Building on the immense success of last year’s inaugural Single Country Exhibition, the Trade Development Authority of Pakistan (TDAP) in partnership with the Pakistan High Commission in Sri Lanka recently announced the launch of a new, larger and even more diverse exhibition which is geared to kick off at the BMICH from the 13th-15th January 2017, featuring several renowned Pakistani companies spanning textile, agro, engineering, marble and granite, handicrafts, garments, accessories and jewellery.
Elaborating on current bilateral trade dynamics and expectations for the future, Trade Development Authority of Pakistan (TDAP) CEO, S. M. Muneer provided a few crucial insights into what he views as vibrant opportunities for growth moving forward. Having previously served as the Chairman of one of Pakistan’s leading exporters of value added yarns and recipient of the award for the ‘Best Businessman of the Year’, the highest award from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). Following are excerpts:
Q: What are the most recent statistics with regard to bilateral trade between Sri Lanka and Pakistan?
According to our most recent information, in 2015-16 Pakistan exported goods worth approximately US$ 247.145 million to Sri Lanka as compared with US$266.908 Million in 2014-15.Meanwhile, when we consider Pakistani imports from Sri Lanka we were US$74.585 Million in 2015-2016 as compared to 57.801 Million in 2014-15
Q: Do you feel that this is an optimal trade balance and if not what are some of the inhibiting factors?
Unfortunately I would say that there appears to still be some misconceptions in both countries about the trade potential and at the moment it would appear that neither country views the other as a priority market, as compared with their primary trading partners and despite the abundance of opportunities. Absence of regular visits of trade delegations and single-country exhibitions has led to sub-optimal business links between business communities of the two countries and this is a critical factor that we hope to work more closely with our Sri Lankan counterparts and companies to improve upon.From a Pakistani perspective, one of the major complaints that our exporters have expressed to us is the continuing lack of opportunities for interaction and exposure to the Sri Lankan market and Sri Lankan businesses. This is another challenge that we are working to address but it certainly has affected the ability of both sides to identify more opportunities, communicate those opportunities to each other and thereby strengthen and expand current partnerships while forging new, mutually beneficial relationships.
Q: Has bilateral trade been increasing or decreasing in recent years between Pakistan and Sri Lanka and what impact does the Free-Trade Agreement had on these dynamics?
After signing of FTA between Pakistan and Sri Lanka Pakistan’s exports to Sri Lanka grew from USD 154 million in 2004 to USD 316 million in 2013. However, Pakistan could only claim 1.7% of total Sri Lankan imports from the world in 2013. Sri Lanka’s exports to Pakistan grew from USD 46 million to USD 63 million between 2004 and 2013, and Sri Lanka claimed only 0.14% of total Pakistani imports from the world in 2013. More recently our exports have decreased to US$ 247.145 Million in 2015-16 while import from Sri Lanka increased to US$ 74.59 and there are certainly encouraging signs that these engagements are gaining greater momentum however, given the remarkable synergies that we see between our two nations, we remain convinced that we have barely scratched the surface in terms of our bilateral trade relationships, particularly given the FTA.
Q: What are the key imports that Pakistan gets from Sri Lanka and what are some of the major exports from Pakistan to Sri Lanka?
Top Sri Lankan exports to Pakistan include vegetable products, rubber, fibreboard and coconut products while we have been able to build a small but vibrant set of exports based primarily around cotton products, cement, refined sugar and potatoes.
Q:Do you believe that the free trade agreements and other trade relationships between Sri Lankan and Pakistan are being efficiently utilized?
Pakistan and Sri Lanka have the potential to increase bilateral trade over six times from the current $247 million to $2.7 billion by just effectively utilizing their Free Trade Agreement (FTA).
Pakistan and Sri Lanka signed a Free Trade Agreement in July 2002 and it became operational in June 2005. The terms of the FTA were comprehensive and granted 100% immediate concession to major Pakistani exports such as cotton and cement and major Sri Lankan exports such as rubber and coconut products. By 2010 both countries were required to have removed tariffs on all items barring those listed in their respective no-concession lists or those facing Tariff Rate Quotas (TRQ). Given these facts, I would say that at present there is still a tremendous amount of untapped potential available companies and entrepreneurs from both nations.
Q:What more can be done to improve bilateral trade between the two nations?
I think the first step is always the most difficult one and that is to facilitate meaningful and lasting trade relationships by establishing the initial links between our corporate sectors. In that regard there is certainly a lot more that can be done from both sides to improve trade such as through the frequent exchange of trade delegations and holding of single-country exhibitions to lay the groundwork for stronger trade ties. In that context we would also urge the two countries to come to an agreement for the grantingof on-arrival visas to facilitate and streamline interactionsnecessary to boost trade.
Q: What is your outlook for the Sri Lankan economy moving forward?
Like Pakistan, Sri Lanka too has seen its share of ups and downs however we are very encouraged by the pace of growth in Sri Lanka, particularly in recent years. Today we say more investments coming into Sri Lanka and the Government is continuing to place significant emphasis on attracting even greater FDIs in future.
We are also encouraged by Sri Lanka’s move to develop its capacities as a logistical hub and we see tremendous potential for mutually beneficial trade synergies resulting from this. Combined with ambitious infrastructure programmes and impressive performances in niche segments, we believe that the overall outlook for the Sri Lankan economy is very positive and if these reforms continue to be implemented, then in my estimate, Sri Lanka is on the right track for sustainable growth.
Q: Given the above, what is the significance of this year’s Single Country Exhibition?
As you know, we first held the Pakistan Single Country Exhibition last year and almost immediately we saw a massive surge in inquiries from companies and entrepreneurs in both countries. There was a lot of excitement generated for our companies simply through this preliminary access to the Sri Lankan market and similarly, many Sri Lankan businesses quickly realized the untapped potential that exists. I would therefore say that The Single Country Exhibition is an absolutely vital platform from which to showcase Pakistani businesses in the local market and in so doing, we also create significant opportunities for spot selling and perhaps more importantly, B2B meetings between buyer and sellers. Even last year we quickly saw new business relationships being formed at the exhibition itself and we are greatly encouraged to see that some of those engagements have already been consolidated into rapidly growing business ventures and we anticipate similar reactions on a larger scale for 2017.