Pakistan and Turkey sign preferential trade agreement

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ISLAMABAD:

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 in a ceremony held at the Prime Minister’s Office, as Turkish Trade Minister Dr Mehmet Mus and Trade Minister Syed Naveed Qamar signed the agreement.

Commonly known as the Pact on Trade in Goods, the PTA includes detailed provisions on bilateral safeguards, balance of payments exceptions, dispute settlement and periodic review of the agreement.

Prime Minister Shehbaz called the agreement a “great moment and milestone” in the brotherly and historic relations between Pakistan and Turkey.

He recalled that following his official visit to Turkey in May, the tireless efforts of the ministries of both parties resulted in the signing of the agreement.

The Prime Minister added that immense business opportunities existed between the two countries and expressed his belief that the agreement would further explore trade avenues in various sectors.

The Prime Minister also said that Pakistan will continue to work with Turkey to strengthen bilateral relations.

Trade Minister Dr. Mehmet said the occasion marks an important milestone that will go a long way towards strengthening and expanding trade ties.

He said it was not easy to meet the expectations of all stakeholders, but that dedication and incremental action led to the conclusion of the agreement.

The Turkish Minister also thanked Prime Minister Shehbaz for his leadership in sealing the deal for the good of both countries and strengthening the ties between their business communities.

Qamar hoped that the PTA between Pakistan and Turkey would open new opportunities to boost bilateral trade in various sectors.

He said Pakistan was also eager to work towards achieving a Free Trade Agreement (FTA) with Turkey.

The Minister of Commerce stressed the need to increase business-to-business interaction to strengthen trade and investment relations between the brotherly countries.

One of the main highlights of the trade concessions offered by the two sides under the agreement is that Turkey has offered concessions to Pakistan on 261 tariff lines, which include key items of export interest from the Pakistan to Turkey, both in the agricultural and industrial sectors.

Pakistan and Turkey have historical relations, which are growing in different fields including politics, defence, culture and education.

However, realizing that economic engagement, especially trade, required concentrated measures to improve bilateral relations, the Pakistan-Turkey Framework Agreement was signed in 2016 by Turkish Economy Minister Mustafa Elitas and the Minister of Commerce, Engineer Khurram Dastagir.

The agreement laid the foundations for a progressive liberalization of goods, services and investments by establishing a free trade area.

As part of the agreement, a joint scoping study has been conducted to identify areas where both parties can make progress in reducing tariff barriers to trade.

Turkey highlighted its sensitivities in the textile sector while Pakistan highlighted its sensitivities in various sectors such as automotive, iron and steel, processed agriculture, dairy products, value-added textiles and specific products in chemicals, plastics and white goods.

Negotiations on the Pakistan-Turkey Preferential Trade Agreement (PTA) remained slow 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 signed a joint ministerial declaration to conclude the agreement on trade in goods on the basis of mutual benefits between the two countries.

The agreement on trade in goods will contribute to achieving the bilateral trade strategic goal of $5 billion in the medium term.

After 19 rounds of bilateral negotiations, the agreement was finalized for signing on August 12.

Both parties agree that once the initial agreement creates goodwill and economic gains, both parties can evolve into a more comprehensive arrangement.

Under the PTA, Pakistan has market access in 261 tariff lines. Pakistan’s global exports of these products amount to $5.1 billion. Turkey’s global imports of these products amount to $7.6 billion.

Pakistan has offered concessions to Turkey on 130 tariff lines. World exports of these products by Turkey amount to 23 billion dollars (12% of Turkish world exports). Global imports of these products by Pakistan amount to $6 billion.

Pakistan has gained market access in traditional sectors like leather, rice, dates, mangoes, cutlery and sporting goods; and non-traditional sectors, including seafood, processed agricultural products, rubber tubes and tires, plastics and engineering goods.

Pakistan-Turkey Bilateral Trade

Total trade between Pakistan and Turkey stood at $883 million in FY 2021-22, with Pakistan’s exports to Turkey amounting to $366 million and Pakistan’s imports from of Turkey to 517 million dollars. The trade balance is in favor of Turkey with a negative trade balance of $151 million in 2021-22.


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