billion. Pakistan, on the other hand, has comparative advantage in 684 commodities that constitute about 3% of Thailand’s total imports worth $225 billion.
“FTA with Thailand will be a stepping stone towards Pakistan’s greater integration with Asean, a dynamic market of 600 million people and a combined GDP of $2.4 trillion,” Dastgir concluded.
Published in The Express Tribune, August 14th, 2015.