ISLAMABAD, 10 February 2005 — Pakistan and Sri Lanka signed a free trade agreement here yesterday, which is expected to boost trade and serve as a model for similar accords among other South Asian nations, Pakistani Prime Minister Shaukat Aziz said.
“We believe that our FTA with Sri Lanka is a stepping stone for expanding economic relations between the two countries,” Aziz told a joint news conference with visiting Sri Lankan President Chandrika Kumaratunga.
“It will serve as a model for good bilateral relations between us and many countries in South Asia and beyond,” he said. Officials say negligible trade between Pakistan and Sri Lanka, both members of the seven-nation South Asian Association for Regional Cooperation (SAARC), would get a boost from the FTA. Aziz said bilateral deals should not affect trade talks between SAARC members, who are also pursuing a regional South Asian Free Trade Agreement to come into force from 2006, although postponement of the latest SAARC summit may delay implementation.
“These agreements in no way conflict with SAFTA. The SAARC process, we want to continue and expand and strengthen. Both would complement each other and our objective is to create more linkages and interdependencies,” Aziz said.
Pakistan and Sri Lanka on Wednesday signed a free trade pact, and leaders of the two countries called for a recently postponed summit of South Asian nations to be held as soon as possible.
Visiting Sri Lankan president also hailed the pact as a watershed in economic cooperation between their countries. “I am confident that my visit will give a new impetus to promote bilateral ties,” Chandrika told a joint news conference after their talks.
Bilateral trade between Pakistan and Sri Lanka was worth about $150 million last year. Agreements were also signed on agricultural cooperation, and the reciprocal granting of student visas without fees.
Both leaders said they supported early rescheduling of the SAARC summit that was called off in Bangladesh last week after India pulled out, citing recent political turmoil in Nepal. “The SAARC process should not be stalled due to this postponement and both countries will continue efforts to make SAARC an effective body,” Aziz said.
Pakistan is current chair of the seven-nation grouping that also includes India, Bangladesh, Bhutan, the Maldives, Nepal and Sri Lanka. India’s pullout from the summit raised fresh doubts about the viability of SAARC, and irked Pakistan and host Bangladesh.
