An Assessment of the Pakistan-Sri Lanka Free Trade Agreement
April, 2015
An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Although every effort has been made to cross-check and verify the authenticity of the data, of the authenticity made to cross-check and verify the effort has been Although every data included in this work. All data the Business Council does not guarantee Pakistan the 2015, and may be subject to change. and statistics used are correct as of 1 February, Any conclusions of analysis based on ITC, IDB, CTS, UNCTSD and WEO data are the Any conclusions of analysis based on ITC, or IMF WTO, opinion of the the reflect necessarily do not and author(s) responsibility of the UN. Disclaimer: The findings, interpretations and conclusions expressed herein are those of the of Members and Board of Directors of the views the reflect necessarily do not and author(s) Business Council or the companies they represent. the Pakistan Team Leader: Samir S. Amir Team Lead Researcher: Danish Hyder Acknowledgements: The PBC’s Member Companies
An Assessment of the Pakistan-Sri Lanka Free Trade Agreement An Assessment of the Pakistan-Sri Lanka Free Trade Agreement The PBC’s Member Companies 41 16 18 21 26 31 33 35 37 39 42 45 46 47 48 12 14 14 29 08 09 09 10 11 11 11 11 11 .… ...... Overview of Pak-Sri Lanka Trade ...... Lanka Trade Overview of Pak-Sri Overview of Pakistan’s Exports from the World and to Sri Lanka...... Exports from the World Overview of Pakistan’s Overview of Pakistan’s Imports from the World and from Sri Lanka…………...... Imports from the World Overview of Pakistan’s Analysis of Pakistan’s Exports to Sri Lanka ...... Analysis of Pakistan’s High Trade Potential, Favourable CAGR items with tariff advantage over India CAGR items with tariff advantage Favourable Potential, High Trade should CAGR items that Favourable Potential, High Trade ...... concessions ….. receive Tariff Two digit HS codes with High Trade Potential Potential digit with High Trade HS codes Two values ...... favourable CAGR and Potential digit with High Trade HS codes Two Comparison with India for high potential Pakistani products ………. Comparison with India for high potential Pakistani Items on Sri Lanka’s no concession list with Pakistan RCA advantage ……...... list with Pakistan Sri Lanka’s no concession Items on Pakistan Sri Lanka Free Trade Agreement: Brief Introduction ………...... Agreement: Brief Trade Sri Lanka Free Pakistan Short Economy Profiles ...... Top Trading Partners . Partners Trading Top Prelimanry Analysis of Pakistani Exports Analysis of Pakistani Prelimanry ...... to Sri Lanka Under FTA ... Overview ………………………………… Council: An Business The Pakistan ...... Findings ……………………………………………………………………… Key Comparison of Pakistan and India’s Trade with Sri Lanka . and India’s Trade Comparison of Pakistan . for trade ……………………………………… Lanka potential Overview of Pak-Sri . …………………………………………………….… Item Lists Trade High Potential ...... …………………………………………………………….… Recommendations ...... and Single Country Exhibitions Delegations Trade Agreement on changes to FTA terms ...... terms Agreement on changes to FTA Greater involvement of businessmen in drafting of FTA ...... in drafting of FTA Greater involvement of businessmen Forums for trade dispute resolution ...... Forums Study Objective 5.3. 5.4. 5.5. 7.0 7.1. ≥ USD 10 million Potential Trade 7.2. An Assessment of the Pakistan-Sri Lanka Free Trade Agreement An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 68 68 69 66 66 66 67 67 67 65 51 53 65 55 55 65 57 58 59 66 60 66 61 62 63 ...... ………...... terms Discussion before change in FTA Forums for efficient resolution of trade disputes ...... for efficient resolution Forums Plastics . …………………………………………………………………………………...... …………………………………………………………… Vegetables and Fruits Articles of Iron and Steel (Pipes) Trade Delegations and Single Country Exhibitions ...... Trade Increased involvement of businessmen in drafting of FTA . of FTA in drafting involvement of businessmen Increased General Concerns ...... General Preliminary Analysis of Sri Lankan Analysis of Preliminary ...... Under FTA to Pakistan Exports Lack of interest in Pak-Sri Lanka trade ...... Lack of interest in Pak-Sri ...... with Pakistan and China trade of Sri Lanka Comparison ...... Pakistan Lanka’s Exports To Analysis Of Sri .... terms …………………………………………… Unilateral changes made to FTA ... of FTA……………………… in drafting Insufficient involvement of businessmen High Trade Potential, Favourable CAGR items Favourable Potential, High Trade concessions …...... receive Tariff that should ...... ……………………………………… Lack of effective trade dispute resolution ...... …… Potential digit HS codes with High Trade Two Exporters Pakistani of Selected High Potential Views Two digit HS codes with High Trade Potential and favourable CAGR values ….... and Potential digit HS codes with High Trade Two Items on Pakistan’s no concession list with Sri Lankan RCA Advantage...... no concession Pakistan’s Items on 12.3. 12.4. 11.1. 11.2. 11.3. Recommendations 12.0 Recommendations 12.1. 12.2. 10.0 Section 4: Concerns and Recommendations Section 4: Concerns and 8.0 Section 3: Analysis of Sri Lanka’s Exports to Pakistan under FTA under Pakistan Exports to of Sri Lanka’s 3: Analysis Section 10.1. 8.1. 9.0 10.2. 9.1...... ≥ USD 10 million …………………………… Potential Trade 9.2. million An Assessment of the Pakistan-Sri Lanka Free Trade Agreement An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Trade A Brief A Brief Section 1 Section Introduction to Introduction Pakistan-Sri Lanka Pakistan-Sri 1.0 THE PAKISTAN BUSINESS COUNCIL: AN OVERVIEW The Pakistan Business Council (PBC) is a business policy advocacy forum, representing private-sector businesses that have substantial investments in Pakistan’s economy. It was formed in 2005 by 14 (now 47) of Pakistan’s largest enterprises, including multinationals, to allow businesses to meaningfully interact with government and other stakeholders. The Pakistan Business Council is a pan-industry advocacy group. It is not a trade body nor does it advocate for any specific business sector. Rather, its key advocacy thrust is on easing barriers to allow Pakistani businesses to compete in regional and global arenas. The PBC works closely with the relevant government departments, ministries, regulators and institutions, as well as other stakeholders including professional bodies, to develop consensus on major issues which impact the conduct of business in and from Pakistan. The PBC has submitted key position papers and recommendations to the government on legislation and other government policies affecting businesses. It also serves on various taskforces and 08 committees of the Government of Pakistan as well as those of the State Bank, SECP and other regulators with the objective to provide policy assistance on new initiatives and reforms. The PBC conducts research and holds conferences and seminars to facilitate the flow of relevant information to all stakeholders in order to help create an informed view on the major issues faced by Pakistan. The PBC’s Founding Objectives: • To provide for the formation and exchange of views on any question connected with the conduct of businesses in and from Pakistan. • To conduct, organize, set up, administer and manage campaigns, surveys, focus groups, workshops, seminars and field works for carrying out research and raising awareness in regard to matters affecting businesses in Pakistan. • To acquire, collect, compile, analyze, publish and provide statistics, data analysis and other information relating to businesses of any kind, nature or description and on opportunities for such businesses within and outside Pakistan. An Assessment of the Pakistan-Sri Lanka Free Trade Agreement • To promote and facilitate the integration of businesses in Pakistan into the world economy and to encourage the development and growth of Pakistani multinationals. • To interact with Governments in the economic development of Pakistan and to facilitate, foster and further the economic, social and human resource development of Pakistan. The PBC is a Section 42 not-for-profit Company Limited by Guarantee. Its working is overseen by a Board of Directors elected every three years by the Membership with the Board being headed by a Non-Executive Chairman. The day-to-day operations of the PBC are run by a professional secretariat headed by a full-time, paid CEO. More information on the PBC, its members, and its workings, can be found on its website: www.pbc.org.pk Executive Summary 2.0 KEY FINDINGS 2.1. OVERVIEW OF PAK-SRI LANKA TRADE AND POTENTIAL FOR GROWTH 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). Top Pakistani exports to Sri Lanka include cotton products, cement, refined sugar and potatoes. Top Sri Lankan exports to Pakistan include vegetable products, rubber, fibreboard and coconut products. Pakistan’s exports to Sri Lanka grew from USD 154 million in 2004 to 09 USD 316 million in 2013, but 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. Fig.1 Pakistan-Sri Lanka trade numbers 2004-2013 Pakistan's Trade with Sri Lanka 400 347.722 350 316.382 300.904 300 283.87 S 250 N 216.72 216.963 O 208.573 I L L I 200 177.595 Exports 153.662 150 134.715 Imports USD M An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 83.41 100 70.97 59.18 59.79 66.22 55.79 61.13 63.52 45.66 53.37 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Trade between the two countries has shown lacklustre growth despite the FTA. Both countries claim significant market shares in precious few exports to the other. Trade has continued in roughly the same mix of products that existed prior to the FTA and most tariff lines continue to report zero trade. This is in stark contrast to Sri Lanka’s trade relations with countries such as India and China, wherein significant and fast-paced growth has occurred. This Study suggests that fledgling Pakistan-Sri Lanka trade relations cannot be blamed on a paucity of opportunities or lack of potential for trade. Both countries produce goods that have healthy markets in the partner country. The FTA is comprehensive and offers full concession on a variety of important exports. Sri Lanka is currently in a period of reconstruction following the conclusion of long-lasting political conflict and is growing its status as a prime tourist destination. Moreover, Pakistan and Sri Lanka have strong political ties and the goodwill between them is part of what led Pakistan to sign its first free trade agreement with Sri Lanka. Considerable potential remains dormant, and this Study attempts to flesh out the specifics of this potential and suggest ways to remove obstructions to its realization. 2.2. HIGH POTENTIAL TRADE ITEMS This Study identifies export items at the 6 digit HS code level which, based on certain favourable metrics, are poised to effectively drive the growth of trade between Pakistan and Sri Lanka. The metrics used are those of trade potential and Compound Annual Growth Rate (CAGR) values. Trade potential represents the extent to which trade can theoretically be increased with another country, and therefore provides an idea of the scope for trade expansion. A CAGR value for growth in, say, exports of an item over a certain period gives us the rate at which the exports would have grown if they grew smoothly, and therefore can function as a rough indicator of a growth trend. If, for a product X, trade potential is high, and the CAGR values of its total world exports by the exporting country and its total world imports by the importing country are high, it can be said that the exporting country is a significant and growing producer and the importing country is a significant and growing consumer of product X. This Study identifies items that exhibit this combination of favourable metrics, but a low or negative CAGR value for their trade between Pakistan and Sri Lanka, suggesting that certain generally positive trends have failed to encompass the Pak-Sri Lanka trade relation. 10 This further suggests that once the Pak-Sri Lanka specific obstruction to trade is removed, trade can be increased quickly by harnessing the positive trends. Investigation into the issues faced in Pak-Sri Lanka trade give us some idea of what these obstructions might be. The following are selected Pakistani export items with high trade potential and favourable CAGR values. Out of the total trade potential of around USD 1.7 billion for the items surveyed at the 6 digit level, USD 500 million is concentrated in items with favourable CAGR values. Table 1. Pakistani products that have high trade potential and encouraging CAGR values HS CODES WITH HIGH TRADE POTENTIAL AND FAVOURABLE CAGR VALUES Total Trade Potential in High Number of high potential/ HS Code Product Label CAGR Items in USD millions CAGR items at 6 digit HS code 73 Articles of iron or steel 53 3 39 Plastics and articles thereof. 34 11 85 Electrical, electronic equipment 29 6 Articles of apparel and clothing An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 62 accessories, not knitted or 16 3 crocheted. The following are selected Sri Lankan export item HS codes with high potential and favourable CAGR values at the 6 digit HS code level. Out of the total trade potential of around USD 1 billion for the items surveyed at the 6 digit level, USD 880 million is concentrated in items with favourable CAGR values. Table 2. Sri Lankan products that have high trade potential and encouraging CAGR values HS CODES WITH HIGH TRADE POTENTIAL AND HIGH CAGR VALUES Total Trade Potential in High Number of high potential/ HS Code Product Label CAGR Items in USD millions CAGR items at 6 digit HS code 09 Coffee, tea, mate and spices 316 2 85 Electrical, electronic equipment 75 13 40 Rubber and articles thereof 40 6 Miscellaneous edible 21 31 2 preparations These tables suggest that a lack of trade potential is not the primary impediment to better Pakistan-Sri Lanka trade relations. 3.0 RECOMMENDATIONS The major impediment to healthier trade relations between Pakistan and Sri Lanka seems to be disengagement between the countries’ business men as well as their policy makers. This could be due to misconceptions regarding Sri Lanka’s potential as a market for Pakistani goods and the resulting lack of interest in trade with the country. This suggests that the unrealized potential this Study identifies remains unrealized largely because neither country views the other as a priority market despite an abundance of opportunities. This is evinced by the lack of regular trade delegations and single country exhibitions, which leads to weak ties between the business communities of the two countries, thereby making it difficult to jump- start trade within neglected high potential items. While there are specific items which can be put forward to be considered for further concessions, by and large the FTA terms themselves are comprehensive and do not seem to be in need of any serious amendments. 3.1 TRADE DELEGATIONS AND SINGLE COUNTRY EXHIBITIONS Trade delegations and single country exhibitions must be held regularly in order to lay the 11 groundwork for stronger ties between the two countries’ business communities, as well as to raise awareness regarding the significant potential that lies in Pak-Sri Lanka trade. One of the major complaints voiced by Pakistani exporters to Sri Lanka is that a lack of interaction with their Sri Lankan counterparts impedes the identification of further opportunities for business in either country and prevents existing partnerships from being deepened. The granting of arrival visas by both sides would be a significant step towards facilitating the kind of interaction required to boost trade. 3.2 AGREEMENT ON CHANGES TO FTA TERMS Any changes in tariffs, para-tariffs or no-concession lists that conflict with the terms of the FTA must be discussed by both countries before being brought into effect. There are instances of unilateral changes made by both Pakistan and Sri Lanka that have undermined the spirit of the FTA and consequently seriously disrupted business dealings between the two countries within products such as broom corn and steel pipes. Problematic changes such as these will likely become less common as trade between Pakistan and Sri Lanka becomes more significant. An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 3.3 GREATER INVOLVEMENT OF BUSINESSMEN IN REVIEW OF THE FTA Industrialists and exporters should have greater involvement in the drafting of future FTAs and the review of this existing FTA. A commonly voiced complaint was that an FTA can only be maximally advantageous if it takes into account the variegated and interwoven issues and concerns of different sectors affected by the FTA. In other words, an item-byitem discussion involving stakeholder is thought to be necessary. 3.4 FORUMS FOR TRADE DISPUTE RESOLUTION Forums must be set up for the efficient arbitration of trade disputes. Disputes arise with regularity and end up unaddressed due to the lack of efficient mechanisms for their resolution. This has acted as an additional disincentive to trade between Pakistan and Sri Lanka, as the danger of a delayed resolution or no resolution has resulted in more frequent cases of fraud. 4.0 STUDY OBJECTIVES The decade following the signing of the Pakistan-Sri Lanka Free Trade Agreement has witnessed low growth in trade between the two countries. This is particularly troubling because in addition to having strong political ties and comprehensive FTA terms to capitalize on, both countries also seem to possess markets for the other’s major export goods. The primary aim of this Study is to estimate the potential for bilateral trade between Pakistan and Sri Lanka and recommend means for achieving the same. We therefore start by identifying: a) Items possessing high potential for export from Pakistan to Sri Lanka b) Items possessing high potential for export from Sri Lanka to Pakistan Sources of Data The data for this study has been drawn from ITC Trademap for the period ended 2013 , which 12 bases its data on UN Comtrade, maintained by the United Nations Statistics Division (UNSD). Any quarterly and monthly data is drawn by Trademap from national and regional sources. All tariff values are equivalent ad valorem tariffs drawn from Trademap unless otherwise noted. Methodology This study provides a list of items at the 6-digit HS code level that exhibit high trade potential, with items possessing favourable CAGR metrics highlighted. Intuitively, trade potential is the theoretical extent to which trade of a given item can be expanded, which suggests the actual scope for growth in trade of that item. It is given by the following equation: Trade Potential =Min (Pakistan’s exports to the world of X,Sri Lanka’s imports from the world of X) -Pakistan’s current exports to Sri lanka of X For instance, if Pakistan exports USD 500 million worth of cement to the world, and Sri Lanka An Assessment of the Pakistan-Sri Lanka Free Trade Agreement imports USD 300 million worth of cement from the world, and Pakistan exports USD 40 million worth of cement to Sri Lanka, then trade potential is USD 260 million, since Pakistan has the capacity to export USD 260 million worth of cement to Sri Lanka given Sri Lanka’s import requirements. The Compound Annual Growth Rate (CAGR) is the geometric mean of the individual annual growth rates during a period. It gives you the growth rate that would have gotten your initial value to your final value had the value grown smoothly over the relevant period. It is given by: If the CAGR for Pakistan’s world exports of a good is high, and the CAGR for Sri Lanka’s world imports of that good is high, but the CAGR for export of that good from Pakistan to Sri Lanka is low or negative, the item has been highlighted, since the removal of an obstruction that is potentially specific to Pakistan-Sri Lanka relations can jump-start trade of the good between the two countries. 1 2013 was the last year for which complete data was available. Furthermore, the revealed comparative advantage has been calculated for items on either country’s no concession list to bring attention to items that may be worth considering for further concessions. Revealed comparative advantage is given by: RCA indicates the relative efficiency of a country in exporting a particular good. 13 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 5.0 PAKISTAN SRI LANKA FREE TRADE AGREEMENT (PSLFTA) The Pakistan-Sri Lanka Free Trade agreement (PSLFTA) was signed in July 2002 and became operational from 12th June 2005. The FTA required both countries to achieve zero tariffs on a range of items during a certain time-frame. Pakistan granted 100% immediate concession on 206 items at the 6-digit HS level whereas Sri Lanka granted 100% immediate concession on 102 items at the same level. Pakistan’s no concession list ran to 540 items at the 6 digit level while Sri Lanka’s no concession list ran to 697 items, which were cut down to 607 items in April 2013. Furthermore, Pakistan granted Sri Lanka a duty free tariff rate quota (TRQ) on tea products as well as another TRQ at 35% margin of preference on the MFN rate on various clothing items. Sri Lanka reciprocated by granting Pakistan a duty free TRQ on long grain Basmati rice and potatoes. The terms of the FTA required Pakistan to phase out tariffs on items not on its no-concession list by 2008, while Sri Lanka had till 2010 to do the same. Major Pakistani exports that Sri Lanka granted full concession to include cotton, apparel, knitted fabrics and cement. Major Sri Lankan exports granted full concession by Pakistan include rubber, coconut products and vegetable products. 14 Table 3. Summary of Pak-Sri Lanka FTA terms Tariff Reduction Pakistan Sri Lanka 100% immediate concession 206 items 102 items Tariff-phasing out period 3 years 5 years Sensitive List 540 607 (amended in 2013) Direct Value Addition (DVA) is 35% of FOB value. If parts of an input originate from Rules of Origin a contracting country, minimum aggregate content must be 35% with minimum domestic input content being 25%. The most recent year for which comprehensive trade data was available was 2013 and therefore the tariff concessions granted to Sri Lankan import items by the Federal Board of Revenue in April 2014 have not been taken into account. 5.1 SHORT ECONOMY PROFILES The GDP Average Annual Growth Rate (AAGR) in Sri Lanka averaged 6.59% from 2003 until 2014, whereas Pakistan’s GDP AAGR for the same period was 11.11% An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Fig. 2 GDP Growth rates of Pakistan and Sri Lanka GDP Annual Grow th 250 200 S 150 Sri Lanka GDP BILLI O N 100 D S Pakistan GDP U 50 0 2003 2005 2007 2009 2011 2013 From 2004 to 2013 Sri Lanka’s total trade with the world grew by 110% whereas Pakistan’s trade grew by 120%. However, since the FTA was fully implemented in 2010, Sri Lanka’s trade has grown by 35% whereas Pakistan’s trade has grown by only 17%. Both Pakistan and Sri Trade Deficit Growth Rate 0 2003 2005 2007 2009 2011 -0.5 Sri Lanka Trade Balance ON S -1 LL I I Pakistan Trade Balance D B S -1.5 U -2 -2.5 GDP Annual Grow th 250 200 S 150 Sri Lanka GDP BILLI O N 100 D S Pakistan GDP U 50 0 2003 2005 2007 2009 2011 2013 Lanka have had negative trade balances over the period 2004-2013, with the Sri Lankan trade imbalance increasing by 232% and the Pakistani trade balance increasing by 308% during this time. Fig. 3 Pakistan and Sri Lanka’s balances of trade Trade Deficit Growth Rate 0 2003 2005 2007 2009 2011 -0.5 Sri Lanka Trade Balance ON S -1 LL I I Pakistan Trade Balance D B S -1.5 U 15 -2 -2.5 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 5.2 TOP TRADING PARTNERS Pakistan’s exports have continued to be dominated by the US over the past few years, whereas exports to China have grown over three times since 2007 to make it Pakistan’s second largest export destination in 2013. Both Afghanistan and the UK have shown healthy growth as export markets for Pakistani products over this period though the UAE has fallen off by a small amount. Table 4. Pakistan’s top five export destinations Figures in USD Billions Pakistan Export Partner 2007 2008 2009 2010 2011 2012 2013 USA 3.85 3.65 3.22 3.67 3.84 3.67 3.75 China 0.61 0.73 1.00 1.44 1.68 2.62 2.65 United Arab Emirates 2.11 2.01 1.54 1.83 1.92 2.87 1.78 Afghanistan 0.84 1.45 1.37 1.68 2.66 2.10 2.00 United Kingdom 0.97 1.00 0.94 1.11 1.26 1.25 1.43 16 The UAE has emerged as Pakistan’s major origin of imports over the period under consideration, and while imports from the rest of the top five import partners showed overall growth during this time, Saudi imports fell by a small amount. Table 5. Pakistan’s top five origins of imports Figures in USD Billions Pakistan Import Partner 2007 2008 2009 2010 2011 2012 2013 United Arab Emirates 2.77 3.78 3.35 5.25 6.82 7.21 7.75 China 4.16 4.74 3.78 5.25 6.47 6.69 6.63 Kuwait 1.85 3.44 1.80 2.61 3.89 4.21 3.95 Saudi Arabia 4.01 5.95 3.50 3.84 4.67 4.28 3.85 Malaysia 1.16 1.69 1.61 2.05 2.73 2.13 1.92 Sri Lanka’s exports have flowed primarily to the EU and the US over the past few years, with the US gradually gaining importance as an export destination until 2013 when it was only 4.6% lower than exports to the EU. India has held on to a distant third place in the top An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Sri Lankan import partners and has shown little growth as a market for Sri Lankan goods between 2007 and 2013. Table 6. Sri Lanka’s top five export destinations Figures in USD Billions Sri Lanka Export Partner 2007 2008 2009 2010 2011 2012 2013 EU 2.39 2.49 2.33 2.53 2.80 2.94 2.69 USA 1.98 1.89 1.59 1.77 2.14 2.12 2.57 India 0.52 0.42 0.33 0.47 0.52 0.60 0.54 Russia 0.20 0.22 0.19 0.24 0.28 0.26 0.28 United Arab Emirates 0.21 0.26 0.21 0.25 0.30 0.23 0.24 India has been Sri Lanka’s major source of imports over this period, though China has asserted itself as a serious competitor for the Sri Lankan market by more than doubling its exports to the country since 2007. The table suggests that the Sri Lankan market for foreign goods is healthy and growing, and this should be a guiding idea in assessing Pakistan’s fledgling trade relationship with the country. Table 7. Sri Lanka’s top five origins of import Figures in USD Billions Sri Lanka Import Partner 2007 2008 2009 2010 2011 2012 2013 India 2.59 2.84 1.72 3.31 4.45 3.81 4.75 China 1.39 1.63 1.57 1.99 2.99 3.00 3.44 Singapore 0.83 0.99 0.76 1.20 1.33 1.56 1.96 EU 1.17 1.19 1.00 1.22 1.56 1.49 1.38 United Arab Emirates 0.37 0.46 0.30 0.34 0.81 1.29 1.22 17 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 5.3 OVERVIEW OF PAKISTAN-SRI LANKA TRADE Fig. 4 Pakistan-Sri Lanka trade numbers 2004-2013 Pakistan's Trade with Sri Lanka 400 347.722 350 316.382 300.904 300 283.87 S 250 208.573 216.72 216.963 LLIO N I 200 177.595 Exports M 153.662 150 134.715 Imports USD 100 83.41 70.97 66.22 59.18 59.79 55.79 61.13 63.52 45.66 53.37 18 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Pakistan is Sri Lanka’s second largest source of imports in South Asia behind India, which also has an FTA with Sri Lanka that became operational in 2000 and was in full effect by 2008. However, India, China and Singapore dominated Sri Lankan imports in 2013 with 26.5%, 16.5% and 10% of total Sri Lankan imports respectively as compared to Pakistan’s negligible 1.7% share. The following graphs show that while Pakistan’s exports to Sri Lanka have registered net growth during the 2004-2013 period, asides from a spike around 2009-2010 when Sri Lanka completed its trade liberalization, Pakistan’s percentage share of Sri Lankan imports has remained stagnant at a very low level. Fig. 5 Pakistan’s annual Fi g exports. 5 Pakistan’ s toann uSrial exp Lankaorts to S r2003-2013i Lanka 2003-2013 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Pakistani Exports to Sri Lanka 0.4 S S N 0.3 N 0.3 O I O I L L L I L I 0.2 Pak Exports to Sri Lanka USD B USD B 0.1 0 2004 2006 2008 2010 2012 Fig. 6 Pakistan’s percentage Fi g . 6 Pakis sharetan’s perce ofnta Srige sha Lanka’sre of Sri Lank worlda’s world exports exports Pakistani % of Sri Lanka exports 2.5 2 1.5 1 Pak % of Sri Lanka exports 0.5 0 2004 2006 2008 2010 2012 In 2004 Pakistani exports to Sri Lanka were USD 154 million, which was 1.15% of total Pakistani exports and 2.8% of Sri Lankan imports. By 2013 they were USD 316 million, which was 1.26% of total Pakistani exports and 1.7% of Sri Lankan imports. It is therefore clear that the period over which the FTA gradually came into effect Pakistan’s absolute level of exports to Sri Lanka increased by 105% but its share of Sri Lanka’s total imports actually fell, which is cause for concern since Pakistan’s share of the Sri Lankan import goods market was very small to begin with. For comparison, India, Sri Lanka’s other FTA partner, had exports to Sri Lanka of USD 1.4 billion in 2004, which were 17.8% of Sri Lanka’s total imports and by 2013 exports were USD 4.8 billion, and 26.5% of Sri Lanka’s total imports. So, prima facie, India was able to better capitalize on its FTA with Sri Lanka than Pakistan was on the PSLFTA. On the other hand, Sri Lanka’s exports to Pakistan were USD 46 million (0.83% of Sri Lankan exports) in 2004 and USD 63 million (0.63% of Sri Lankan exports) in 2013. So Pakistan has remained an insignificant export destination for Sri Lankan products during the period the FTA has come into effect. Sri Lanka’s exports to India were USD 333 million (6.1% of Sri Lankan 19 exports) in 2004 and USD 515 million (5.15 % of Sri Lankan exports) in 2013, suggesting that while there is a significant absolute rise in exports to India, Sri Lankan exports are finding other priority markets or have been unable to overcome India’s significant non-tariff barriers. It should be kept in mind, however, that while the current state of trade between Sri Lanka and Pakistan is not entirely encouraging, both are markets for the other’s primary exports. Pakistan is an important export market for tea, which is a top Sri Lankan export item, and it is also a significant importer of copra and rubber, which are also important Sri Lankan exports. Sri Lanka is an important market for textile products, machinery and pharmaceuticals along with other products that Pakistan records significant exports of. Therefore a more fruitful trading partnership seems to lie within reach for the two countries. Table 8. Pakistan and India’s exports to Sri Lanka in 2004 and 2013 2004 2013 Pakistani Exports to Sri Lanka 154 million 316 million Indian Exports to Sri Lanka 1.4 billion 4.8 billion An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Table 9. Pakistan and India’s imports from Sri Lanka in 2004 and 2013 2004 2013 Pakistani Imports from Sri Lanka 46 million 63 million Indian Imports from Sri Lanka 313 million 515 million The following graphs show that Sri Lanka’s major trade partners exhibited aggressive growth not just in absolute exports but also in their share of the Sri Lankan market during 2004-2013, whereas Pakistan remained a bit player in the Sri Lankan market. Fig. 7 Composition Fig . 7 C om pofo sSriition oLanka’sf Sri Lank a’totals tota limports imports b yby co uncountrytry of or igofin origin Sri Lankan Import Composition by Import origin 5 4 S 4 S Pak Exports 3 Pak Exports India Exports 2 China Exports USD BILLIO N USD BILLIO N 1 Singapore Exports 20 1 Singapore Exports 0 2004 2006 2008 2010 2012 Fig. 8 Sri Lankan world imports by partner country percentage shares F ig . 8S r i L an kan world imports by partner country percentage shares Trade Partner Percentage Shar e in Sri Lankan Imports 30 25 20 Pak % Share 15 15 India % Share An Assessment of the Pakistan-Sri Lanka Free Trade Agreement China % share 10 China % share Singapore % share 5 0 2004 2006 2008 2010 2012 It should be noted that Pakistan has been a major trading partner of Sri Lanka’s in the past: in 1990 Pakistan accounted for 27.6% of Sri Lanka’s imports from SAARC countries (South Asian Association for Regional Cooperation), and for 45.8% of Sri Lanka’s exports to the same region. However, the FTA does not seem to have done enough to counteract the falling off of Pakistan-Sri Lanka trade relations since their heyday. 5.4 OVERVIEW OF PAKISTAN’S EXPORTS TO THE WORLD AND TO SRI LANKA Pakistan’s export mix has remained consistent over the period 2007-2013, with cotton, textile products and cereals dominating. High growth in a number of export items is worth noting- export of cereals grew by 75%, salt, sulphur etc. by 187%, sugar exports grew over 900% and pearls and precious stones grew by 260%. Table 9. Pakistan’s world exports 2007-2013 Figures in USD Millions PAKISTAN’S EXPORTS TO THE WORLD Exported Exported Exported Exported Exported Exported Exported HS Code Product label value in value in value in value in value in value in value in 2007 2008 2009 2010 2011 2012 2013 52 Cotton 3,440 3,596 3,204 4,013 5,097 5,226 5,334 Other made textile 63 articles, sets, worn 3,179 3,146 2,918 3,285 3,570 3,285 3,685 clothing etc 21 10 Cereals 1,244 2,508 1,823 2,280 2,807 2,061 2,181 Articles of apparel, 61 accessories, knit or 1,851 1,888 1,681 1,982 2,239 2,006 2,105 crochet Articles of apparel, 62 accessories, not knit 1,371 1,361 1,206 1,462 1,775 1,694 1,855 or crochet Articles of leather, 42 animal gut, harness, 692 767 578 619 681 674 744 travel goods Salt, sulphur, earth, 25 stone, plaster, lime 252 601 563 514 571 714 723 and cement Sugars and sugar 17 61 239 112 88 67 254 634 confectionery Raw hides and skins 41 (other than fur skins) 392 383 270 416 468 457 530 and leather Mineral fuels, oils, 27 distillation products, 994 1,230 715 1,203 1,312 331 527 etc An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Plastics and articles 39 187 296 306 408 544 521 450 thereof Pearls, precious 71 stones, metals, coins, 120 240 479 590 469 1,634 437 etc Edible fruit, nuts, peel 8 125 145 203 254 311 348 434 of citrus fruit, melons Manmade staple 55 386 285 300 511 606 449 418 fibres Beverages, spirits 22 156 231 122 187 273 173 364 and vinegar Optical, photo, 90 technical, medical, 241 280 257 261 302 319 348 etc apparatus PAKISTAN’S EXPORTS TO THE WORLD Exported Exported Exported Exported Exported Exported Exported HS Code Product label value in value in value in value in value in value in value in 2007 2008 2009 2010 2011 2012 2013 Fish, crustaceans, 03 molluscs, aquatic 161 218 193 231 261 292 333 invertebrates nes Edible vegetables 07 and certain roots and 73 46 86 120 259 188 249 tubers Milling products, 11 malt, starches, inulin, 110 24 22 47 368 263 227 wheat gluten Toys, games, sports 95 211 226 172 212 225 219 221 requisites The table on the following page is suggestive with regards to the importance of Pakistani imports to Sri Lanka. A number of top Pakistani exports to Sri Lanka registered significant 22 growth in absolute terms during 2004-2013, though this is largely a consequence of very low export numbers in 2004 to begin with. While several exports exhibit this unarguably positive trajectory, growth in percentage shares of the Sri Lankan market suggests that the trend was not strong enough to carve out a space for Pakistan as a significant Sri Lankan trade partner. In other words, most Pakistani export items held onto only a marginal presence in Sri Lanka’s import market during this period. Notable exceptions to this were cotton (18.6%), raw hides (28.4%), milling products (21.5%) and sugar (12%), which all managed to capture a major part of their respective markets. On the other hand, market share in HS 63 (other textile articles) and HS 03 (fish, crustaceans etc.) dropped significantly from 68% and 13% to 24% and 4% respectively of total Sri Lankan imports.2 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 2The most recent year for which comprehensive trade data was available was 2013 and therefore the tariff concessions granted to Sri Lankan import items by the Federal Board of Revenue in April 2014 have not been taken into account in this report. 0 0 0 6.9 0.6 2.3 4.5 0.6 0.6 2.3 0.2 6.9 0.6 81.5 12.3 14.9 Pakistan applied by Sri Lanka to valorem tariff Equivalent ad 2.5 7.2 7.6 5.6 0.3 0.9 0.1 0.4 2.5 7.2 7.6 -1.5 -9.5 21.4 25.9 10.4 Figures in USD Millions share of Sri Change in % Lankan Imports 3 3 4 4 -2 -1 16 42 45 10 12 33 13 16 42 45 exports Change in 23 4% 12% 7.70% 0.60% 5.60% 0.80% 3.90% 5.30% 6.20% 7.70% 10.70% 18.60% 21.50% 28.40% 10.70% 18.60% imports Sri Lankan % share of total 19 15 53 587 355 549 595 620 117 370 330 289 286 587 355 549 world 2013 Sri Lanka’s imports from 4 4 4 3 5 5 45 38 15 17 18 35 45 38 102 102 Lanka 2013 Exports to Sri 0% 0% 0% 8.20% 0.10% 2.40% 2.10% 0.50% 3.10% 5.20% 5.80% 1.50% 8.20% 11.50% 13.50% 11.50% imports An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Sri Lankan PAKISTAN’S SHARE OF SRI LANKAN IMPORTS SHARE OF SRI LANKAN PAKISTAN’S % share of total 7 9 97 18 41 84 97 262 527 279 343 140 103 128 262 527 world 2004 Sri Lanka’s imports from 0 0 6 0 0 6 2 4 5 5 2 0 21 60 21 60 Lanka 2004 Exports to Sri Product Label Salt, sulphur, earth, Salt, sulphur, lime stone, plaster, and cement Cereals Beverages, spirits and vinegar Cotton Fish, crustaceans, molluscs, aquatic invertebrates nes Milling products, malt, starches, inulin, wheat gluten Raw hides and skins (other than furskins) and leather Plastics and articles thereof Knitted or crocheted fabric Articles of iron or steel Edible vegetables and certain roots tubers Pharmaceutical products Sugars and sugar confectionery Salt, sulphur, earth, Salt, sulphur, lime stone, plaster, and cement Cereals Cotton 25 10 22 52 03 11 41 39 60 73 07 30 17 25 10 52 HS Code Table 10. Pakistani imports’ share of their market in Sri Lanka 10. Pakistani Table 0 2.3 4.5 0.6 0.6 2.3 0.2 81.5 12.3 14.9 Pakistan applied by Sri Lanka to valorem tariff Equivalent ad 5.6 0.3 0.9 0.1 0.4 -1.5 -9.5 21.4 25.9 10.4 share of Sri Change in % Lankan Imports 3 3 4 4 -2 -1 10 12 33 13 exports Change in 24 4% 12% 0.60% 5.60% 0.80% 3.90% 5.30% 6.20% 21.50% 28.40% imports Sri Lankan % share of total 19 15 53 595 620 117 370 330 289 286 world 2013 Sri Lanka’s imports from 4 4 4 3 5 5 15 17 18 35 Lanka 2013 Exports to Sri 0% 0.10% 2.40% 2.10% 0.50% 3.10% 5.20% 5.80% 1.50% 13.50% imports An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Sri Lankan PAKISTAN’S SHARE OF SRI LANKAN IMPORTS SHARE OF SRI LANKAN PAKISTAN’S % share of total 7 9 18 41 84 279 343 140 103 128 world 2004 Sri Lanka’s imports from 0 6 0 0 6 2 4 5 5 2 Lanka 2004 Exports to Sri Product Label Beverages, spirits and vinegar Fish, crustaceans, molluscs, aquatic invertebrates nes Milling products, malt, starches, inulin, wheat gluten Raw hides and skins (other than furskins) and leather Plastics and articles thereof Knitted or crocheted fabric Articles of iron or steel Edible vegetables and certain roots tubers Pharmaceutical products Sugars and sugar confectionery 22 03 11 41 39 60 73 07 30 17 HS Code The following table is suggestive with regards to Sri Lanka’s importance to Pakistan as a destination for its exports. Items such as pharmaceutical products (10%), articles of iron and steel (8%) and knitted or crotched fabric (16%) are among the few Pakistani export categories that rely significantly on Sri Lankan demand. The table shows that several major exports to Sri Lanka have actually shrunk in their importance as sources of export revenue for Pakistan during 2004-2013, one example being edible vegetables which fell from 12% of Pakistan’s total exports of the item to 7%. Several top Pakistani exports to Sri Lanka account for less than 1% of those items’ total exports by Pakistan, such as raw hides and plastics. Table 11. Sri Lanka’s share in world exports of Pakistani items Figures in USD Millions SRI LANKA’S SHARE OF PAKISTAN’S EXPORTS % Share Exports % Share Exports to Exports Exports of total to Sri of total Change in HS Code Product Label Sri Lanka to world to world world Lanka world % share 2004 2004 2013 exports 2013 exports 52 Cotton 60 2,979 2% 102 5,334 1.90% -0.1 Salt, sulphur, earth, 25 stone, plaster, lime 0 44 0.10% 45 723 6.30% 6.2 25 and cement 10 Cereals 21 683 3.10% 38 2,181 1.70% -1.4 Sugars and sugar 17 2 107 1.80% 35 634 5.50% 3.6 confectionery Edible vegetables 07 and certain roots and 5 40 12.10% 18 249 7.10% -5 tubers Pharmaceutical 30 5 57 9.40% 17 169 10.30% 0.9 products Articles of iron or 73 4 55 7.80% 15 180 8.10% 0.3 steel Knitted or crocheted 60 2 179 1% 5 33 16.10% 15.1 fabric Fish, crustaceans, 03 molluscs, aquatic 6 114 4.90% 5 333 1.40% -3.5 invertebrates nes Milling products, 11 malt, starches, inulin, 0 53 0% 4 227 1.80% 1.8 wheat gluten Raw hides and skins An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 41 (other than furskins) 0 286 0.10% 4 530 0.80% 0.7 and leather Plastics and articles 39 6 165 3.50% 4 450 0.80% -2.7 thereof Beverages, spirits 22 0 29 0% 3 364 0.80% 0.8 and vinegar Edible fruit, nuts, peel 08 2 107 1.60% 3 434 0.60% -1 of citrus fruit, melons Coffee, tea, mate and 09 1 16 5.90% 2 77 3.10% -2.8 spices Other made textile 63 articles, sets, worn 6 2,353 0.20% 2 3,685 0.10% -0.2 clothing etc Articles of apparel, 61 accessories, knit or 2 1,665 0.10% 2 2,105 0.10% 0 crochet Vehicles other than 87 1 37 2.80% 2 74 2.50% -0.3 railway, tramway Manmade staple 55 1 111 0.70% 2 418 0.40% -0.3 fibres Electrical, electronic 85 1 66 1.20% 1 115 0.80% -0.4 equipment 5.5 OVERVIEW OF PAKISTAN’S IMPORTS FROM THE WORLD AND FROM SRI LANKA Major Pakistani imports from the world that registered significant percentage increases include mineral fuels (45%), animal and vegetable fats (34%), and printed books and newspapers (95%). Items whose imports fell during this period include electronic equipment(-29%), vehicles other than railways (-15%) and tramways and fertilizers (-23%). Table 12. Pakistan’s imports from the world 2007-2013 Figures in USD Millions PAKISTAN’S IMPORTS FROM THE WORLD Imported Imported Imported Imported Imported Imported Imported % change HS Code Product label value in value in value in value in value in value in value in in 2007 2008 2009 2010 2011 2012 2013 Imports Mineral fuels, oils, 27 distillation products, 8,350 14,054 8,838 11,399 14,860 15,947 15,247 45.2 26 etc Machinery, nuclear 84 3,262 3,924 3,120 2,953 2,951 3,060 3,058 -6.7 reactors, boilers, etc Electrical, electronic 85 3,448 3,782 2,619 2,442 2,430 2,752 2,682 -28.6 equipment 29 Organic chemicals 1,570 1,761 1,518 1,721 2,213 2,038 2,016 22.1 Animal,vegetable fats 15 and oils, cleavage 1,301 1,880 1,412 1,852 2,589 2,313 1,980 34.3 products, etc 72 Iron and steel 1,543 1,629 1,683 1,695 1,680 1,848 1,841 16.2 Plastics and articles 39 1,281 1,360 1,185 1,458 1,679 1,501 1,570 18.4 thereof Vehicles other than 87 1,419 1,184 969 1,308 1,502 1,596 1,238 -14.6 railway, tramway 52 Cotton 918 1,209 498 831 909 684 1,047 12.3 Ships, boats and 89 other floating 573 183 399 839 527 544 981 41.6 structures Printed books, 49 newspapers, pictures 42 78 44 46 33 137 858 95.1 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement etc Pharmaceutical 30 374 433 539 498 534 598 675 44.6 products 31 Fertilizers 748 729 805 648 1,028 908 606 -23.4 Miscellaneous 38 393 450 503 555 588 549 583 32.7 chemical products Manmade staple 55 280 339 345 505 681 539 532 47.3 fibres 54 Manmade filaments 339 315 344 516 703 530 527 35.7 Edible vegetables 07 and certain roots and 288 305 430 507 562 595 500 42.3 tubers Articles of iron or 73 388 622 480 425 387 409 486 20.2 steel Oil seed, oleagic 12 fruits, grain, seed, 501 380 459 628 691 616 479 -4.7 fruit, etc, nes Rubber and articles 40 342 365 292 413 536 464 460 25.7 thereof A cursory glance at the table below suggests that Sri Lanka is not a major origin of imports for Pakistan, with the exception of vegetable plaiting materials whose Sri Lankan imports account for 69% of all Pakistani imports of the product. This is also the only HS code that has registered any significant growth in its share of Pakistani imports since 2004, growing its share from 31% to 69%. Several top Sri Lankan imports account for less than 1% of total Pakistani imports of those products, including edible vegetables and manmade filaments. Table 13. Sri Lanka’s share in Pakistan’s total world imports Figures in USD Millions SRI LANKA’S SHARE OF PAKISTAN’S IMPORTS Pak Pak Pak Pak % Share in % Share in HS Imports Imports Imports Imports Change in Product Label Pakistani Pakistan’s Code from SL from world from SL from world % share Imports imports 2004 2004 2013 2013 Vegetable plaiting 14 materials, vegetable 4 12 31% 17 25 69.20% 38.2 products nes Rubber and articles 40 13 218 5.80% 11 460 2.50% -3.3 thereof Wood and articles of 44 3 54 4.80% 9 110 7.90% 3.1 wood, wood charcoal Coffee, tea, mate and 09 7 251 2.60% 7 385 1.80% -0.8 spices Edible fruit, nuts, peel 8 4 50 7.40% 6 133 4.30% -3.1 of citrus fruit, melons Edible vegetables 07 and certain roots and 0 106 0% 4 500 0.80% 0.8 27 tubers 54 Manmade filaments 0 156 0.10% 2 527 0.30% 0.2 Oil seed, oleagic 12 fruits, grain, seed, 11 269 4% 1 479 0.30% -3.7 fruit, etc, nes Vegetable textile 53 fibres nes, paper 1 32 1.70% 1 51 1.80% 0.1 yarn, woven fabric Pulp of wood, fibrous 47 cellulosic material, 0 46 0% 1 107 0.50% 0.5 waste etc Paper and paperboard, articles 48 0 225 0.10% 1 441 0.10% 0 of pulp, paper and board Articles of apparel, 62 accessories, not knit 0 5 0.60% 1 22 2.40% 1.8 or crochet Vehicles other than 87 0 769 0% 0 1,238 0% 0 railway, tramway Plastics and articles An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 39 1 714 0.10% 0 1,570 0% -0.1 thereof Miscellaneous 38 0 340 0.10% 0 583 0.10% 0 chemical products Animal,vegetable fats 15 and oils, cleavage 0 798 0.10% 0 1,980 0% -0.1 products, etc Articles of apparel, 61 accessories, knit or 0 5 0.80% 0 25 1.20% 0.4 crochet Aluminium and 76 0 139 0.10% 0 195 0.10% 0 articles thereof 69 Ceramic products 0 62 0% 0 101 0.20% 0.2 Manmade staple 55 0 149 0.20% 0 532 0% -0.2 fibres FTA Section 2 Section Analysis of of Analysis to Sri Lanka under to Sri Lanka Pakistan’s Exports Exports Pakistan’s An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 6.0 PRELIMINARY ANALYSIS OF PAKISTANI EXPORTS TO SRI LANKA UNDER FTA At the 2-digit HS code level 16 of the top 20 items registered net growth over the 2004-2013 period. The major growth items were cotton, which showed an increase of over USD 41 million, and HS 25 (salt, sulphur etc.), which showed an increase of over USD 45 million, albeit from a very low initial level of exports. Other major Pakistani exports to Sri Lanka include cereals and sugar products. Four 2-digit HS code items experienced a net reduction in exports, with the steepest reduction hitting HS 63 (other made textiles), which fell by over 3 million dollars. Table 14. Pakistan’s major exports to Sri Lanka Figures in USD Millions PAKISTAN'S EXPORTS TO SRI LANKA Equivalent ad Value in Value in valorem tariff applied HS Code Product label Growth 2004 2013 by Sri Lanka to Pakistan 29 52 Cotton 60 102 42 0 Salt, sulphur, earth, stone, plaster, 25 0 45 45 0.6 lime and cement 10 Cereals 21 38 16 6.9 17 Sugars and sugar confectionery 2 35 33 12.3 Edible vegetables and certain roots 07 5 18 13 14.9 and tubers 30 Pharmaceutical products 5 17 12 0.2 73 Articles of iron or steel 4 15 10 2.3 60 Knitted or crocheted fabric 2 5 3 0 Fish, crustaceans, molluscs, aquatic 03 6 5 -1 4.5 invertebrates nes Milling products, malt, starches, 11 0 4 4 0.6 inulin, wheat gluten Raw hides and skins (other than 41 0 4 4 0.6 furskins) and leather 39 Plastics and articles thereof 6 4 -2 2.3 22 Beverages, spirits and vinegar 0 3 3 81.5 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Edible fruit, nuts, peel of citrus fruit, 08 2 3 1 8.8 melons 09 Coffee, tea, mate and spices 1 2 1 1.6 Other made textile articles, sets, worn 63 6 2 -4 0 clothing etc Articles of apparel, accessories, knit 61 2 2 0 0 or crochet 87 Vehicles other than railway, tramway 1 2 1 15.8 55 Manmade staple fibres 1 2 1 0 85 Electrical, electronic equipment 1 1 0 2.7 An analysis at the 6 digit HS code level further highlights the worrying state of Pakistan-Sri Lanka trade relations over the past decade. Out of a total of 3502 items at full concession for exports from Pakistan, a mere 308 (8.8%) items showed net growth in the 2004-2013 period. 2952 (84.3%) full concession items exhibited no growth during this period, and the remaining 242 (6.9%)items showed a fall in exports. Furthermore, 3121 (89%) items at full concession showed 0 exports in 2013, and 2934 (83.7%) items also showed zero exports in 2004. This suggests that little diversification of exports has been achieved during the FTA period. Full concession items accounted for around USD 94 million of exports to Sri Lanka in 2004 and for around USD 214 million in 2013, showing a growth by 129%. However, the extent to which the terms of the FTA contributed to this growth requires further analysis. Out of a total of 568 items at no concession (including the items granted partial concessions in the form of TRQs) for which data was available, only 53 (9.3%) items showed net growth. 469 (82.3%) items registered no growth whereas the remaining 46 (8.1%) items fell in exports. 501 (88%) of these items reported no exports in 2013, and 471(83%)items reported zero exports in 2004. Non-concession items accounted for around USD 34 million of exports to Sri Lanka in 2004 and around USD 70 million in 2013, indicating a growth of 51%. Tariff information was not available for 74 items at the 6-digit code HS level. These items accounted for about USD 6 million of total exports to Sri Lanka in 2013. Table 15. Pakistani export items with positive, negative or zero growth in exports to Sri Lanka Positive Growth Negative Growth Zero Growth Items Items Items 30 Full Concession Items 8.8% 6.9% 84.3% No Concession Items 9.3% 8.1% 82.3% Fig.8 PakistaniFig.8 export P akista nitems iexport i ttoem sSri to Sri Lanka Lanka c acategorizedtegorized by positi vbye, n epositive,gative and ze rnegativeo growth and zero growth Pakistani Export Items to Sri Lanka by Growth 3500 3000 2500 2000 Positive Growth Items 1500 Negative Growth Items No Growth Items 1000 Number of Export Items An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 500 0 Full Concession Items No Concession Items 6.1 COMPARISON OF PAKISTAN & INDIA’S TRADE WITH SRI LANKA India has emerged as Sri Lanka’s major source of imports and has outperformed Pakistan despite the fact that both countries have signed FTAs with Sri Lanka. A finer-grained comparison of India and Pakistan’s exports to Sri Lanka is necessary to better understand the challenges Pakistan faces with regards to its trade relationship with Sri Lanka. The total list of Pakistani exports with available data at the 6 digit code comes out to 4070 items. Total exports to Sri Lanka for these items reported by Pakistan equal around USD 292 million (this is different from the total reported exports due to missing data for some exports). India’s total exports for these same items amount to around USD 4.7 billion. India outperforms Pakistan in exports to Sri Lanka in 2834 items on this list of 4070 items, whereas Pakistan outperforms India in a mere 134 items. Fig 9. Comparison of the levels of Pakistan and India’s exports to Sri Lanka 31 Pakistan and India Exports to Sri Lanka at 6 digit HS code Items with equal exports 27% Items with higher Pakistani exports 3% Items with higher Indian exports 70% An Assessment of the Pakistan-Sri Lanka Free Trade Agreement India has a tariff advantage over Pakistan in 21 of the items with available data. India’s export value for these 21 items exceeds Pakistan’s export value for them by around USD 32 million, which is a mere 0.7% of the total export value differential India has over Pakistan. This suggests that India’s superior performance with regards to Sri Lanka is likely not primarily a result of its tariff advantages over Pakistan. The 308 items on which Pakistan has a tariff advantage on India also report higher total Indian exports to Sri Lanka by an amount of USD 230 million. This reasserts the fact that differences in tariffs are not the primary factor in India’s relatively stronger trade relation with Sri Lanka, since even in cases where Pakistan enjoys higher concessions from Sri Lanka India is able to outperform it. Fig.9 Items that India exports larger quantities of to Sri Lanka categorised by the tariffs they face Fig.9 Items that India exports larger quantities of to Sri Lanka categorised by the tariffs they face India Export Advantage by Tariff Differential Export Adv on Items with higher tariffs on Pakistan 5% Export Adv on Items with lower tariffs on Pakistan 1% Export Adv on Items with equal 32 tariffs on both 94% An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 7.0 ANALYSIS OF PAKISTAN’S EXPORTS TO SRI LANKA We will now attempt to pinpoint those Pakistani export items to Sri Lanka at the 6 digit HS code level that require the most attention and have the highest potential to be turned around because of certain favourable metrics associated with them. We will consider items with trade potential higher than or equal to 1 million dollars. Trade potential is given by: Trade Potential therefore gives us a rough picture of the extent to which trade can theoretically be increased for any given item. For example, if Pakistan exports USD 490 million worth of sugar to the world, and Sri Lanka imports USD 260 million worth of sugar from the world, and Pakistan sells USD 30 million worth of sugar to Sri Lanka, Pakistan’s trade potential in this case is (USD 260 million-USD 30 million) USD 230 million. 33 To further help zero in on high potential items we will take into consideration the Compound Annual Growth Rates (CAGR) for Pakistan’s exports to Sri Lanka, Sri Lanka’s imports from the world and Pakistan’s exports to the world. The CAGR is the geometric mean of the individual annual growth rates during a period. It gives you the growth rate that would have gotten your initial value to your final value had the value grown smoothly over the relevant period. If the CAGR for Sri Lanka’s imports of a product X from the world is high, and the CAGR of Pakistan’s exports to the world of product X is similarly high, but the CAGR for Pakistan’s exports of product X to Sri Lanka is relatively low or negative, there is reason to think that some barrier unique to Pak-Sri Lanka trade relations is impeding exports of product X to Sri Lanka. This information coupled with the trade potential for product X can give us a good idea of which items require urgent attention due to their currently wasted potential. The exports of these items to Sri Lanka may be boosted by removing a non-tariff barrier such as a lack An Assessment of the Pakistan-Sri Lanka Free Trade Agreement of awareness among exporters or prohibitively complex regulations that stand in the way of allowing Pakistan to capitalize on the afore-mentioned positive trends vis-à-vis Sri Lanka. The CAGR values can also be used to pinpoint those products that are already performing well as Pakistani exports to Sri Lanka. We can zero in even further on high potential items if we consider Sri Lanka’s tariff rates on India, Sri Lanka’s other South Asian FTA partner, in conjunction with the afore-mentioned metrics. So products that exhibit high trade potential, high-potential CAGR values and a Pakistani tariff advantage over India are particularly deserving of attention. Such items have been compiled into a table later in the report. The list of high potential items is organized by trade potential in descending order with high potential CAGR value items highlighted in blue. The total trade potential for items with trade potential exceeding USD 1 million is USD 1.728 billion. Out of a total of these 275 items, 123 or about 45% show high potential CAGR values. These items show a collective trade potential of USD 548 million and so 30% of total trade potential of all items under consideration is concentrated in high CAGR items. In other words, this potential of USD 545 million lies in items that are growing as Pakistani exports to the world and as Sri Lankan imports from the world. This overview suggests that there is a wealth of items that have experienced favourable trends in their supply and demand by Pakistan and Sri Lanka respectively, and yet these trends have conspicuously failed to encompass the trade relationship between the two countries. 21 of the 275 items have a tariff advantage on India, whereas 242 items show no difference in tariffs imposed on India and Pakistan by Sri Lanka. Only selected items from the total list of 275 are listed in the following tables. Note: All CAGR values are calculated for the period 2004-2013. CAGR values have only been calculated if there are at least 3 consecutive years of recorded exports and at least one year of recorded exports within the period 2010-2013. This is so that the numbers used are recent and consistent enough to be suggestive of future trends. “_” indicates that these requirements are not met, or in the case of non-CAGR values, unavailability of data. “_*” indicates that while export numbers were reported in 2013, the years before did not meet the requirements. As a result this generally indicates very spotty and/or low growth in that particular item and therefore the item should be considered to have not performed well in 34 terms of exports to the country under consideration. A value preceded by “*” indicates that while there were no recorded exports in 2013, the previous years’ numbers met the afore- mentioned requirements for calculating a CAGR. It should be noted that CAGR values furnish a suggestive but imprecise picture of growth trends, since very volatile growth cannot be represented accurately using measures such as CAGR or AAGR (Annual Average Growth Rate). An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 7.1 TRADE POTENTIAL ≥ USD 10 MILLION 38% of all items with trade potential exceeding USD 10 million exhibit encouraging CAGR values. Total trade potential in this bracket is USD 978 million, a very high value owing to the lack of several major Pakistani exports to Sri Lanka for which Sri Lanka has significant demand. Items with trade potential values exceeding USD 10 million and high potential CAGR values include HS 730890 (structures and parts of structures), HS 901890 (instruments used in medical sciences), and HS 870190 (wheeled tractors). 0 0 0 0 0 0 0 0 0 0 30 1.3 13.4 14.9 India Tariff on Tariff 8.30% 9.10% 7.90% 6.70% 7.00% CAGR -1.20% 51.30% 37.60% 27.60% 17.90% 12.50% 48.00% 28.10% 41.00% Pak Export Pak 35 9.20% 7.10% 5.60% 7.20% 9.50% 3.10% 0.90% CAGR Figures in USD Millions USD in Figures 21.60% 14.40% 27.80% 14.20% 21.20% 13.60% 12.20% SL Import _ 9.30% 0.00% 0.00% 1.30% 0.00% 8.70% 2.90% CAGR Pak-SL Pak-SL 43.50% 25.20% 12.40% 73.80% 63.40% -17.30% 0 0 0 0 0 0 0 0 0 0 0 30 7.5 Pak 13.5 Tariff on Tariff 16.01 17.89 17.46 64.07 15.32 44.38 34.66 15.34 46.56 34.60 27.61 15.23 Trade Trade 267.84 222.85 Potential An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 36.16 17.47 20.32 50.11 38.00 33.95 16.48 World World 653.12 279.61 106.25 296.81 495.94 506.66 487.78 Export Pak 2013 Pak TRADE POTENTIAL ≥ USD 10 MILLION 17.98 28.56 16.04 73.48 15.32 46.56 44.38 34.90 46.26 28.37 38.80 World World 312.28 257.24 127.04 Import SL 2013 SL 0.08 0.01 0.03 9.41 0.00 1.25 0.00 0.00 0.23 3.40 0.76 44.44 34.39 23.46 Export to Pak 2013 Pak Product Label Portland cement nes Portland in solid form, Refined sugar, nes table,roof etc w a self- Fans: cont elec mtr of an output nt excdg 125W preparations nes Food Mens/boys trousers and shorts, of cotton, not knitted Denim fabrics of cotton,>/=85%, more than 200 g/m2 Medicaments nes, in dosage Lead-acid electric accumulators of a kind usd f startg piston engines fabrics of Woven cotton,>/=85%, more than 200 g/m2, dyed, nes Structures&parts of structures,i/s (ex prefab bldgs of headg no.9406) for cellular Telephones networks mobile telephones or for other wirele Instruments and appliances used in medical or veterinary sciences, nes fabrics of Woven cotton,>/=85%, not more than 200 g/m2, dyed, nes Wheeled tractors nes 252329 170199 841451 210690 620342 520942 300490 850710 520939 730890 851712 901890 520839 870190 HS Code Table 16. Pakistani export items to Sri Lanka with high CAGR highlighted 16. Pakistani Table 0 0 0 0 75 India Tariff on Tariff 5.00% 6.50% CAGR 41.90% 23.80% -15.80% Pak Export Pak 5.10% 9.30% CAGR -8.90% 25.70% 23.10% 36 SL Import 0.00% CAGR Pak-SL Pak-SL 18.20% 20.30% -14.60% -243.00% 0 0 0 0 75 Pak Tariff on Tariff 13.01 14.30 14.14 13.11 13.05 Trade Trade Potential 14.54 51.54 13.11 53.68 World World 155.45 Export Pak 2013 Pak An Assessment of the Pakistan-Sri Lanka Free Trade Agreement TRADE POTENTIAL ≥ USD 10 MILLION 38.93 15.75 13.56 56.20 13.20 World World Import SL 2013 SL 0.24 1.61 0.55 0.00 0.15 Export to Pak 2013 Pak Product Label Woven fabrics of Woven cotton,>/=85%, not more than 200 g/m2,printed, nes Denim fabrics of cotton, <85% mixed with m-m fib, more than 200 g/m2 Cotton yarn,>/=85%,single ,uncombd,>/=714.29 dtex, nt put up Tobacco, unmanufactured, Tobacco, not stemmed or stripped nes Polystyrene 520859 521142 520511 240110 390319 HS Code 7.2 USD 5 MILLION≤ TRADE POTENTIAL _ _* 0.00% 0.00% 0.00% 0.00% 0.00% CAGR -9.70% Pak-SL Pak-SL 13.20% 22.30% 12.50% 69.70% 28.70% 0 0 0 0 0 0 0 0 0 0 0 20 7.2 Pak Tariff on Tariff 9.64 9.43 9.12 8.76 8.61 8.59 8.62 9.06 8.43 8.05 8.05 7.86 7.73 Trade Trade Potential 9.43 8.80 6.36 8.59 8.23 16.98 10.71 50.26 13.16 World World 115.33 400.80 400.80 150.55 Exports Pak 2013 Pak 9.75 8.66 9.06 9.21 8.18 8.18 9.66 7.73 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 12.19 20.62 22.71 49.09 10.41 World World Imports SL 2013 USD 5 MILLION ≤ TRADE POTENTIAL 38 7.00% 3.40% 3.40% 5.70% CAGR -4.60% 13.60% 13.10% SL Import _* 0.00% 0.00% CAGR Pak-SL Pak-SL 38.60% 53.40% -42.30% -25.00% 0 0 0 30 15 Pak 21.7 21.7 Tariff on Tariff 7.69 7.65 7.48 7.42 7.18 7.19 7.19 Trade Trade Potential 7.98 7.65 7.67 7.44 7.18 18.40 18.40 World World Exports Pak 2013 Pak An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 7.19 7.19 10.98 12.63 17.85 31.88 World World 246.77 Imports SL 2013 USD 5 MILLION ≤ TRADE POTENTIAL _ 39 2.20% 8.70% 9.50% CAGR -1.90% Figures in USD Millions 13.00% 19.10% 18.80% 11.50% 23.10% 16.10% 17.10% 28.10% 17.50% 19.70% SL Import 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% CAGR -7.40% Pak-SL Pak-SL 62.60% 25.90% 20.10% *-2.75% *25.74% *80.58% *-12.85% _ 0 0 0 0 0 0 0 0 0 0 0 0 Pak 22.5 18.1 Tariff on Tariff 4.22 4.14 4.20 4.26 4.32 4.28 4.48 4.48 4.35 4.43 4.35 4.56 4.59 4.68 4.60 Trade Trade Potential 4.25 4.14 4.44 4.28 4.48 4.35 7.07 4.36 4.56 4.59 4.60 18.17 54.58 38.55 12.15 World World Export Pak 2013 Pak An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 4.20 4.26 4.39 4.48 4.43 7.12 5.95 4.68 7.08 26.50 36.15 22.90 11.81 28.04 14.42 World World Import SL 2013 USD 1 MILLION ≤ TRADE POTENTIAL 40 Export Pak 4.20% 6.70% CAGR 13.70% 11.40% 19.40% SL Import 0.00% 0.00% 0.00% 0.00% CAGR Pak-SL Pak-SL -15.00% 0 0 0 0 30 Pak Tariff on Tariff 4.00 4.07 3.97 4.10 3.86 Trade Trade Potential An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 4.00 4.14 6.34 64.86 13.00 World World Export Pak 2013 Pak 9.54 4.07 3.97 4.10 3.86 World World Import SL 2013 USD 1 MILLION ≤ TRADE POTENTIAL 41 Pak Pak 9.00% 1.00% CAGR Export 27.60% 13.30% 25.10% 31.00% 21.10% 94.90% 55.10% 48.20% 167.00% Figures in USD Millions USD in Figures 9.20% 7.70% 9.50% 9.80% 8.70% CAGR 26.90% 12.30% 28.90% 12.40% 12.70% 17.60% SL Import 0.00% 3.80% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% CAGR -8.30% Pak-SL Pak-SL -18.40% -50.20% 0 0 6 0 0 0 0 0 0 0 Pak 18.1 Tariff on Tariff 4.43 1.98 2.41 2.64 2.12 1.62 5.36 1.19 1.32 1.40 46.56 Trade Trade Potential An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 7.07 1.98 3.58 2.12 1.62 5.36 1.40 50.11 85.72 28.37 World World 145.15 Exports Pak 2013 Pak 4.43 3.73 2.45 2.64 4.11 2.11 1.51 1.40 46.56 11.24 37.96 World World SL 2013 Impo-rts HIGH POTENTIAL ITEMS WITH TARIFF ADV. OVER INDIA OVER ADV. HIGH POTENTIAL ITEMS WITH TARIFF SL 0.00 0.00 0.00 0.04 0.00 0.00 0.00 0.00 0.32 0.08 0.00 Export to Pak 2013 Pak Product Label Razors including safety razors and open blade type Structures&parts of structures,i/s (ex prefab bldgs of headg no.9406) Hair preparations, nes Dates, fresh or dried blouses Womens/girls and shirts,of other textile materials,not knitted Cartons, boxes and cases, of corrugated paper or paperboard briefs Womens/girls and panties, of other textile materials, knitted Prep of cereals,flour,starch/ milk f infant use,put up f retail sale Plain weave cotton fab,<85% mixd w m-m fib,not more than 200 g/m2,bl Dyed fabrics, knitted or crocheted, of artificial fibres, of a width o Table, kitchen or other Table, household articles and and pot parts thereof, scourers and scourin 80410 821210 730890 330590 620690 481910 610829 190110 521021 600642 761510 HS Code Table 18. Pakistani export items to Sri Lanka with high potential and tariff adv. over India export items to Sri Lanka with high potential and tariff adv. 18. Pakistani Table 7.5 HIGH TRADE POTENTIAL AND FAVOURABLE CAGR ITEMS THAT SHOULD RECEIVE TARIFF CONCESSIONS The following table lists the 32 items with trade potential exceeding $1 million and favourable CAGR metrics that face tariffs from Sri Lanka. The collective trade potential of these items is around $700 million. Particular attention should be paid to HS 32 Tanning and dyeing extracts (2 items on list), HS 39 Plastics (4 items on list), HS 61 Articles of Apparel (2 items on list), HS 84 Machinery and Nuclear reactors (3 items on list) and HS 85 Electrical and electronic equipment (3 items on list). 30 30 27 75 30 30 30 20 30 30 30 15 13.4 14.2 India Tariff on Tariff 42 Pak 7.00% CAGR 35.30% 13.30% 41.90% 27.90% 40.60% 82.00% 13.40% 73.30% 47.30% 24.40% 97.90% 19.10% Exports 118.60% Figures in USD Millions SL 7.70% 5.10% 9.30% 8.60% 6.30% CAGR 13.10% 14.80% 39.00% 12.30% 12.20% 42.60% 15.20% 14.70% 12.20% Imports 3.80% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.50% CAGR -8.30% -1.60% Pak-SL Pak-SL -17.30% 6 30 75 30 30 30 30 20 30 30 30 15 Pak 13.5 14.2 Tariff on Tariff 7.65 5.71 2.41 1.40 1.05 2.53 1.85 9.43 1.18 3.13 1.40 6.80 13.11 17.46 Trade Trade Potenti-al An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 7.65 5.71 3.07 1.12 1.85 9.43 1.18 4.82 1.40 7.48 85.72 13.11 17.47 World World 119.23 Exports Pak 2013 Pak SL 2.45 1.40 7.70 2.59 9.82 7.90 3.13 3.68 18.43 56.20 28.56 12.19 21.98 246.77 Imports 2013World 2013World HIGH TRADE POTENTIAL AND CAGR ITEMS FACING TARIFFS HIGH TRADE POTENTIAL AND CAGR ITEMS FACING SL 0.00 0.00 0.04 0.00 0.00 0.07 0.06 0.01 0.00 0.00 0.00 0.00 0.00 0.69 Export to Pak 2013 Pak Product Label Milk and cream powder unsweetened exceeding 1.5% fat Peas dried, shelled, Peas whether or not skinned split Dates, fresh or dried Black tea (fermented)&partly fermentd tea in packages not exceedg 3 kg Tobacco, unmanufactured, Tobacco, not stemmed or stripped Sodium hydroxide (caustic soda) solid Mucilages & thickeners derived from locust beans & seeds or guar preparations nes Food Synthetic organic pigments and preparations based thereon Paints & varni based on Paints polymers dissolv in a non aqueous solv nes Surface-active preparations, washing and cleaning preparations, nes Polystyrene, expansible Polystyrene, Fittings, plastic Film and sheet etc, non- cellular etc, of polymers propylene 040221 071310 080410 090230 240110 281511 130232 210690 320417 320890 340290 390311 391740 392020 HS Code Table 19. High potential Pakistani export items to Sri Lanka facing tariffs 19. High potential Pakistani Table 15 30 17 15 30 8.8 7.2 22.5 21.7 41.2 21.4 28.1 17.5 India Tariff on Tariff Pak Pak 43 8.50% CAGR -1.90% 37.30% 80.20% 39.90% 19.40% 62.50% 61.70% 21.10% 21.50% 56.00% 51.30% 29.90% Exports 3.40% 5.10% 7.00% 7.70% 6.70% 8.70% CAGR 1.70% 6.90% 37.50% 28.10% 21.40% 14.40% 765.00% SL Imports _* _* 0.00% 0.00% 3.70% 0.00% 0.00% 0.00% 0.00% CAGR 0.00% 0.00% 0.00% Pak-SL Pak-SL -25.00% 15 30 30 15 8.8 7.2 Pak 22.5 21.7 41.2 22.5 31.2 18.1 17.5 Tariff on Tariff 1.11 4.48 7.19 8.59 3.32 7.42 6.50 4.00 4.43 3.82 1.29 11.46 15.32 Trade Trade Potenti-al An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 8.59 7.44 6.64 4.00 7.07 3.82 5.83 81.24 38.55 18.40 15.51 11.46 20.32 World World Exports Pak 2013 Pak SL 1.11 4.48 7.19 3.42 6.50 9.54 4.43 8.45 1.29 10.41 17.85 21.23 15.32 Imports 2013World 2013World HIGH TRADE POTENTIAL AND CAGR ITEMS FACING TARIFFS HIGH TRADE POTENTIAL AND CAGR ITEMS FACING SL 0.00 0.00 0.00 0.00 0.10 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Export to Pak 2013 Pak Product Label Pullovers,cardigans&similar articles of oth textile materials,knittd Paper and paperboard, Paper surface-coloured, surface- decorated or printed, Sacks and bags (including cones) of polymers ethylene Footwear, nes Footwear, Gloves, mittens and mitts, nes, of other textile materials, knitted Flat rolled prod,i/ nas,plated or coated with zinc,>/=600mm wide, nes Ceramic sinks, wash basins etc & similar sanitary fixtures nes Lead refined unwrought Air conditioning machines window or wall types, self- contained Razors including safety razors and open blade type Washing,bleachg or dyeg Washing,bleachg machines (o/t of headg No 84.50) Pts of mach nes f the ind prep/mfr food etc ex f ex/ prep veg fat/oil Lead-acid electric accumulators of a kind usd f startg piston engines 611090 481159 392321 640590 611699 721049 691090 780110 841510 821210 845140 843890 850710 HS Code 14 30 15 1.4 30.6 India Tariff on Tariff Pak Pak CAGR -0.60% 42.00% 79.30% 74.10% Exports 129.60% 1.60% 2.80% CAGR -1.50% 30.40% 19.50% SL Imports 44 0.00% 0.00% 0.00% 0.00% CAGR -3.80% Pak-SL Pak-SL 14 30 15 Pak 21.7 30.6 Tariff on Tariff 1.77 2.71 1.91 1.58 10.71 Trade Trade Potenti-al 1.77 9.44 1.91 1.77 10.92 World World Exports Pak 2013 Pak SL 2.71 1.58 14.94 11.24 11.36 Imports An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 2013World 2013World HIGH TRADE POTENTIAL AND CAGR ITEMS FACING TARIFFS HIGH TRADE POTENTIAL AND CAGR ITEMS FACING SL 0.00 0.21 0.00 0.00 0.00 Export to Pak 2013 Pak Product Label Boards,panels,includg numerical control panels,for a voltage > 1,000 V Motor vehicle parts nes Surveyg,hydrographic,oce anographic,meteorologic/ geophysical inst nes Optical fibre cables, made up of individually sheathed fibres flasks/vacuum Vacuum vessels complete w/ cases;parts o/t glass inners 853720 870899 901580 854470 961700 HS Code 7.6 TWO DIGIT HS CODES WITH HIGH TRADE POTENTIAL The following table lists high trade potential HS codes for Pakistani export items to Sri Lanka. Items within the HS codes that display considerable potential for growth include cement, which is already a major export to Sri Lanka, polystyrene, various clothing items and medical instruments and articles of iron and steel such as plates and rods used in construction. It should be noted that trade potential values show the theoretical capacity for expanding trade with a particular country. In other words, the values signify the amount of trade Pakistan could do with Sri Lanka if both countries did as much trade with one another as possible (given the supplying capacity of one and the total demand of the other) before moving on to trade with other countries. Therefore trade potential values are not the same as rigorous projections of a best-case-scenario for any given export item vis-à-vis Sri Lanka. Table 20. Two digit HS codes with high potential Pakistani exports to Sri Lanka Figures in USD Millions 45 HS CODES WITH HIGH TRADE POTENTIAL Total Trade Potential in USD Main Products at 6 Digit HS HS Code Product Name Millions code with high potential Nuclear reactors, boilers, machinery Fans, Air conditioners, 84 and mechanical appliances; parts 442 Refrigerators thereof Salt, sulphur, earth, stone, lime and Portland Cement, Gypsum, 25 297 cement Cut Marble Woven cotton fabrics, denim 52 Cotton 244 fabrics 17 Sugars and sugar confectionary 233 Refined sugar 39 Plastics 107 Polystyrene Electrical machinery and equipment and parts thereof; sound recorders 85 and reproducers, television image and 103 Telephone sets sound recorders and reproducers, and parts and accessories of such articles. 30 Pharmaceutical products 79 Medicaments Plates, rods etc. for use in 73 Articles of iron or steel 75 structures An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Articles of apparel and clothing 62 72 Jackets, blazers, trousers etc. accessories, not knitted or crocheted. Woven fabrics, plain weave 55 Manmade staple fibres 66 polyester Vehicles other than railway or Wheeled tractors, motor 87 tramway rolling-stock, and parts and 61 vehicle parts accessories thereof. Optical, photographic, cinematographic, measuring, 90 checking, precision, medical or 50 Medical instruments surgical instruments and apparatus; parts and accessories thereof. Edible vegetables and certain roots 7 43 Onions, shallots, potatoes and tubers Articles of apparel and clothing 61 30 T-shirts, gloves accessories, knitted or crocheted. 7.7 TWO DIGIT HS CODES WITH HIGH TRADE POTENTIAL AND FAVOURABLE CAGR VALUES The following table lists 2 digit HS codes that have the highest concentration of trade potential within favourable CAGR items at the 6 digit HS code level. This is to say that several items within these 2 digit HS codes have witnessed growth as Pakistani exports and as Sri Lankan imports and also have high trade potential, and yet their flow between the two countries has decreased or stagnated. It should be noted that several HS codes from the previous table are listed here as well, suggesting that many high potential HS codes also exhibit favourable CAGR values. These HS codes indicate a breadth of opportunity for expansion in Pak-Sri Lanka trade, since favourable trends are already firmly in place- what is required is the removal of obstructions unique to Pak- Sri Lanka trade. Table 21. Two digit HS codes with Pakistani exports to Sri Lanka with high CAGR items Figures in USD Millions HS CODES WITH HIGH TRADE POTENTIAL AND FAVOURABLE CAGR VALUES Total Trade Potential in USD Number of high potential 46 HS Code Product Label millions items at 6 digit HS code 73 Articles of iron or steel 53 3 Optical, photographic, cinematographic, measuring, 90 checking, precision, medical or 43 4 surgical instruments and apparatus; parts and accessories thereof. 39 Plastics and articles thereof. 34 11 Vehicles other than railway or 87 tramway rolling-stock, and parts and 31 3 accessories thereof. Electrical machinery and equipment and parts thereof; sound recorders 85 and reproducers, television image and 29 6 sound recorders and reproducers, and parts and accessories of such articles. Nuclear reactors, boilers, machinery 84 and mechanical appliances; parts 27 9 thereof 21 Miscellaneous edible preparations. 17 1 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Articles of apparel and clothing 62 16 3 accessories, not knitted or crocheted. Articles of apparel and clothing 61 15 6 accessories, knitted or crocheted. 52 Cotton 14 2 This table indicates that a mere 48 items at the 6 digit HS code have a total trade potential of over USD 275 million along with high potential CAGR values that have so far not been used to bolster trade between the two countries. It should be noted that cotton and articles of iron and steel are already within the top ten Pakistani exports to Sri Lanka, and this suggests that it will be relatively easier to boost exports of products within these HS codes owing to established trade relationships. Furthermore, HS 61 Articles of Apparel and HS 85 Electrical equipment are in the top 20 Pakistani exports to Sri Lanka. HS codes on this high potential list that face significant tariffs from Sri Lanka are HS 39 Plastics, HS 61 Articles of Apparel, HS 84 Machinery and Nuclear reactors and HS 85 Electrical equipment. These HS codes account for USD 105 million trade potential, and the fact that they face tariffs suggests that concessions may be an important step towards realizing this potential. 7.8 COMPARISON WITH INDIA FOR HIGH POTENTIAL PAKISTANI PRODUCTS Pakistan’s total volume of trade in these 275 items is a little over USD 206 million, whereas India’s total volume of trade in these items is over USD 1.4 billion. India outperforms Pakistan in exports to Sri Lanka in 84% of the items within this category, whereas Pakistan outperforms India in only 9%. Fig.10 Comparison between India and Pakistan in items with high potential for Pakistani exports to Sri Lanka India and Pakistan Comparison for Pakistan's High Potential Items Items with Items with equal Pakistani exports 47 advantage 7% 9% Items with Indian advantage 84% These high trade potential items already account for around 65% of Pakistan’s total exports to Sri Lanka, whereas they account for only 29% of India’s total exports. This suggests that India’s primary exports to Sri Lanka lie in items other than these, and therefore Pakistan does not have to go up against India’s primary exports in its attempt to expand its high potential An Assessment of the Pakistan-Sri Lanka Free Trade Agreement items. Out of the 275 high trade potential items considered Pakistan has a tariff advantage on India in 21 items, whereas India has a tariff advantage over Pakistan on 5. Therefore around 91% of these items offer a level playing field to both countries with regards to the Sri Lankan market. This strongly suggests that Pakistan’s relatively lacklustre performance within these high potential items is not primarily due to tariff advantages afforded to India. 7.9 ITEMS ON SRI LANKA’S NO-CONCESSION LIST WITH PAKISTAN RCA ADVANTAGE As already discussed, the central impediments to Pakistan’s exports to Sri Lanka do not seem to be the level of tariffs imposed. Even so, a closer look at Sri Lanka’s no-concession list shows that Pakistan exhibits a revealed comparative advantage in 56 items out of the total 568 items with available data. Revealed comparative advantage is given by the following equation: It indicates a country’s relative efficiency in exporting a good, since it compares the share of an export item in a country’s bundle of export goods to the same export item’s share in the 48 world’s bundle of export goods. If the latter exceeds the former, RCA>1 and the country can be said to be “disproportionately” good at exporting the good in question and therefore have a revealed comparative advantage in it. The table on the following page which shows a selection of these items suggests that Pakistan has both trade potential and significant RCA advantage in both rice and potatoes which face Tariff Rate Quota restrictions from Sri Lanka. These 56 items have a total trade potential of about USD 47 million, and should be considered for tariff concessions. An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 7.52 Adv. 41.36 13.16 64.296 42.864 41.736 36.096 73.696 73.696 27.448 15.792 15.792 12.784 12.032 125.584 Pak RCA Pak 0 0 0 0 0 0 0 0 9.4 1.88 3.76 3.76 1.88 3.76 13.16 SL RCA Figures in USD Millions USD in Figures 7.52 41.36 26.32 66.176 46.624 51.136 36.096 73.696 73.696 29.328 15.792 15.792 12.784 15.792 129.344 Pak RCA Pak 0.00 0.00 0.00 0.23 0.21 0.01 0.00 2.76 0.97 0.00 0.00 0.05 9.21 -0.02 -10.25 Growth 2004-2013 49 _ 0.56 0.82 0.01 0.20 1.76 0.22 0.09 7.14 5.97 0.08 0.04 1.91 0.28 16.30 Trade Trade potential 30 30 19 11 30 30 29 30 14 30 31 64 30 136 220 Tariff on Pak Tariff 3.36 2013 82.49 19.08 11.35 64.25 74.93 49.50 57.64 28.65 11.20 90.80 158.95 274.07 130.26 Exports 1,790.21 Pak World World Pak 0.43 2.10 0.56 0.82 0.01 8.74 0.23 0.09 0.08 0.02 0.04 1.91 0.36 17.53 28.39 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement SL World SL World Imports 2013 Imports PAKISTAN RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE PAKISTAN 0.23 0.34 0.00 0.00 0.00 2.76 0.01 0.00 0.01 0.97 0.00 0.00 0.08 10.39 12.09 2013 to SL Pak Pak Exports Product Label Ethyl alcohol and other spirits, denatured, other and alcohol Ethyl of any strength Leather further prepared after tanning or crusting "incl. parchment-dr Goat meat, fresh, chilled or frozen Knottd nettg of twine/cordage/ rope,nes,and made up nets of oth tex mat Rice, husked (brown) Undenaturd ethyl alcohol of an strgth by vol of 80% vol/higher Fruits, dried nes Fruits, Manicure or pedicure sets and instruments (including nail files) Rice, semi-milled or wholly milled, whether or not polished glazed Sesamum seeds, whether or not broken frozen Potatoes, Potatoes, fresh or chilled nes Potatoes, Soap&orgn surf prep,shapd,nes;papers&nonwovens impreg w soap/prep,nes Milk and cream powder sweetened exceeding 1.5% fat Articles of bedding/furnishing, nes, stuffed or internally fitted 220720 411310 020450 560890 100620 220710 081340 821420 100630 120740 071010 070190 340119 040229 940490 HS code Table 21. Pakistani export items on no concession list with an RCA adv. over Sri Lanka export items on no concession list with an RCA adv. 21. Pakistani Table FTA Section 3 Section Analysis of Sri of Analysis Lanka’s Exports Exports Lanka’s to Pakistan under to Pakistan An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 8.0 PRELIMINARY ANALYSIS OF SRI LANKAN EXPORTS TO PAKISTAN UNDER FTA All top 20 items at two digit HS code with the exception of HS 39 (Plastics), which experienced a reduction of 500,000 dollars, have experienced growth in their imports by Pakistan, though the absolute level of Sri Lankan imports remains low. The highest growth occurred in HS09 (Coffee, tea) imports, which grew by over 12 million dollars. Table 22. Major Sri Lankan exports to Pakistan Figures in USD Millions TOP SRI LANKAN EXPORTS TO PAKISTAN Equivalent ad valorem tariff Growth in HS Code Product label Value in 2004 Value in 2013 applied by Exports Pakistan to Sri Lanka 09 Coffee, tea, mate and spices 6.87 19.51 12.64 3.4 40 Rubber and articles thereof 10.79 14.47 3.68 5.5 51 Vegetable plaiting materials, 14 3.66 11.96 8.30 17.1 vegetable products nes Edible fruit, nuts, peel of citrus fruit, 08 2.50 9.96 7.47 6.4 melons Wood and articles of wood, wood 44 2.23 9.72 7.49 4.4 charcoal Edible vegetables and certain roots 07 0.00 3.46 3.46 1 and tubers Residues, wastes of food industry, 23 0.08 1.93 1.85 3.7 animal fodder Special woven or tufted fabric, lace, 58 0.00 1.61 1.61 8.2 tapestry etc 38 Miscellaneous chemical products 0.04 1.25 1.21 3.1 Pulp of wood, fibrous cellulosic 47 0.00 1.12 1.12 0.8 material, waste etc 54 Manmade filaments 0.00 0.82 0.82 6.1 Animal,vegetable fats and oils, 15 0.40 0.80 0.40 16.1 cleavage products, etc Vegetable textile fibres nes, paper 53 0.37 0.74 0.38 5.6 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement yarn, woven fabric Articles of apparel, accessories, not 62 0.00 0.63 0.63 22.7 knit or crochet Paper and paperboard, articles of 48 0.29 0.62 0.33 6.9 pulp, paper and board 69 Ceramic products 0.02 0.51 0.49 9.7 Essential oils, perfumes, cosmetics, 33 0.02 0.49 0.48 9.8 toileteries Articles of apparel, accessories, knit 61 0.07 0.40 0.34 22.8 or crochet 39 Plastics and articles thereof 0.88 0.37 -0.50 9.5 76 Aluminium and articles thereof 0.14 0.36 0.22 3.9 A look at the available data at the 6-digit HS code level further fills in this grim picture. Out of 4905 items at full concession, a meagre 134 items showed growth, 65 showed contraction in exports, and 4706 showed no change, with all of the unchanged items reporting 0 exports in both 2004 and 2013. Only 147 items reported any exports at all in 2013, which is 3% of total concession items. This was up from 1.7% of all concession items showing any exports in 2004. There were total concession item exports by Sri Lanka in 2013 to Pakistan of about USD 66 million, up from exports of about USD 29 million in 2004, a rise of 130%. Out of a total of 540 no concession items, data was available for 484. 44 no concession items showed growth, 16 fell in Sri Lankan exports to Pakistan, and 424 remained unchanged, all of these having reported 0 exports in both 2004 and 2013. 51 non-concession items reported exports in 2013, up from 25 in 2004. There were total non-concession item exports by Sri Lanka to Pakistan of USD 17.2 million in 2013, up from exports of USD 10.4 million in 2004, a rise by 64%. This brief overview confirms that the Pakistan-Sri Lanka FTA has failed to improve either country’s fortunes very significantly. We have already seen that huge potential exists for Pakistani exports to Sri Lanka, confirmed by trends in supply and demand, unhindered by excessive tariffs. A similar analysis of Sri Lankan exports at the 6 digit HS code level will reveal whether a similar amount of potential trade is going unrealized for goods coming into 52 Pakistan from Sri Lanka. Table 23. Sri Lankan export items with positive, negative or zero growth in exports to Pakistan Positive Growth Negative Growth Zero Growth Items Items Items Full Concession Items 2.7% 1.4% 95.9% No Concession Items 9% 3.3 % 87.7% Fig.11 Sri Lankan export items to Pakistan categorized by positive, negative and zero growth Fig.11Sr iLankan export items to Pakistan categorized by positive, negative and zero growth Sri Lankan Exports to Pakistan by Growth 5000 4500 4000 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 3500 3000 Positive Growth Items 2500 Negative Growth Items 2000 No Growth Items 1500 Number of Export Items 1000 500 0 Full Concession Item No Concession Items 8.1 COMPARISON OF SRI LANKA AND CHINA TRADE WITH PAKISTAN It may be useful to compare China and Sri Lanka’s trade relationships with Pakistan since in addition to Pakistan and China having an FTA, a China-Sri Lanka FTA is currently under negotiation. China’s dominance in Pakistani imports is unsurprising, (Sri Lankan imports to Pakistan are around 1% of China’s USD 6.6 billion exports to Pakistan), but a closer look at trade figures can reveal any disproportionate advantages conferred by tariff differentials. For the 5445 export items at the 6 digit HS code level for which data is available for Sri Lanka, there are a corresponding 4226 items with available data for China. China’s total exports of these 4226 products to Pakistan amount to around USD 6.6 billion (nearly the entirety of its exports to Pakistan), whereas Sri Lanka’s exports of these 4226 products comes out to USD 63 million. China outperforms Sri Lanka in the exports of 3261 items to Pakistan, whereas Sri Lanka outperforms China in 55 items. China has a tariff advantage over Sri Lanka on a mere 278 items out of the total 4226 for 53 which data is available, and within these items it’s export advantage over Sri Lanka is a little over USD 300 million. Therefore, the 7% of export items that have tariff advantages account for 5% of China’s total export advantage over Sri Lanka, suggesting that the items with tariffs favouring China are not benefitting from the tariff policy to a disproportionate extent. Moreover, Sri Lanka faces greater concessions from Sri Lanka than does China in 3372 items, 80% of the items under consideration, once again suggesting that the fledgling state of Pakistan-Sri Lanka relations cannot be accounted for primarily by lack of tariff concessions. Fig. 12 Comparison between China and Sri Lanka export items to Pakistan China and Sri Lan ka exports to Pakistan at 6 digit HS code Items with equal exports 22% An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Items with higher Sri Lankan exports 1% Items with higher Chinese exports 77% The following chart indicates the relative insignificance of items with higher Pakistani tariffs on Sri Lanka in terms of China’s export differential over Sri Lanka. Fig 13. Items that China exports larger quantities of to Pakistan categorised by the tariffs they face China Export advatage on Sri Lanka by Tariff differential Export Adv on Export Adv on Items with equal Items with higher tariffs tariff on Sri Lanka 2% 4% Export Adv on Items with lower 54 tariffs on Sri Lanka 94% An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 9.0 ANALYSIS OF SRI LANKA’S EXPORTS TO PAKISTAN We will now use the same approach as in our analysis of Sri Lankan imports from Pakistan to try and determine which Sri Lankan exports to Pakistan should be considered high priority items due to the metrics associated with them. We will once again be categorizing the items by trade potential while also bringing to bear CAGR information on our outlook. There are 247 items with trade potential exceeding USD 500,000, out of which 161 (65%) items show high potential CAGR values. The total trade potential for these 247 items is USD 1.08 billion. The total trade potential for the 161 favourable CAGR items is USD 878 million, indicating that most of the trade potential for Sri Lankan exports to Pakistan lies in products that already face trends conducive to the expansion of trade. This brief overview suggests that Sri Lanka too has export items that have experienced favourable trends in Pakistani demand and Sri Lankan supply but that have failed to make headway in the Pakistani market. Moreover, the fact that 91% of the 247 items face zero tariffs from Pakistan strongly suggests that the lacklustre state of trade here too is not primarily a 55 consequence of tariff disadvantages. Only selected items from the total 247 are listed in the following tables. 9.1 TRADE POTENTIAL ≥ USD 10 MILLION 79% of the 19 items in this category have high potential CAGR values associated with them. The total trade potential in this category equals USD 656 million. The highest amount of trade potential resides in HS 090240 (Black Tea) which faces a Tariff Rate Quota from Pakistan, wherein it only utilizes around 20% of its duty-free allowance. However, no other items in this category face any tariffs. The items are listed in the table on the following page. An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 Tariff on SL Tariff _* 9.38% 5.79% 5.65% 6.65% CAGR 45.31% 17.55% 25.28% 12.35% 17.39% 88.33% 10.28% 23.61% 22.25% 17.12% 16.03% -10.25% 114.73% SL Exports Figures in USD Millions _* Pak Pak 9.31% 7.14% 6.70% 6.23% 5.06% CAGR 33.45% 22.35% 27.59% 14.20% 20.85% 31.69% 21.14% 54.36% 17.32% 11.30% 18.26% Imports 137.52% _* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% CAGR SL-Pak SL-Pak 54.91% 73.95% -41.29% -25.98% -10.90% 56 10.85 11.17 11.65 17.84 17.15 16.97 14.86 11.76 19.96 30.00 28.67 26.77 24.02 21.50 20.79 30.14 31.12 Trade Trade 310.96 Potential 2013 10.85 37.06 11.65 55.55 18.21 17.45 14.86 11.76 19.96 38.75 28.67 28.42 27.49 25.19 21.65 30.15 31.12 World World 800.69 Exports Sri Lanka 42.96 11.17 90.70 17.84 20.88 16.72 72.92 28.55 30.00 26.77 24.02 21.50 20.80 42.63 World World 168.13 815.80 313.15 Imports 7,164.59 Pak 2013 Pak Pak 0.00 0.00 1.06 0.00 0.00 0.48 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.18 0.01 0.00 SL 2013 Export to TRADE POTENTIAL ≥ USD 10 MILLION An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Product label Electric conductors, for a voltage not exceeding 80 V, nes Electric conductors, for a voltage not exceeding 80 V, Tobacco, unmanufactured, partly or wholly stemmed stripped Tobacco, Pneumatic tires new of rubber for buses or lorries Lead refined unwrought Articles of vulcanised rubber nes, other than hard Waste&scrap of paper or paperboard,nes (includg unsorted Waste&scrap waste&scrap) Gaskets, washers and other seals of vulcanised rubber Areca nuts Unusd postage,revenue stamps;cheque forms,banknotes,bond certific,etc Boards,panels,includg numerical control panels,for a voltage <=1000 V Animal feed preparations nes Transformers electric power handling capacity not exceeding 1 KVA, Transformers nes Tricycles, scooters, pedal cars and similar wheeled toys; dolls'' carr Tricycles, Measuring or checking instruments, appliances and machines, nes for use with the apparatus of headg no. 85.35,85.36 or 85.37,nes Parts Black tea (fermented) & partly fermented in packages exceedg 3 kg preparations nes Food Other petroleum oils and preparations 854449 240120 401120 780110 401699 470790 401693 080280 490700 853710 230990 850431 950300 903180 853890 090240 210690 271019 HS Code Table 24. Sri Lankan export items to Pakistan with high CAGR items highlighted 24. Sri Lankan export items to Pakistan Table 9.2 USD 5 MILLION≤ TRADE POTENTIAL 57 _* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% CAGR SL-Pak SL-Pak 31.32% 59.59% -24.47% 226.00% 118.63% 9.32 7.49 7.11 7.08 6.89 6.53 6.39 6.11 5.81 5.23 5.04 6.32 5.77 5.52 5.45 Trade Potential 6.89 6.53 6.11 5.81 5.23 5.52 5.75 2013 26.96 11.80 20.77 16.74 12.13 11.19 20.64 17.73 World World Exports Sri Lanka 9.53 7.49 7.11 7.08 9.53 6.39 5.04 9.95 34.03 12.75 15.17 34.26 24.31 63.16 38.98 World World Imports Pak 2013 Pak Pak 0.21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.64 0.00 0.30 11.96 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement SL 2013 Export to USD 5 MILLION≤ TRADE POTENTIAL < 10 MILLION Product label Tableware and kitchenware of porcelain or china Tableware Carboys, bottles, flasks, jars, pots, phials and other containers, of of artificial staple fibres, single, not put up Yarn,>/=85% Printed circuits Aircraft nes of an unladen weight > 2,000 kg but not exceedg 15,000 kg Articles of plastics or other materials Nos 39.01 to 39.14 nes Articles of jewellry&pt therof of/o prec met w/n platd/clad w prec met Boards,panels,includg numerical control panels,for a voltage > 1,000 V Rice, semi-milled or wholly milled, whether not polished or glazed Vegetable products nes Vegetable Lead-acid electric accumulators nes Narrow woven fab,cntg by wt>/=5% elastomeric yarn/ rubber thread nes Medium density fibreboard MDF of wood, a thickness > 9 mm Mach f fil/clos/seal/etc.btle/can/box/ bag/ctnr nes,mach aeratg bev cubes and sim nes, glazed ceramics Tiles, 691110 701090 551011 853400 880230 392690 711319 853720 100630 140490 850720 580620 441114 842230 690890 HS Code Table Table 25. Sri Lankan export items to Pakistan with high CAGR items highlighted 9.3 USD 1 MILLION ≤ TRADE POTENTIAL 58 _* 0.00% 0.00% 0.51% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% CAGR -4.22% -9.03% -8.21% SL-Pak SL-Pak -15.37% -13.53% 4.95 4.84 4.63 4.53 4.36 4.27 4.18 4.13 4.10 3.83 3.78 3.75 3.53 3.29 3.13 3.06 Trade Potential 4.84 4.63 7.55 4.22 8.25 4.10 3.90 8.61 3.29 6.21 2013 13.50 10.10 10.85 46.26 12.61 24.44 World World Exports Sri Lanka 5.11 4.59 4.60 4.27 4.13 4.92 3.83 3.78 3.75 3.57 7.00 3.15 3.07 10.05 53.45 22.16 World World Imports Pak 2013 Pak Pak 5.09 0.00 0.00 0.06 0.25 0.00 0.04 0.00 0.00 0.00 0.00 0.00 0.04 0.00 0.02 0.01 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement SL 2013 Export to USD 1 MILLION ≤ TRADE POTENTIAL 59 _* _* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% CAGR -8.38% SL-Pak SL-Pak 21.98% -28.86% 1.00 0.98 0.97 0.95 0.95 0.94 0.94 0.93 0.88 0.86 0.85 0.85 0.84 0.84 0.83 0.82 0.82 0.82 0.82 0.81 0.80 0.75 0.75 Trade Potential 1.00 3.57 1.66 3.10 0.94 0.94 0.93 0.88 8.15 3.79 0.84 0.83 0.82 0.82 0.82 0.82 0.81 0.80 7.77 0.75 2013 22.59 14.39 59.29 World Exports Sri Lanka 2.35 1.01 0.98 0.95 1.16 6.79 3.05 0.86 0.85 0.85 5.61 4.90 3.39 1.02 0.86 1.63 3.44 0.75 4.43 21.63 15.99 37.06 13.88 World World Imports Pak 2013 Pak Pak 0.00 0.03 0.01 0.00 0.22 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.06 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2013 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Export to Sri Lanka USD 500,000 ≤ TRADE POTENTIAL 60 Figures in USD Millions USD in Figures Pak Pak 5.06% 8.99% 3.71% 0.23% 9.48% 5.59% CAGR 37.87% 37.95% 11.88% 12.99% 32.80% Imports _* _* _* _* _* _* 0.00% CAGR SL-Pak SL-Pak 13.90% -10.90% -24.47% -60.42% 6.53 4.75 2.12 1.50 1.48 0.82 0.63 0.56 0.52 0.51 Trade 310.96 Potential 6.53 9.91 1.71 1.77 0.82 0.71 0.57 0.54 2.04 2013 28.65 World World 800.69 Exports Sri Lanka 4.79 2.13 6.68 1.49 9.85 9.33 0.51 34.03 18.06 World World 313.15 Imports 1,610.01 Pak 2013 Pak An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Pak 2.18 0.00 0.04 0.01 0.21 0.01 0.00 0.08 0.02 0.01 0.00 2013 Sri Lanka Exports to HIGH TRADE POTENTIAL AND CAGR ITEMS FACING TARIFFS HIGH TRADE POTENTIAL AND CAGR ITEMS FACING Product label Black tea (fermented) & partly fermented in packages exceedg 3 kg Articles of plastics or other materials Nos 39.01 to 39.14 nes Sacks and bags (including cones) of polymers of ethylene Sacks, bags, packing, of strip plastic material Edible mx/prep of animal/veg fats&oils/of fractions ex hd No 15.16 Household and toilet articles nes, of plastics Self-adhesive plates,sheets,film etc,of plastic Self-adhesive in rolls <20 cm wide Palm oil and its fractions refined but not Palm chemically modified Hair shampoos Stoppers, lids, caps and other closures of plastics Inner tubes of rubber for bicycles 090240 392690 392321 630533 151790 392490 391910 151190 330510 392350 401320 HS Code Table 28. Sri Lankan export items to Pakistan with high CAGR items highlighted 28. Sri Lankan export items to Pakistan Table 9.6 TWO DIGIT HS CODES WITH HIGH TRADE POTENTIAL The following table identifies Sri Lankan export items to Pakistan at 2 digit HS codes which have high trade potential. Items within the HS codes that represent high proportions of the potential include black tea, tires for buses and lorries, food preparations and ethylene sacks and bags. It should be noted that while tea faces a tariff rate quota, its imports from Sri Lanka fall far below the allowance that has been made for duty free imports, suggesting that Sri Lanka has lost much of the Pakistani tea market. Table 29. Two digit HS codes with high potential Sri Lankan exports to Pakistan Figures in USD Millions HS CODES WITH HIGH TRADE POTENTIAL Main Products at 6 Total Trade Potential in HS Code Product Label Digit HS code with high USD Millions potential 09 Coffee, tea, mate and spices 327 Black tea 61 Transformers, numerical 85 Electrical, electronic equipment 128 control panels, conductors Tires for buses and lorries, 40 Rubber and articles thereof 82 articles of vulcanised rubber 49 Printed books, newspapers, pictures etc 36 Postage stamps 21 Miscellaneous edible preparations 31 Food preparations 95 Toys, games, sports requisites 28 Wheeled toys Ethylene sacks and bags, 39 Plastics and articles thereof 26 clothing accessories (gloves etc.) An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 9.7 TWO DIGIT HS CODES WITH HIGH TRADE POTENTIAL AND HIGH POTENTIAL CAGR VALUES The following table lists 2 digit HS codes with high trade potential and favourable CAGR metrics, usually within several items at the 6-digit level. Many HS codes from the previous table show up here as well, with more than 50% of the potential within coffee, tea etc., electrical, electronic equipment, rubber, printed books etc, toys, miscellaneous edible preparations and plastics also showing favourable CAGR values. These HS codes therefore represent prime opportunities for boosting Sri Lankan exports to Pakistan since they experienced positive growth in terms of Sri Lankan exports as well as in terms of Pakistani imports over the period 2004-2013.There is considerable overlap between this and the previous table, indicating that high trade potential items frequently exhibit favourable CAGR metrics. Table 30. Two digit HS codes with Sri Lankan exports items to Pakistan with high CAGR items Figures in USD Millions HS CODES WITH HIGH TRADE POTENTIAL AND HIGH CAGR VALUES 62 Total Trade Potential in Number of items at 6 digit HS Code Product Label High CAGR Items in USD HS code millions 09 Coffee, tea, mate and spices 316 2 85 Electrical, electronic equipment 75 13 40 Rubber and articles thereof 40 6 21 Miscellaneous edible preparations 31 2 49 Printed books, newspapers, pictures etc 33 3 95 Toys, games, sports requisites 27 3 84 Machinery, nuclear reactors, boilers, etc 15 10 Tobacco and manufactured tobacco 24 13 2 substitutes 78 Lead and articles thereof 12 1 39 Plastics and articles thereof 18 9 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement This table indicates that a total of 47 items at the 6-digit HS code have a trade potential of over USD 570 million as Sri Lankan exports to Pakistan. Only HS09 faces any kind of notable import restriction since a TRQ is in effect on tea imports, whereas the other HS codes enjoy full concession in the relevant items with the exception of Plastics and offer trade potential worth about USD 254 million. For instance, thirteen 6-digit HS code electronic items alone represent a total USD 75 million trade potential with favourable CAGR values and full concession. Moreover, HS 40 Rubber faces tariffs on only one of the 6 high CAGR items considered. 9.8 ITEMS ON PAKISTAN’S NO-CONCESSION LIST WITH SRI LANKA RCA ADVANTAGE While the preceding analysis suggests that tariffs are not the primary roadblock in the way of more Sri Lankan exports finding their way into Pakistan, a closer look at Pakistan’s no- concession list reveals a number of items in which Sri Lanka possesses a revealed comparative advantage over Pakistan. Out of a total of 482 items for which data was available 174 items exhibited an RCA advantage in Sri Lanka’s favour. The following table shows a selection of these items. 9.4 18.8 Adv. 13.16 16.92 15.04 13.16 39.48 33.84 26.32 22.56 20.68 41.36 63.92 10.152 18.048 44.368 53.768 SL RCA 0 0 0 0 0 0 0 0 0 0 0 3.76 15.04 3.008 4.512 0.752 0.752 Pak RCA Pak 63 18.8 24.44 13.16 13.16 16.92 15.04 13.16 33.84 26.32 22.56 20.68 22.56 41.36 43.24 45.12 63.92 54.52 Figures in USD Millions SL RCA 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2013 2004- Growth 0.02 0.00 0.35 0.10 0.01 0.12 0.24 0.41 0.12 4.63 0.03 0.01 0.03 0.23 0.15 0.04 0.42 Trade Trade Potential 9 5 5 25 52 25 25 10 25 15 25 15 SL 6.3 6.3 6.3 23.8 25.6 Tariff on Tariff 0.02 0.78 0.24 4.97 0.24 0.41 0.12 5.11 0.10 0.09 9.52 0.23 5.73 6.30 1.04 48.19 World World 206.74 Imports Pak Pak 2013 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement SL 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 to Pak in 2013 Exports SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label RCA adv. over Pakistan over Pakistan RCA adv. slips and petticoats, of other textile Womens/girls materials, knitted Inner tubes of rubber nes Paper, filter, in rolls or sheets, uncoated filter, Paper, Automobiles w reciprocatg piston engine displacg not more than 1000 cc of polyester filaments, single, >50 turns per metre, Yarn not put up of polyester staple fibres, single, not put up Yarn,>/=85% of garments/of clothg accessories,of textile Parts materials,knittd textile Corsets,braces & similar articles parts thereof,of materials of garments or clothg accessories nes,of tex Parts mat,not knittd Green tea (not fermented) in packages exceeding 3 kg bow ties and cravats, of other textile materials, not Ties, knitted fabrics, containing>/=85% of polyester staple Woven fibres, unbl or bl kernel/babassu oil their fract,refind but not Palm chemically modified unmanufactured, not stemmed or stripped Tobacco, Milk and cream powder unsweetened exceeding 1.5% fat of polyester staple fibres, multiple, not put Yarn,>/=85% up, nes fab of polyester staple fib mixd w viscose rayon Woven staple fib,nes 610819 401390 480540 870321 540252 550921 611790 621290 621790 090220 621590 551211 151329 240110 040221 550922 551511 HS Code Table Table 31.Sri Lankan export items on no concession list with an Table Table Section 4 Section Concerns and Concerns Recommendations An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 10.0 GENERAL CONCERNS Table 31. Major concerns about the FTA between Pakistan and Sri Lanka MAIN CONCERNS VOICED ABOUT PAK-SRI LANKA FTA 1. Sri Lanka perceived as small market by businessmen 2. Few links between Pak-Sri Lanka business communities 3. Unilateral changes that oppose the spirit of the FTA 4. Insufficient involvement of business community in drafting of FTA Lack of awareness about FTA terms and potential of Sri Lankan 5. market 6. Lack of reliable forums for the arbitration of trade disputes 10.1 LACK OF INTEREST IN PAK-SRI LANKA TRADE 65 Certain exporters within high potential export sectors did not view Sri Lanka as having significant potential as a prospective trading partner. They substantiated this outlook by making reference to Sri Lanka’s small size which in their minds translated to a significantly smaller market for Pakistani goods than countries such as Malaysia and Indonesia. They argued that establishing a foothold in a new market involved taking risks that the relatively low potential benefits of trade with Sri Lanka could not justify. Exporters also claimed that there was a lack of awareness of the Pak- Sri Lanka FTA in the business community. They argued that it was incumbent on the government to work to raise awareness and apprise businessmen of opportunities existing in underdeveloped markets such as Sri Lanka, and this could be done through trade delegations and exhibitions. A key concern expressed by several quarters was the need for increased interaction between the business communities of Pakistan and Sri Lanka. Such a back-and-forth is thought to be vital to the advancement of trade. Businessmen and bureaucrats interviewed were of the mind that opportunities for growth require strong links between the countries’ business communities and trade bodies in order to be realized. An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 10.2 UNILATERAL CHANGES MADE TO FTA TERMS There were also concerns about unilateral changes made by both countries that are in opposition to the spirit of the FTA. For instance, in April 2014 broomcorn, a significant Sri Lankan export to Pakistan, was placed on the no concession list through Statutory Regulatory Order 280 (SRO 280), despite the fact that it previously faced no restrictions as per the terms of the FTA. This and other unilateral changes were later reversed by SRO 854. On the Sri Lankan side, in 2011 a special commodity levy was imposed on certain fruits and vegetables, such as oranges, onions and potatoes, despite the fact that, with the exception of potatoes which were under a TRQ, none of the items appeared on Sri Lanka’s no concession list. This levy replaced a cess that was previously required of Sri Lankan importers, and led to the cancellation of orders made to Pakistani exporters because of the hike in prices. Similarly, steel pipes, which are a significant Pakistani export- 50% of the Sri Lankan galvanized pipe market was supplied by Pakistani producers in 2013-now face a cess. The imposition of a cess has pushed prices up by 26.5%, and the Pakistani share of the pre-galvanized tube market has shrunk from 60% in 2011 to 40% in 2013. The cess falls under the category of para-tariff, the imposition of which as per the FTA requires mutual consent of both countries. These changes, like others made by both sides, seem to have been made without consultation with the FTA partner and have therefore been particularly disruptive. 10.3 INSUFFICIENT INVOLVEMENT OF BUSINESSMEN IN DRAFTING OF FTA Several exporters raised concerns about insufficient consultation with the business community during the drafting of trade agreements. This was an issue that was seen to apply across the board and to the Pak-Sri Lanka FTA in particular as well. The contention of the businessmen interviewed was that close attention was needed to ensure that the FTA terms were appreciative of the complex ins-and-outs of their businesses, since otherwise the FTAs may become counterproductive. For instance, one businessman raised concerns about the fact that concessions granted on key raw materials to a small country like Sri Lanka with relatively low production capacity created a difficult situation for the relevant businesses at home. The concern therefore was that since each sector has its own needs and challenges which are best known to stakeholders in those sectors, the government must involve the stakeholders to a greater degree during the drafting process of trade agreements. 10.4 LACK OF EFFECTIVE TRADE DISPUTE RESOLUTION 66 Another common concern was the arbitration of trade disputes. The current resources for arbitration were thought to be insufficient and trade disputes arose frequently due to misconduct by traders on both sides. The absence of efficient forums for arbitration was taken to be an additional disincentive to parties on both sides. Concerns were also raised about the potential for and difficulties involved in setting up Pakistani concerns in Sri Lanka. Several stakeholders involved in trade with Sri Lanka thought that investment in the country was a very attractive option, but cited difficulties faced in establishing a presence in the country. Most notable was Thatta Cement, a Pakistani company that suspended its project in Sri Lanka because the Sri Lanka Ports Authority did not execute its land lease agreement. Plans to establish Pakistani sugar mills in Sri Lanka also seem to have stalled. The general opinion of stakeholders was that effort was required on both ends to facilitate Pakistani investment into Sri Lanka since there was serious interest from several parties within Pakistan. 11.0 VIEWS OF SELECTED HIGH POTENTIAL PAKISTANI An Assessment of the Pakistan-Sri Lanka Free Trade Agreement EXPORTERS 11.1 PLASTICS A key issue voiced regarding the plastics sector was that the Sri Lanka market did not appear to be large enough to merit expanding their exports to the country. However, there was an admission that the Sri Lankan market remains unexplored due to the afore-mentioned lack of linkages between the two countries’ business communities. The high costs of transporting plastic were cited as an additional impediment given the smaller market, though stakeholders said that if freight concessions were offered by Sri Lanka they would provide sufficient incentive to increase exports to the country. It was also suggested that warehouses be allotted by Sri Lanka to house Pakistani plastic products so that buyers may view the items before purchase. There was uneasiness with the terms of the FTA that seemed to have to do as much with the substantive details of the agreement as it did with the perception that the formulation of FTAs does not sufficiently involve businessmen. 11.2 FRUITS AND VEGETABLES The export of fruits and vegetables faces several challenges to expansion vis-à-vis Sri Lanka. In 2012 the duty structure on certain vegetables such as onions was changed from custom duties to a special commodity levy that charged a fixed duty per kg. This had led to Pakistani exporters suddenly losing much of the benefit of the FTA concessions, and while the structure reverted to custom duty on certain key exports, exporters have encountered similar difficulties since then. There were complaints that duties were increased by Sri Lankan authorities without prior notice, leading to the disruption of transactions already underway. It was also pointed out that there was misconduct by traders from both countries and that greater attention was required by government bodies to curb such behaviour. It was claimed that instances wherein traders perpetrate fraud knowing that the resulting dispute may not be resolved at all are not uncommon. Therefore the need for arbitration bodies was also reiterated. 11.3 ARTICLES OF IRON AND STEEL (PIPES) As already mentioned, the export of steel pipes has faltered in the face of a cess charged by the Sri Lankan government. IIL pipes commands the highest market share of galvanized pipes in the Sri Lankan market and has made an official appeal to the Pakistani Ministry of Commerce, but no progress has been made on the issue so far. This issue requires urgent attention since it sets a troubling precedent for those doing business with Sri Lanka, given the fact that the export of a major product has been disrupted by this sudden change that is in opposition to the intentions of the FTA. Furthermore, there were attempts to establish a plant 67 for the production of steel pipes in Sri Lanka but these too stalled. 12.0 RECOMMENDATIONS The central impediment facing Pak-Sri Lanka trade relations seems to be a relatively low amount of interest by the wider business communities of both countries in trade with the other country, as well as a correspondingly modest investment by government bodies on either side in the development of trade. The relationships between the myriad challenges facing Pak-Sri Lanka trade are complex and interrelated, but the afore-mentioned lack of initiative seems to be the central problem. Related issues such as unilateral changes that conflict with FTA terms and a lack of arbitration bodies adversely impact existing trade and de-incentivise entry into trade, but the primary problem still seems to be the lack of serious intent to build strong ties to begin with. Moreover, the identification of concrete business opportunities and general potential for trade will mitigate the discouragement that results from ancillary problems such as the risk of unresolved trade disputes, since the potential gains will make doing trade worth it. A concerted effort to bring the business communities of either country into regular contact and enable the countries’ trade bodies to work in concert is therefore the likely antidote to the An Assessment of the Pakistan-Sri Lanka Free Trade Agreement fledgling Pak-Sri Lanka trade relationship. Moreover, an effort to this end will likely be well- served by Pakistan and Sri Lanka’s strong political ties. Table 32. Recommendations to improve Pakistan-Sri Lanka trade relations RECOMMENDATIONS Regular trade delegations and single country exhibitions to build ties 1. between business communities Increased involvement of stakeholders in drafting of FTA, item-by- 2. item discussion 3. Discussions before undertaking changes that conflict with FTA terms Reliable and expeditious mechanisms for the resolution of trade 4. disputes 12.1 TRADE DELEGATIONS AND SINGLE COUNTRY EXHIBITIONS This report has attempted to outline the significant potential for trade that exists between Pakistan and Sri Lanka. Efforts must be made to further explore opportunities for expanding trade between the two countries and give businessmen reasons to focus on Sri Lanka as a trading partner. Trade bodies and business promotion forums must play a central role in raising awareness about the scope of these opportunities. It was suggested by several businessmen and bureaucrats that Sri Lanka, despite its small size, possesses great potential as a trading partner and investment destination for Pakistan. This report suggests that much potential arises from both countries being healthy markets for the other’s products. In addition to this, Sri Lanka is currently in the process of rapid development and rebuilding following the conclusion of long-lasting political strife, and Pakistan can play a role in this growth. Sri Lanka has an FTA with India and will soon sign another with China, and therefore investment in Sri Lanka will allow Pakistani companies restriction-free access to these huge markets. With reference to the concern noted in the previous section, it should be kept in mind that while countries such as Malaysia and Indonesia do record greater world imports than Sri Lanka, Pakistan’s exports to Sri Lanka happen to be disproportionately high- in 2013 Pakistan’s exports to Malaysia and Indonesia were around USD 200 million and USD 144 million respectively, whereas exports to Sri Lanka were USD 316 million. In other words, Pakistan is currently a more significant trading partner for Sri Lanka than it is for either Malaysia or Indonesia. Concerns about the lack of a back-and-forth between the two countries’ business communities 68 are well-founded and need to be addressed. To this end several businessmen emphasized the need for comprehensive single country exhibitions and regular trade delegations. Single country exhibitions should not be tokenistic and should involve the presence of major producers of relevant export items. Similarly, trade delegations must be composed of key businessmen who have been apprised of the kinds of opportunities available in the other country’s market. It was suggested that more could be done to facilitate Sri Lankan delegations to Pakistan by trade bodies, with particular attention paid to local security concerns that may discourage such visits. Without unhindered communication between Pakistan and Sri Lanka’s business communities trade will continue to stall, since while opportunities exist on paper, a channel for the exchange of ideas and proposals must be developed in order to translate said opportunities into trade figures.As already stated, this appears to be the primary hurdle to better Pak-Sri Lanka relations, since the FTA terms themselves are comprehensive and favourable and the problems that do arise during trade are surmountable. Delegations and single-country exhibitions will also help to raise awareness regarding the FTA in both countries. 12.2 INCREASED INVOLVEMENT OF STAKEHOLDERS IN An Assessment of the Pakistan-Sri Lanka Free Trade Agreement FORMULATION OF FTA TERMS Producers and exporters felt that the Pak-Sri Lanka FTA, much like other FTAs signed by Pakistan, did not sufficiently take into account their views and expertise during the drafting phase and suffered for it. However, it should be noted that most of their substantive criticism was directed not towards the terms of the FTA, but rather ancillary issues such as the need for more regular delegations and arbitration forums. Even so, increased participation of stakeholders during the drafting phase of future FTAs will serve to make FTAs more sensitive to Pakistan’s interests while also creating a more inclusive exchange between policy makers and businessmen. While the terms of the Pak-Sri Lanka FTA seems to be by and large in the interests of both sides, businessmen may still take issue on certain points that they feel they were unable to present a case for, and to avoid this a more inclusive drafting process may be in order. 12.3 DISCUSSION BEFORE CHANGES TO FTA TERMS Both countries must work to make sure any changes made in tariff policy or any other FTA terms follow only after an agreement between Pakistan and Sri Lanka is reached. Sudden unilateral changes to tariff rates or regulations that conflict with the spirit of the FTA act as a disincentive to businessmen who are already reluctant to step into an underdeveloped market. Both governments must acknowledge the importance of the FTA and assure businessmen that the terms will be adhered to.Furthermore, once there are strong ties between the two countries’ business communities, stability vis-à-vis the terms of FTA will likely follow as Pak- Sri Lanka trade becomes more and more important. 12.4 FORUMS FOR EFFICIENT RESOLUTION OF TRADE DISPUTES Efficient forums for the arbitration of trade disputes are sorely needed, as reflected by the reiteration of this issue throughout our survey of businessmen. Pakistan-Sri Lanka trade relations can be categorized as still being nascent, and businessmen require further incentives to step into the market. If there are too many instances of unresolved trade disputes many businessmen will simply choose to concentrate elsewhere. 69 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Annexures An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Annexure A: List of most exportable product lines Table 1 lists the 275 Pakistani export items to Sri Lanka at the 6 digit HS code with a trade potential greater than or equal to USD 1 million. Items with favourable CAGR metrics are highlighted in blue. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7.4 1.3 -0.1 Adv. Pak Tariff Tariff Pak 0 0 0 0 0 0 0 0 0 0 0 0 0 30 75 1.3 14.9 13.4 Tariff India Pak Pak 9.1% 7.9% 6.7% 7.0% 8.3% 5.0% -1.2% 37.6% 48.0% 27.6% 17.9% 12.5% 28.1% 51.3% 41.0% 41.9% 23.8% CAGR Export -15.8% Figures in USD Millions 71 SL 9.5% 9.2% 7.1% 5.6% 7.2% 3.1% 0.9% 5.1% 9.3% 27.8% 14.2% 21.2% 13.6% 12.2% 21.6% 14.4% 25.7% 23.1% CAGR Import _ 0.0% 0.0% 1.3% 8.7% 2.9% 9.3% 0.0% 0.0% 12.4% 43.5% 25.2% 73.8% 63.4% 20.3% CAGR -17.3% -14.6% Pak-SL Pak-SL -243.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 75 7.5 13.5 Pak tariff Pak 64.07 46.56 44.38 34.66 34.60 27.61 17.89 17.46 16.01 15.34 15.32 15.23 14.30 14.14 13.11 13.05 Trade Trade 267.84 222.85 Potential 50.11 38.00 33.95 36.16 17.47 20.32 16.48 14.54 51.54 13.11 53.68 World World 279.61 506.66 487.78 106.25 296.81 653.12 495.94 Export Pak 2013 Pak 73.48 46.56 44.38 34.90 46.26 28.37 17.98 28.56 16.04 38.80 15.32 38.93 15.75 56.20 13.20 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement World World 312.28 257.24 127.04 Import SL 2013 9.41 0.00 0.00 0.23 3.40 0.76 0.08 0.01 0.03 0.00 1.25 0.24 1.61 0.00 0.15 44.44 34.39 23.46 Export Pak 2013 Pak SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label RCA adv. over Pakistan Medicaments nes, in dosage Portland cement nes Portland in solid form, nes Refined sugar, Structures&parts of structures,i/s (ex prefab bldgs of headg no.9406) for cellular networks mobile Telephones telephones or for other wirele Instruments and appliances used in medical or veterinary sciences, nes fabrics of cotton,>/=85%, not more Woven than 200 g/m2, dyed, nes Wheeled tractors nes Fans: table,roof etc w a self-cont elec mtr of an table,roof etc w a self-cont Fans: output nt excdg 125W Food preparations nes Food Mens/boys trousers and shorts, of cotton, not knitted Denim fabrics of cotton,>/=85%, more than 200 g/m2 Lead-acid electric accumulators of a kind usd f startg piston engines fabrics of cotton,>/=85%, more than Woven 200 g/m2, dyed, nes fabrics of cotton,>/=85%, not more Woven than 200 g/m2,printed, nes Denim fabrics of cotton, <85% mixed with m-m fib, more than 200 g/m2 Tobacco, unmanufactured, not stemmed or Tobacco, stripped Polystyrene nes Polystyrene 300490 252329 170199 730890 851712 901890 520839 870190 841451 210690 620342 520942 850710 520939 520859 521142 240110 390319 HS Code Table Table 31.Sri Lankan export items on no concession list with an Table Table 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Adv. -14.2 Pak Tariff Tariff Pak 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 17 14 20 7.2 Tariff India Pak Pak 6.5% 0.4% 2.5% -8.1% -4.3% -0.6% -1.9% 11.7% 11.7% 70.1% 21.5% 57.1% 73.3% 32.7% 58.7% 50.5% 28.9% 36.5% CAGR Export 120.8% 161.2% SL 1.6% 5.4% 1.3% 0.0% -8.9% -9.0% 22.2% 22.2% 27.0% 13.4% 24.4% 23.2% 15.2% 11.1% 15.9% 17.5% 21.4% 16.5% 25.3% CAGR Import 765.0% 72 _ _* 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -2.4% -3.8% -9.7% 18.2% 36.0% 36.0% 24.1% 13.2% 22.3% 12.5% CAGR -17.7% -54.4% Pak-SL Pak-SL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 14 20 7.2 31.2 Pak tariff Pak 9.64 9.43 9.12 9.06 8.76 8.62 8.61 8.59 8.43 8.05 13.01 12.00 12.00 11.84 11.46 11.30 11.15 10.78 10.71 10.09 Trade Trade Potential 9.43 8.80 6.36 8.59 63.31 11.46 23.27 10.78 10.92 16.98 14.98 10.71 50.26 13.16 World World 155.45 204.55 204.55 141.70 115.33 400.80 Export Pak 2013 Pak 9.75 9.06 8.66 9.21 8.18 13.56 13.25 13.25 11.84 21.23 11.86 13.28 13.56 11.24 10.15 12.19 20.62 22.71 49.09 10.41 World World Import SL 2013 0.55 1.25 0.00 0.00 0.00 0.57 2.14 0.00 0.21 0.11 0.06 0.00 1.59 0.00 0.04 0.04 0.00 0.00 0.78 0.13 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Export Pak 2013 Pak SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label Cotton yarn,>/=85%,single,uncom bd,>/=714.29 dtex, nt put up Polyethylene terephthalate Polyethylene Polyethylene terephthalate Polyethylene trousers & shorts,of other textile Womens/girls materials,not knitted Air conditioning machines window or wall types, self-contained fabrics of cotton,>/=85%, nt more than Woven 200 g/m2, bleached, nes Cotton yarn,>/=85%,single,combed, 714.29 >dtex>/=232.56, not put up Refrigerators, household type, compression- type Motor vehicle parts nes of fish,crust,mol/oth aqua Flour,meal&pellet invert,unfit human cons Gypsum; anhydrite Paints & varni based on polymers dissolv in a Paints non aqueous solv nes fabrics of cotton,>/=85%, more than Woven 200 g/m2, bleached, nes Marble & travertine,merely cut,by sawing or otherwise into blocks etc Animal feed preparations nes Mens/boys trousers and shorts, of other textile materials, not knitted Fruits of the genus Capsicum or Fruits Pimenta : Dried, neither crushed nor ground Footwear, nes Footwear, Antibiotics nes, in dosage Articles of jewellry&pt therof of/o prec met w/n platd/clad w prec met 520511 390760 390760 620469 841510 520829 520522 841821 870899 230120 252010 320890 520929 251512 230990 620349 090420 640590 300420 711319 HS Code 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 37.8 37.8 0 0 0 0 0 0 0 0 0 0 0 30 15 30 15 37.8 21.7 37.8 21.7 29.4 -7.2% -7.2% 36.5% 42.2% 48.9% 12.6% 35.3% 11.1% 62.5% 39.9% 36.5% 42.2% 12.6% 48.9% 35.3% 11.1% 62.5% 39.9% 11.6% 130.3% 5.2% 7.0% 3.4% 5.7% 5.2% 7.0% 3.4% 5.7% -8.2% -4.6% -8.2% -4.6% 25.3% 13.6% 13.1% 25.3% 13.6% 13.1% 22.0% -12.7% 73 _* _* 0.0% 0.0% 0.0% 0.0% 7.9% 69.7% 28.7% 38.6% 53.4% 69.7% 28.7% 38.6% 53.4% 65.6% -25.0% -42.3% -25.0% -42.3% 0 0 0 0 0 0 0 0 0 0 0 0 0 30 15 30 15 21.7 21.7 29.4 8.05 7.86 7.69 7.73 7.65 7.48 7.42 7.19 7.18 8.05 7.86 7.73 7.69 7.65 7.48 7.42 7.19 7.18 7.16 7.14 8.23 7.98 7.65 7.67 7.44 7.18 8.23 7.98 7.65 7.67 7.44 7.18 7.28 18.40 18.40 400.80 150.55 400.80 150.55 1,790.21 8.18 9.66 7.73 7.19 8.18 9.66 7.73 7.19 7.16 10.98 12.63 17.85 31.88 10.98 12.63 17.85 31.88 17.53 246.77 246.77 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.13 0.37 0.29 0.00 0.00 0.19 0.02 0.00 0.00 0.13 0.37 0.00 0.29 0.00 0.19 0.02 0.00 0.00 0.00 10.39 Articles of jewellry&pt therof of/o prec met w/n platd/clad w prec met fabrics of cotton,>/=85%, more than Woven 200 g/m2, printed, nes Float glass etc in sheets, non-wired nes fats &oils&fractions hydrogenatd,inter/re- Veg esterifid,etc,ref'd/not Milk and cream powder unsweetened exceeding 1.5% fat Labels, badges and similar woven articles of textile materials Flat rolled prod,i/nas,plated or coated with zinc,>/=600mm wide, nes Sacks and bags (including cones) of polymers of ethylene Articles of plastics or other materials Nos 39.01 to 39.14 nes Articles of jewellry&pt therof of/o prec met w/n platd/clad w prec met fabrics of cotton,>/=85%, more than Woven 200 g/m2, printed, nes fats &oils&fractions hydrogenatd,inter/re- Veg esterifid,etc,ref'd/not Float glass etc in sheets, non-wired nes Milk and cream powder unsweetened exceeding 1.5% fat Labels, badges and similar woven articles of textile materials Flat rolled prod,i/nas,plated or coated with zinc,>/=600mm wide, nes Sacks and bags (including cones) of polymers of ethylene Articles of plastics or other materials Nos 39.01 to 39.14 nes Disodium carbonate Rice, semi-milled or wholly milled, whether not polished or glazed 711319 520959 700529 151620 040221 580710 721049 392321 392690 711319 520959 151620 700529 040221 580710 721049 392321 392690 283620 100630 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 -1.1 Adv. Pak Tariff Tariff Pak 0 0 0 0 0 0 0 0 0 0 0 0 15 30 10 30 21.4 Tariff India 219.6 Pak Pak 6.1% 8.5% 10.7% 19.1% 49.9% 31.0% 14.4% 42.7% 65.8% 87.3% 23.0% 21.4% 22.4% 26.6% 25.3% CAGR -14.3% Export -13.8% 118.6% SL 5.9% 3.5% 7.7% 2.3% 9.6% -7.5% -6.7% -4.7% -4.9% 12.2% 38.5% 14.5% 15.6% 18.2% 14.8% 22.8% 18.8% CAGR -19.2% Import 74 _ _* 1.5% 9.4% 0.0% 0.0% 0.0% 0.0% 9.2% 0.0% -5.1% 72.8% 24.5% 10.2% 20.7% 10.2% CAGR -20.3% -15.9% Pak-SL Pak-SL 0 0 0 0 0 0 0 0 0 0 0 0 0 15 10 30 22.5 219.6 Pak tariff Pak 7.05 7.04 6.80 6.79 6.50 6.36 6.33 6.30 6.09 5.97 5.91 5.75 5.71 5.68 5.68 5.61 5.59 5.52 Trade Trade Potential 7.12 7.48 6.64 6.33 7.21 6.09 5.80 5.71 5.71 5.70 5.61 48.50 10.69 19.14 17.97 13.49 World World 274.07 Export 1,436.43 Pak 2013 Pak 8.18 7.63 6.50 6.36 6.55 8.74 6.70 6.92 6.46 8.96 6.29 5.61 39.98 21.98 21.69 20.57 19.20 18.43 World World Import SL 2013 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.07 1.14 0.69 0.84 0.00 0.00 0.00 0.14 0.00 2.76 0.80 0.05 0.00 0.02 0.02 0.00 0.71 0.09 Export Pak 2013 Pak SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label Cotton yarn,>/=85%, single, combed,>/=714.29, not put up Cotton yarn,>/=85%,single,uncombed,714.29 >dtex>/=232.56, not put up Film and sheet etc, non-cellular of polymers of propylene Cotton yarn,>/=85%, single, combed, 232.56 >dtex>/=192.31, not put up Ceramic sinks, wash basins etc & similar sanitary fixtures nes Black tea (fermented) & partly fermented in packages exceedg 3 kg Woven fab of high tenacity fi yarns nylon oth Woven polyamides/polyesters Chemical/allied industry preparations/prods nes Parts of telephone sets, telephones for cellular Parts networks or for other Undenaturd ethyl alcohol of an strgth by vol of 80% vol/higher Plain weave cotton fabric,>/=85%,>100g/m= to 200g/m=, dyed Insecticides Peas dried, shelled, whether or not skinned Peas or split fabrics of cotton,<85% mixd with m-m Woven fib,<=200 g/m2,dyed,nes Beauty or make-up preparations nes; sunscreen or sun tan preparations Perfumes and toilet waters Perfumes Plants &pts of plants(incl sed&fruit) usd in etc nes pharm,perf,insect fab of cotton,<85% mixd with m-m Woven fib,<=200 g/m2,unbl,nes 520521 520512 392020 520523 691090 090240 540710 382490 851770 220710 520832 380891 071310 521039 330499 330300 121190 521019 HS Code 0 0 0 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15 10 0 0 0 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15 27 22.5 28.1 _ 4.7% 8.1% 2.9% 55.1% 82.4% 27.6% 23.9% 53.0% 80.2% 53.2% 21.1% 17.0% 29.6% 12.4% 73.0% 34.1% 37.9% 14.0% 38.8% -10.1% -10.1% _ 9.8% 6.0% 9.5% 8.7% 3.2% -1.9% 60.0% 60.0% 12.3% 11.9% 17.5% 19.7% 17.1% 28.1% 23.1% 16.1% 11.5% 13.0% 19.1% 18.8% -10.8% 75 _ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -7.4% 67.0% 20.1% 25.9% 62.6% 109.8% *-2.75% *80.58% *25.74% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 27 22.5 18.1 5.45 5.43 5.43 5.36 4.87 4.82 4.68 4.60 4.59 4.56 4.48 4.48 4.35 4.43 4.35 4.32 4.28 4.26 4.23 4.22 4.20 4.17 5.43 5.43 5.36 4.82 4.60 4.59 4.56 4.48 4.36 7.07 4.35 4.28 4.44 4.23 4.25 15.41 12.15 38.55 54.58 18.17 214.52 187.43 5.45 7.14 7.14 7.17 4.68 7.08 5.95 4.48 7.12 4.43 4.39 4.26 6.71 4.20 11.24 14.42 11.81 28.04 22.90 26.50 29.38 111.82 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.00 0.00 0.00 0.00 2.30 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.07 0.00 0.00 0.00 0.03 0.00 25.20 polyester of containing>/=85% fabrics, Polyesters nes, in primary forms Polyesters Parts of boring or sinking machinery, whether of boring or sinking machinery, Parts or not self-propelled Parts of boring or sinking machinery, whether of boring or sinking machinery, Parts or not self-propelled f infant use,put Prep of cereals,flour,starch/milk up f retail sale weave cotton fabric,>/=85%, more than Twill 200 g/m2, unbleached Motorcycles with reciprocatg piston engine displacg > 50 cc to 250 Maize (corn) starch Special purpose motor vehicles nes Raw cane sugar, (see subheading note 2.) Raw cane sugar, Medium density fibreboard MDF of wood, a thickness > 9 mm Paper and paperboard, surface-coloured, Paper surface-decorated or printed, Electric generating sets Vegetable products nes Vegetable Razors including safety razors and open blade type Articles, iron or steel, nes Plain weave polyester staple fib fab,<85%,mixd w/cotton,<=170g/m2,dyd Finishg agents,dye carriers&oth prep,nes,for use in the textile indust AC motors, single-phase, nes Woven staple fibres, unbl or bl Electric conductors, for a voltage not nes exceeding 80 V, Yarn of polyester staple fibres mixed with Yarn cotton, not put up, nes weave cotton fabrics,>/=85%, more than Twill 200 g/m2, dyed 390799 843143 843143 190110 520912 871120 110812 870590 170113 441114 481159 850239 140490 821210 732690 551321 380991 850140 551211 854449 550953 520932 _ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5 0 0 Adv. Pak Tariff Tariff Pak _ 0 0 0 0 0 0 0 0 0 0 0 0 0 5 0 0 30 15 Tariff India _ _ Pak Pak 3.7% 2.8% -6.7% -6.2% 10.0% 39.0% 61.7% 56.6% 18.5% 56.0% 31.7% 32.7% 52.5% CAGR -12.9% Export -15.8% -20.7% -13.9% _ _ SL 2.2% 4.2% 6.7% 1.7% 4.8% 3.6% 9.5% 13.7% 11.4% 19.4% 11.6% 11.9% 11.3% 24.1% 37.0% CAGR -11.3% Import 149.7% 76 _ _ _ _ _* 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -1.5% 10.2% CAGR -15.0% -20.5% -20.6% Pak-SL Pak-SL *-12.85% _ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 15 Pak tariff Pak 4.14 4.10 4.07 4.00 3.97 3.86 3.84 3.82 3.78 3.77 3.77 3.76 3.74 3.72 3.67 3.66 3.51 3.51 3.49 Trade Trade Potential 4.14 6.34 4.00 4.14 7.58 3.82 5.09 3.87 6.59 4.27 5.96 4.03 3.66 3.51 3.98 64.86 13.00 25.01 23.59 World World Export Pak 2013 Pak 4.10 4.07 9.54 3.97 3.86 3.84 8.45 4.03 5.06 3.78 3.78 3.72 3.74 8.29 8.74 3.51 3.50 36.15 World World 243.13 Import SL 2013 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.25 0.10 0.02 0.51 0.03 0.00 0.08 0.00 0.00 0.00 0.00 Export Pak 2013 Pak SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label Polyvinyl chloride, not mixed with any other Polyvinyl substances Gelatin and gelatin derivs; isinglass; glues of animal origin, nes T-shirts,singlets and other vests,of textile T-shirts,singlets materials,knitted Lead refined unwrought Furniture, wooden, nes Furniture, Instruments&apparatus for measurg o check variables of liq o gases,nes Parts of vacuum pumps, compressors, fans, Parts blowers, hoods or dyeg machines (o/t Washing,bleachg machines of headg No 84.50) Articles for the conveyance or packing of goods nes, of plastics fabrics,>/=85% of nylon/other Woven polyamides filaments, dyed, nes fish, n.e.s. Frozen Fabrics, knitted or crocheted, of a width > Fabrics, 30 cm (excl. of artific Cotton yarn,>/=85%, single, combed, 192.31 >dtex>/=125, not put up Live Cattle : Pure-bred breeding animals of pumps for liquid whether or not fitted Parts with a measurg device Cargo vessels nes&oth for the transport of both persons&goods Tubes, pipes and hoses, rigid; of polyethylene Tubes, blouses and shirts, of cotton, Womens/girls not knitted Glucose&glucose syrup nt cntg fruct/cntg in dry state <20% by wt fruct 390410 350300 610990 780110 940360 902680 841490 845140 392390 540742 030389 600690 520524 010221 841391 890190 391721 620630 170230 HS Code 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 17 0 0 0 0 0 0 0 9 0 0 0 0 0 0 0 0 0 0 30 17 30 5.4 41.2 _* 4.5% -6.2% -4.9% 64.3% 40.7% 83.4% 14.8% 19.1% 19.4% 64.6% 77.9% 53.3% 24.4% 48.8% 41.0% 21.6% 44.9% 48.8% 42.0% 12.7% -19.6% 113.1% _* 7.6% 9.7% 5.1% 0.1% 9.7% 3.0% 6.3% 3.2% 2.3% 2.4% 72.4% 17.7% 29.0% 25.5% 12.7% 54.3% 23.2% 30.7% 17.6% 10.4% 30.4% 15.8% 77 _ _ _ _* 0.0% 0.0% 0.0% 0.0% 3.7% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 91.1% 49.5% -26.9% -11.3% -29.8% -15.1% 741.3% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 30 30 5.4 41.2 3.49 3.48 3.39 3.38 3.37 3.36 3.35 3.32 3.24 3.23 3.22 3.21 3.18 3.16 3.13 3.05 3.02 2.90 2.90 2.79 2.71 2.71 2.69 3.49 3.48 4.61 8.49 3.36 3.60 3.24 3.23 3.22 3.18 8.88 4.82 3.05 3.07 7.24 2.79 2.71 9.44 4.06 15.28 15.51 212.42 484.36 4.04 4.76 3.49 3.38 3.37 3.35 3.42 4.35 3.26 5.94 3.24 3.13 5.37 3.25 2.91 5.19 4.55 2.71 2.69 10.11 42.27 28.51 666.57 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.00 0.00 0.10 0.00 0.00 0.00 0.00 0.10 0.00 0.01 0.04 0.01 0.00 0.08 0.00 0.00 0.05 0.35 0.01 0.00 0.00 0.00 0.00 Silica sands and quartz Table,kitchen or other household art&parts Table,kitchen steel,nes thereof,stainless Clothing accessories nes, of textile materials, not knitted Rail or tramway construction material of iron steel, nes Mens/boys shirts, of cotton, not knitted Containers for compressed or liquefied gas of iron or steel Dioctyl orthophthalates Gloves, mittens and mitts, nes, of other textile materials, knitted Palm oil and its fractions refined but not Palm chemically modified Carboys, bottles, flasks, jars, pots, phials and other containers, of T-shirts, singlets and other vests, of cotton, T-shirts, knitted Maize (corn) seed Light petroleum oils and preparations weave cotton fab,<85% mixd w m-m Twill fib,not more than 200 g/m2,dyd Polystyrene, expansible Polystyrene, Milk powder not exceeding 1.5% fat Yarn of artificial staple fibres, not put up, nes Yarn Film and sheet etc, non-cellular of polyethylene terephthalates trousers and shorts, of cotton, Womens/girls not knitted Oranges, fresh or dried fabrics,containing>/=85% of acrylic Woven staple fibres,o/t unbl or bl Surveyg,hydrographic,oceanographic,meteoro logic/geophysical inst nes Pneumatic tires new of rubber for motorcycles 250510 732393 621710 730290 620520 731100 291732 611699 151190 701090 610910 100510 271012 521032 390311 040210 551090 392062 620462 080510 551229 901580 401140 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 12 21 10.8 Adv. Pak Tariff Tariff Pak 0 0 0 0 0 0 0 0 0 0 0 0 0 12 15 27 14.2 10.8 Tariff India Pak Pak 7.9% 1.2% -2.0% -3.4% 32.8% 37.8% 25.1% 30.2% 35.8% 82.0% 25.1% 13.3% 14.6% 10.4% 92.2% 19.5% 13.8% CAGR Export -17.3% SL 9.5% 1.5% 2.7% 7.7% 9.9% 2.6% 9.8% 2.2% -4.2% 16.5% 18.0% 11.7% 13.6% 22.6% 42.6% 14.3% 12.2% CAGR -12.3% Import 78 _ _ _ _* 0.0% 0.0% 3.8% 0.0% 0.0% -1.6% 37.4% 12.0% 86.9% 51.8% 18.2% CAGR -33.1% -19.1% Pak-SL Pak-SL *-29.29% 0 0 0 0 0 0 0 0 0 6 0 0 0 0 0 0 15 14.2 Pak tariff Pak 2.68 2.66 2.64 2.64 2.61 2.59 2.58 2.53 2.51 2.46 2.41 2.41 2.40 2.35 2.36 2.35 2.34 2.29 Trade Trade Potential 2.68 3.77 3.58 2.64 5.12 2.61 2.58 2.58 3.60 6.22 2.70 2.35 51.49 85.72 53.48 29.12 World World 119.23 150.46 Export Pak 2013 Pak 9.82 2.66 2.64 2.61 4.63 2.60 2.59 6.24 2.60 4.07 2.45 2.40 5.56 2.35 2.34 36.99 15.73 10.27 World World Import SL 2013 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.06 0.07 0.14 1.66 0.04 0.00 3.21 0.00 0.00 0.05 13.37 Export Pak 2013 Pak SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label Acrylic polymers nes, in primary forms fabrics,>/=85% of textured polyester Woven filaments, dyed, nes blouses and shirts,of other Womens/girls textile materials,not knitted Malt extract&food prep of Ch 19 <50% cocoa&hd 0401 to 0404 < 10% cocoa Waste,paring&scrap (exc hard Waste,paring&scrap rubber)&powder/granules obtaind therefrom Mach f mixing/kneading/crushing/grindg etc nes havg individ function Dyed warp knit fabrics of synthetic fibres "incl. those made on galloo Mucilages & thickeners derived from locust beans & seeds or guar and accessories of bodies nes for motor Parts vehicles Apparatus for the transmission or reception of voice, images or other Gloves, mittens and mitts, nes, of cotton, knitted Dates, fresh or dried cordage, ropes and cables, of other Twine, materials Leather further prepared after tanning or crusting "incl. parchment-dr Plain weave cotton fabric,>/=85%, more than 200 g/m2, unbleached Household and toilet articles nes, of plastics Monofilaments >1 mm, profile shapes etc of plastics nes Books, brochures, leaflets and similar printed nes matter, 390690 540752 620690 190190 400400 847982 600532 130232 870829 851769 611692 080410 560790 411200 520911 392490 391690 490199 HS Code 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10.8 #VALUE! _ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 13.5 10.8 _ 0.3% -1.1% 90.1% 10.8% 17.1% 31.0% 74.7% 36.2% 28.3% 23.7% 35.1% 49.9% 13.6% -12.6% -25.7% -14.9% 163.9% 137.0% 100.8% _* 1.3% 4.7% 7.4% 9.8% -8.2% -6.1% -6.2% -3.1% -7.6% 24.4% 69.9% 12.7% 45.6% 22.0% 39.5% 22.8% 23.8% 12.7% -11.2% 79 _ _* _* _* _* _* 0.0% 8.2% 6.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 46.9% 44.8% -27.7% -30.7% -11.9% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 13.5 2.28 2.27 2.27 2.26 2.24 2.24 2.23 2.23 2.20 2.13 2.13 2.13 2.12 2.11 2.11 2.08 2.06 2.05 2.02 2.02 2.66 2.27 5.13 9.00 6.21 7.91 2.23 3.80 2.12 5.91 2.12 2.08 2.06 2.48 2.02 2.05 11.77 91.98 12.67 217.16 2.29 2.47 2.51 2.24 2.24 6.59 2.23 2.24 2.63 2.15 2.13 4.11 2.11 8.27 9.32 4.59 37.54 27.89 14.61 241.14 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.01 0.00 2.86 0.24 0.00 0.01 0.00 0.00 0.04 0.50 0.02 0.00 0.00 0.00 0.01 0.00 0.00 0.43 0.00 0.03 Tableware and kitchenware of plastics Tableware Yarn of synthetic filaments, multiple, nes, not Yarn put up Wheat and meslin (excl. seed for sowing, durum wheat) fabrics of cotton,<85% mixd with m-m Woven fib,<=200 g/m2, bl, nes Tansmissions for motor vehicles Tansmissions Cotton yarn,>/=85%,single,uncombed,192.31 >dtex>/=125, not put up nes, frozen, excluding heading No Tunas 03.04, livers and roes Tubes, pipes and hoses, rigid; of Tubes, polypropylene Hot roll steel, coil, pickled >600mm wide <3mm thick fabrics of cotton,>/=85%, not more Woven than 200 g/m2,unbleached, nes Cotton, not carded or combed garments nes, of other textile Womens/girls materials, not knitted Cartons, boxes and cases, of corrugated paper or paperboard Salmonidae, nes,frozen,excluding heading No 03.04, livers and roes weave cotton fabrics,>/=85%, not more Twill than 200 g/m2, dyed Reactive dyes and preparations based thereon Tools for masons, watchmakers, miners and Tools hand tools nes Unbleached or bleached cotton fabrics, knitted or crocheted, of a widt Mach f fil/clos/seal/etc.btle/can/box/ bag/ctnr nes,mach f aeratg bev Textile fabrics impregnated, ctd, cov, or fabrics impregnated, ctd, cov, Textile laminated with plastics, nes 392410 540269 100199 521029 870840 520514 030349 391722 720827 520819 520100 621149 481910 030329 520833 320416 820559 600621 842230 590390 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 Adv. Pak Tariff Tariff Pak 0 0 0 0 0 0 0 0 0 0 0 0 0 30 30 30 30 15 15 7.5 30.6 Tariff India _ Pak Pak 9.0% 3.2% 5.4% -1.8% 36.1% 93.7% 41.9% 79.3% 35.3% 31.0% 40.6% 31.7% 13.4% 37.0% 14.7% 54.2% 44.5% 22.0% CAGR -15.3% Export -36.4% SL 7.8% 8.5% 3.0% 9.3% 5.2% -0.9% -5.0% 12.4% 15.1% 19.5% 61.8% 27.3% 23.8% 15.6% 10.6% 36.3% 52.9% CAGR -11.2% -17.0% Import -34.1% 143.9% 80 _ _ _ _* 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -4.4% 92.0% 46.7% CAGR -18.4% -25.5% -30.2% Pak-SL Pak-SL 100.4% 131.4% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 30 30 15 15 7.5 30.6 Pak tariff Pak 2.00 1.98 1.97 1.97 1.94 1.92 1.91 1.91 1.89 1.89 1.86 1.86 1.85 1.84 1.84 1.83 1.81 1.81 1.80 1.78 1.78 Trade Trade Potential 1.98 2.31 2.80 1.94 1.91 1.89 1.89 1.86 1.86 1.85 1.84 1.84 1.83 1.85 6.05 4.14 54.10 14.38 11.20 10.51 World World 121.03 Export Pak 2013 Pak 3.57 3.73 2.03 1.98 7.01 2.32 1.91 3.74 2.51 3.12 9.82 3.22 2.29 1.81 1.81 2.11 1.79 1.78 11.36 10.76 21.18 World World Import SL 2013 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 1.56 0.00 0.06 0.01 0.00 0.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.31 0.00 0.00 Export Pak 2013 Pak SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label Plain weave cotton fabric,>/=85%, not more than 100 g/m2, dyed Hair preparations, nes Cartons,boxes and cases,folding,of non- corrugated paper or paperboard Plain weave cotton fabrics,>/=85%, more than 200 g/m2, printed Film and sheet etc, non-cellular of polymers ofethylene Cotton yarn,>/=85%,multi,uncombed,192.31 >dtex>/=125,nt put up, nes Optical fibre cables, made up of individually sheathed fibres Milk and cream powder sweetened exceeding 1.5% fat Inner tubes of rubber nes Generatg sets,diesel/semi-diesel engines,of an output not exced 75 KVA Soap nes Road tractors for semi-trailers (truck tractors) Synthetic organic pigments and preparations based thereon Pencils and crayons, with leads encased in a Pencils rigid sheath, nes Parts of gas turbines nes Parts Medical, surgical or laboratory sterilizers Waste and scrap, copper or alloy Waste Cold rolled iron/steel, coils >600mm x 1-3mm Dressings&similar articles,impreg or coatd packagd for md use,nes Articles of stone or of other mineral substances mineral of other or Articles of stone nes Dredgers 520831 330590 481920 520951 392010 520534 854470 040229 401390 850211 340120 870120 320417 960910 841199 841920 740400 720916 300590 681599 890510 HS Code 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7.5 -20.3 0 0 0 0 0 0 0 0 0 0 0 0 0 15 15 1.4 2.5 7.5 7.5 10.8 22.5 6.0% 1.4% -6.3% -0.3% -4.9% -1.0% 11.8% 63.0% 41.0% 22.0% 89.5% 12.5% 94.9% 13.9% 99.1% 62.6% 74.1% 10.1% 40.2% 66.9% 129.6% 3.1% 7.6% 4.1% 8.0% 1.5% 8.2% 2.8% 5.3% 2.1% -1.5% -7.4% -2.5% 11.2% 54.4% 17.0% 14.3% 24.3% 17.9% 26.9% 27.5% -14.3% 81 _ _ _ 0.0% 9.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -7.4% 11.8% 33.7% 32.4% 44.2% 32.4% 12.6% -14.3% 106.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15 15 2.5 7.5 21.7 10.8 22.5 1.77 1.77 1.76 1.72 1.72 1.72 1.70 1.70 1.69 1.69 1.65 1.63 1.62 1.62 1.61 1.59 1.58 1.57 1.53 1.53 1.52 1.77 1.77 4.38 1.72 6.01 1.70 1.70 1.69 4.09 1.96 1.62 1.62 1.59 1.77 9.21 2.62 1.53 10.31 37.91 22.06 158.95 4.67 2.10 2.17 1.74 2.61 9.39 1.69 1.65 1.63 2.11 2.16 1.65 1.58 1.79 1.91 1.57 2.38 14.94 17.23 16.22 14.27 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.00 0.00 0.34 0.45 0.00 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.04 0.00 0.00 0.21 0.38 0.04 0.00 Boards,panels,includg numerical control panels,for a voltage > 1,000 V Sacks and bags (including cones) of plastics nes Leather further prepared after tanning or crusting "incl. parchment-dr Terry towellg&similar woven terry fab of Terry cotton,o/t unbl&o/t nar fab Parts&accessories of automatic data processg Parts&accessories machines&units thereof Belts and bandoliers of leather or composition leather Ethylene-vinyl acetate copolymers Anionic surface-active agents Self-adhesive plates, sheets, film etc, of plastic Self-adhesive nes Surface-active prep, washing & cleaning prep put up for retail sale Wood articles nes Wood Safety razor blades, including blade blanks in strips briefs and panties, of other Womens/girls textile materials, knitted of the chest type, not exceeding 800 Freezers l capacity Leather "incl. parchment-dressed leather" of Leather "incl. parchment-dressed the whole hides and skins Printing ink, nes flasks/vacuum vessels complete w/ Vacuum cases;parts o/t glass inners Dressings and other articles having an adhesive layer Plain weave cotton fabric,>/=85%, not more than 100 g/m2, unbleached fab of polyester staple fib,<85%,mixd Woven w/cot,<=170 g/m2,dyd,nes Carboys, bottles, flasks and similar articles of plastics 853720 392329 411310 580219 847330 420330 390130 340211 391990 340220 442190 821220 610829 841830 410719 321519 961700 300510 520811 551323 392330 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 30 27.5 Adv. Pak Tariff Tariff Pak 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 30 30 30 27.5 Tariff India Pak Pak 0.6% 3.5% 3.1% -7.5% -4.3% -0.7% 37.0% 35.0% 11.6% 27.9% 97.9% 36.4% 59.1% 64.9% 76.9% 48.2% 38.1% 75.5% CAGR Export 224.9% 167.0% SL 9.3% 9.7% 4.9% 6.0% 5.4% -5.5% -0.4% 36.5% 12.7% 59.9% 12.7% 39.0% 14.7% 15.2% 10.4% 17.6% 12.6% CAGR -21.2% -15.4% Import -11.6% 82 _ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -5.6% 95.7% 40.0% 39.1% CAGR -50.2% Pak-SL Pak-SL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 30 Pak tariff Pak 1.52 1.50 1.50 1.47 1.47 1.45 1.44 1.42 1.40 1.40 1.40 1.37 1.37 1.36 1.36 1.36 1.35 1.32 1.32 1.31 Trade Trade Potential 1.52 1.50 2.49 2.90 1.96 1.42 3.07 1.40 1.57 1.58 7.26 1.36 1.36 1.70 1.40 1.32 3.79 93.34 10.26 28.37 World World Export Pak 2013 Pak 5.10 1.50 3.16 1.47 1.45 1.44 1.77 1.40 1.40 3.68 4.53 1.36 8.56 1.35 2.15 1.31 13.25 12.64 12.92 37.96 World World Import SL 2013 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.00 0.00 0.00 1.69 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.20 0.21 0.00 0.00 0.00 0.00 0.08 0.00 0.00 Export Pak 2013 Pak SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label Cans, iron or steel, capacity <50 litres nes Rock drilling/earth boring tools, nes, parts garments nes, of man-made Womens/girls fibres, not knitted fabrics of cotton,>/=85%,more than Woven 200 g/m2, unbleached, nes Spices nes Drinking glasses (excl. of glass ceramics or of lead crystal a of balloons, dirigibles, and spacecraft Parts nes dresses, of other textile Womens/girls materials, not knitted Table, kitchen or other household articles and Table, and pot scourers scourin parts thereof, Black tea (fermented)&partly fermentd in packages not exceedg 3 kg Fittings, plastic Plates, sheets, film, foil and strip, of non- cellular polymers of viny Paper labels of all kinds, printed Paper Lead unwrought nes Instruments and apparatus for physical or chemical analysis, nes Generatg sets,diesel/semi-diesel engines,of an output exceedg 375 KVA Direct dyes and preparations based thereon Dyed fabrics, knitted or crocheted, of artificial fibres, of a width o Prep foods obtaind by the swellg o roastg of cereal o products fabrics,containg>/=85% of other Woven synthetic staple fib,o/t unbl/bl 731029 820719 621143 520919 091099 701337 880390 620449 761510 090230 391740 392043 482110 780199 902780 850213 320414 600642 190410 551299 HS Code 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 30 8.8 17.5 2.1% 1.0% 2.7% 1.5% 8.6% 4.7% -3.3% -5.8% 29.9% 14.4% 66.6% 51.3% 47.3% 21.1% 81.2% 19.8% 16.5% 37.3% 111.2% 120.8% 164.4% 6.9% 5.1% 5.9% 8.6% 0.1% 24.1% 13.3% 21.4% 15.3% 80.4% 28.9% 15.9% 13.6% 21.6% 13.6% 11.2% 92.4% 15.6% 37.5% -11.8% -31.5% 83 _* _* _* 1.6% 0.0% 0.0% 0.0% 9.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -8.3% 54.1% -16.7% -12.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 8.8 17.5 1.30 1.30 1.29 1.28 1.25 1.22 1.21 1.21 1.19 1.19 1.18 1.18 1.17 1.17 1.16 1.16 1.14 1.14 1.13 1.13 1.11 4.18 5.83 1.28 1.25 1.22 3.50 6.32 1.18 1.18 1.17 1.16 1.21 1.36 1.88 1.13 1.13 47.82 26.79 38.83 81.24 145.15 1.30 1.43 1.29 7.81 2.41 1.22 1.39 1.51 1.19 7.90 1.35 3.76 2.86 2.33 1.14 1.14 2.90 7.59 1.11 11.03 46.45 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.01 0.14 0.00 0.00 0.00 0.00 0.00 0.19 0.32 0.00 0.00 0.00 0.19 0.00 0.00 0.05 0.00 0.00 0.00 0.00 0.00 Portland cement, white, whether or not Portland artificially coloured Articles&equip for sports&outdoor games nes&swimmg&paddlg pools Pts of mach nes f the ind prep/mfr food etc ex ex/prep veg fat/oil Insulated (including enamelled or anodised) winding wire of copper Tubes, pipes and hoses, rigid; of plastics nes Tubes, Inorganic colouring matter nes and preparations based thereon Babies garments and clothing accessories of cotton, knitted Hydrogen peroxide Plain weave cotton fab,<85% mixd w m-m fib,not more than 200 g/m2,bl Nuts&seeds nes incl mx,o/w prep o presvd,sugard,sweetend,spiritd o not fab of polyester staple fib mixd w Woven viscose rayon staple fib,nes Surface-active preparations, washing and cleaning preparations, nes Sugar confectionery nes (includg white chocolate),not containg cocoa Concrete or mortar mixers Silicones in primary forms Plain weave cotton fabric,>/=85%, more than 200 g/m2, bleached Plywood consisting solely of sheets wood <= 6 mm thick (excl. of ba Containers, nes Boring or sinking machinery nes, not self- propelled Parts of air conditioning machines Parts Pullovers,cardigans&similar articles of oth textile materials,knittd 252321 950699 843890 854411 391729 320649 611120 284700 521021 200819 551511 340290 170490 847431 391000 520921 441239 420299 843049 841590 611090 _ 0 0 0 6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7.5 Adv. Pak Tariff Tariff Pak _ 0 6 0 0 0 0 0 0 0 0 0 0 0 0 30 30 2.2 7.5 10.8 Tariff India _ Pak Pak 6.6% 8.0% 1.8% -2.7% -6.4% 37.1% 66.5% 72.9% 47.6% 14.9% 40.6% 77.5% 16.3% 19.1% 15.4% CAGR -16.7% -22.1% Export -12.8% 116.9% _ SL 6.5% 8.9% 2.0% 7.1% 8.7% -1.6% 15.6% 36.6% 17.5% 25.7% 11.3% 13.1% 10.7% 52.5% 13.4% 12.3% 14.1% 17.9% CAGR Import -13.7% 84 ______0.0% 0.0% 0.0% 0.0% -8.3% -8.3% 22.5% 27.0% CAGR -13.0% -28.1% Pak-SL Pak-SL 113.0% *-42.26% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 30 2.2 10.8 Pak tariff Pak 1.10 1.10 1.09 1.09 1.07 1.06 1.06 1.06 1.06 1.06 1.06 1.05 1.05 1.05 1.05 1.05 1.03 1.03 1.02 1.02 Trade Trade Potential 1.55 1.10 1.09 1.09 1.07 1.06 1.16 1.06 7.07 4.01 3.86 1.12 1.59 1.05 1.03 1.90 16.68 11.25 10.27 21.03 World World Export Pak 2013 Pak 1.10 1.68 1.43 1.49 1.67 1.54 1.06 1.51 1.06 1.07 1.07 1.29 1.05 7.70 1.05 2.04 1.04 1.03 11.79 13.30 World World Import SL 2013 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.02 0.24 0.00 0.07 0.00 0.00 0.00 0.87 0.02 0.01 Export Pak 2013 Pak SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label outer soles/uppers of rubber or Footwear, plastics, nes Footwear, outer soles and uppers of leather, outer soles and uppers of leather, Footwear, nes Radiators for motor vehicles dresses, of cotton, not knitted Womens/girls Articles of copper, nes Articles of copper, Builders' ware nes, of plastics or oth household art&parts Table,kitchen iron or steel,nes thereof,of Textile products and articles for technical uses, Textile nes Natural steatite, crushed or powdered skirts, of other textile materials, Womens/girls not knitted Leather "incl. parchment-dressed leather" of Leather "incl. parchment-dressed the portions, strips or s Cotton yarn,>/=85%,multiple,combed,192.31 >dtex>/=125,not put up,nes Monumental/buildg stone,cut/sawn flat/ even,marble/travertine/alabaster Sodium hydroxide (caustic soda) solid Toilet soap&prep,shaped;papers&nonwovens Toilet impreg with soap toilet use fabrics of oth syn staple fib,<85% mixd Woven w/cotton,<=170g/m2,dyed Front end shovel loaders Front Seeds of anise, badian, caraway or fennel; juniper berries : Neither crushed nor ground Medium density fibreboard MDF of wood, a thickness <= 5 mm Cotton yarn,>/=85%,multi,combed,714.29 >dtex>/=232.56,nt put up,nes 640299 640359 870891 620442 741999 392590 732399 591190 252620 620459 410799 520544 680221 281511 340111 551329 842951 090961 441112 520542 HS Code 0 0 0 0 5.6% 20.9% 8.7% 13.6% 85 0.0% -0.6% 0 0 1.00 1.01 2.75 1.01 1.32 4.33 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 0.32 0.00 Vitamins and their derivatives,in dosage Gymnasium or athletics articles and equipment 950691 '300450 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 20 SL Tariff on Tariff _* 6.65% 5.79% 5.65% 9.38% 0.66% CAGR 16.03% 23.61% 88.33% 22.25% 38.31% 17.12% 10.28% 25.28% 17.55% 17.95% 12.35% 17.39% 40.81% 66.34% 45.31% -10.25% 128.87% 114.73% SL Export _* 5.06% 6.70% 6.23% 9.31% 7.14% 3.00% 3.08% CAGR 18.26% 17.32% 21.14% 54.36% 63.43% 14.55% 11.30% 31.69% 14.20% 22.40% 20.85% 10.57% 27.59% 33.45% 22.35% 137.52% Pak Import Pak _* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% CAGR SL-Pak SL-Pak 54.91% 73.95% 31.32% -10.90% -25.98% -41.29% 86 6892 7075 9316 7110 9761 7494 31117 30136 29998 28668 26771 24022 21495 20793 19961 17838 17148 16972 14861 11758 11646 11165 10853 310962 in 2013 Potential Potential 6892 2013 31117 30145 38745 28668 28417 27489 16742 25187 21654 19961 55551 26960 20766 18209 17454 14861 35664 11797 11758 11646 37058 10853 800694 Exports Sri Lanka 9527 7075 9525 7110 9761 7494 42628 29998 26771 24022 21499 20795 28548 17838 20879 16722 72918 90702 11165 42956 World World 313146 815799 168134 Imports 7164594 Pak 2013 Pak 9 0 0 0 0 0 0 4 2 0 0 0 0 0 0 0 0 0 0 0 482 209 2184 1061 Import Pak 2013 Pak An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Product label HIGH TRADE POTENTIAL SRI LANKAN EXPORTS TO PAKISTAN WITH FAVOURABLE CAGR ITEMS HIGHLIGHTED WITH FAVOURABLE EXPORTS TO PAKISTAN HIGH TRADE POTENTIAL SRI LANKAN Black tea (fermented) & partly fermented in packages exceedg 3 kg Food preparations nes Food Animal feed preparations nes Unusd postage,revenue stamps;cheque forms,banknotes,bond certific,etc Other petroleum oils and preparations electric power handling capacity not exceeding 1 KVA, Transformers nes Tricycles, scooters, pedal cars and similar wheeled toys; dolls'' carr Tricycles, Aircraft nes of an unladen weight > 2,000 kg but not exceedg 15,000 kg Measuring or checking instruments, appliances and machines, nes for use with the apparatus of headg no. 85.35,85.36 or 85.37,nes Parts Boards,panels,includg numerical control panels,for a voltage <=1000 V Articles of vulcanised rubber nes, other than hard Pneumatic tires new of rubber for buses or lorries Printed circuits Waste&scrap of paper or paperboard,nes (includg unsorted Waste&scrap waste&scrap) Gaskets, washers and other seals of vulcanised rubber Tableware and kitchenware of porcelain or china Tableware of artificial staple fibres, single, not put up Yarn,>/=85% Areca nuts Lead refined unwrought Tobacco, unmanufactured, partly or wholly stemmed stripped Tobacco, Electric conductors, for a voltage not exceeding 80 V, nes Electric conductors, for a voltage not exceeding 80 V, Wheat or meslin flour Carboys, bottles, flasks, jars, pots, phials and other containers, of 090240 210690 230990 490700 271019 850431 950300 880230 903180 853890 853710 401699 401120 853400 470790 401693 691110 551011 080280 780110 240120 854449 110100 701090 HS Code Table 2 lists the 247 Sri Lankan export items to Pakistan at the 6 digit HS code with trade potential greater than or equal to USD 500,000. Items USD 500,000. to equal than or greater potential with trade 6 digit HS code at the Pakistan to items Lankan export Sri the 247 2 lists Table with favourable CAGR metrics are highlighted in red. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 25 12.2 20.8 15.3 6.54% 1.32% 4.32% 0.58% 1.88% 4.47% -2.48% -5.30% -5.15% 10.79% 46.95% 14.82% 57.67% 62.82% 25.44% 10.07% 17.33% 39.66% 13.44% 74.49% 64.14% 30.46% 44.85% 58.75% 21.70% 10.78% 12.94% 32.45% 18.46% 316.58% 0.11% 8.99% 7.12% 1.82% 8.38% 2.01% 2.63% -3.20% -0.17% -0.22% 59.06% 34.98% 26.05% 11.78% 22.24% 41.78% 23.51% 16.77% 19.38% 32.04% 42.62% 16.90% 37.87% 13.67% 12.89% 36.50% 14.10% 17.46% 16.55% 14.57% _* _* _* 0.00% 5.84% 0.00% 0.00% 0.00% 0.00% 3.66% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.51% -8.21% -4.22% -9.03% 59.59% 24.14% -24.47% -15.37% 226.00% 118.63% 135.79% 87 6529 6388 3564 3530 3292 3130 6316 6111 5807 5772 5037 3638 5516 5454 5226 4952 3833 3783 3746 4843 4748 4104 4744 4271 4129 4632 4625 4527 4355 4182 6531 8613 3292 6111 5807 4155 5517 5751 5226 3899 4843 4104 7878 8254 4667 4625 7547 4217 12132 24442 20642 17733 11186 13496 46262 12605 28650 10845 10104 111556 6388 4001 3567 7003 3149 9954 5037 4965 3833 3783 3746 4787 4918 4271 4129 6798 5112 4588 4602 34027 12753 15165 24306 63161 38982 34260 10046 53446 38516 22161 2 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 37 19 39 35 61 35 437 297 517 247 3638 5094 3134 11961 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Articles of plastics or other materials Nos 39.01 to 39.14 nes Plates,sheets&strip of non cellular rubber,oth than hard rubber (vulc) Plates,sheets&strip of non cellular rubber,oth Bicycles and other cycles (including delivery tricycles),not motorised Articles of jewellry&pt therof of/o prec met w/n platd/clad w Medium density fibreboard MDF of wood, a thickness > 9 mm Boards,panels,includg numerical control panels,for a voltage > 1,000 V Rice, semi-milled or wholly milled, whether not polished glazed products nes Vegetable Coconut, abaca Manila hemp or Musa textilis Nee, ramie, agave and othe Textile fabrics impregnated, ctd, cov, or laminated with plastics, nes fabrics impregnated, ctd, cov, Textile Mach f fil/clos/seal/etc.btle/can/box/ bag/ctnr nes,mach aeratg bev cubes and sim nes, glazed ceramics Tiles, Lead-acid electric accumulators nes Narrow woven fab,cntg by wt>/=5% elastomeric yarn/rubber thread nes Natural rubber in smoked sheets Coconut (copra) oil&its fractions refined but not chemically modified Diesel powered trucks with a GVW not exceeding five tonnes Sacks and bags (including cones) of polymers ethylene Mens/boys trousers and shorts, of other textile materials, not knitted Boards,panels,etc for goods of headg no. 85.37,not equippd w their app Printed matter, nes Printed matter, Lentils dried, shelled, whether or not skinned split Fruits, fresh nes Fruits, Plants &pts of plants(incl sed&fruit) usd in pharm,perf,insect etc nes Plants &pts of plants(incl sed&fruit) usd in pharm,perf,insect Fruits, dried nes Fruits, Babies garments&clothg accessories of other textile materials,knitted Enzymes nes; prepared enzymes nes Liquid dielectric transformers havg a power handlg capa <= 650 KVA Green tea (not fermented) in packages exceeding 3 kg Paper labels of all kinds, printed Paper 392690 400821 871200 711319 441114 853720 100630 140490 530500 590390 842230 690890 850720 580620 400121 151319 870421 392321 620349 853810 491199 071340 081090 121190 081340 611190 350790 850421 090220 482110 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 25 25 SL Tariff on Tariff _* 0.11% 8.74% 9.77% 2.65% 1.34% CAGR -4.86% -7.18% -9.52% -3.35% -7.25% 20.25% 20.75% 13.67% 48.38% 24.81% 15.55% 17.25% 48.97% 13.41% 49.00% 22.97% 91.57% 15.87% 128.56% 121.79% 128.46% 174.92% SL Export _* 9.41% 7.46% 3.71% 5.46% 4.35% 5.67% CAGR -0.40% 27.14% 14.51% 18.86% 17.43% 13.34% 27.27% 16.82% 27.53% 40.51% 27.71% 17.71% 31.83% 14.54% 10.63% 37.02% 98.33% 18.75% 27.02% 20.99% -11.69% Pak Import Pak _* _* _* _* _* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 3.52% 0.00% 0.00% CAGR -0.67% -2.66% SL-Pak SL-Pak 72.18% 41.56% 63.32% -13.53% -21.84% 88 3055 3014 2964 2957 2821 2020 1993 1991 2759 2141 2124 2095 2726 2693 2682 2305 2152 2105 2715 2597 2479 2456 2424 2333 2242 2448 2442 2374 in 2013 Potential Potential 6205 3075 6023 2957 6428 4708 2759 2148 9908 2095 2693 2682 2152 9864 2715 2597 2495 3391 2432 6713 2442 2374 2013 16419 63964 24665 22334 144268 226986 Exports Sri Lanka 3065 9712 3907 2837 2253 1993 1991 2131 2359 3776 5266 2305 2656 2140 2487 2424 2333 2570 6904 24807 13664 87807 13039 23163 39600 25244 World World 159541 178493 Imports Pak 2013 Pak 0 0 0 0 7 7 0 0 0 0 0 0 0 0 0 0 0 10 61 16 35 16 31 233 190 122 3059 1050 Import Pak 2013 Pak An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Product label HIGH TRADE POTENTIAL SRI LANKAN EXPORTS TO PAKISTAN WITH FAVOURABLE CAGR ITEMS HIGHLIGHTED WITH FAVOURABLE EXPORTS TO PAKISTAN HIGH TRADE POTENTIAL SRI LANKAN Gloves, mittens and mitts, nes, of synthetic fibres, knitted Cartons, boxes and cases, of corrugated paper or paperboard Technically specified natural rubber (TSNR) Technically Babies garments&clothg accessories of oth textile materials,not knittd Pneumatic tires new of rubber nes nes outer soles of rubber/plastics uppers leather, Footwear, Apparel and clothing accessories (incl gloves) of plastic or conveyor belts belting of textile material Transmission Glass fibres (including glass wool) and articles thereof nes Gloves surgical of rubber Worn clothing and other worn articles Worn Sacks, bags, packing, of strip plastic material Made up articles, of textile materials, nes, including dress patterns Hooks,eyes&eyelets of base metal f clothing,footwear,travel goods,etc Hooks,eyes&eyelets of base metal f clothing,footwear,travel Parts of gas turbines nes Parts Insulated (including enamelled or anodised) winding wire of copper Machines for the reception, conversion and transmission or regeneratio Parts of lifting, handling, loading or unloading machinery nes Parts Finishg agents,dye carriers&oth prep,nes,for use in the textile indust and other vests,of textile materials,knitted T-shirts,singlets Pullovers,cardigans&similar articles of oth textile materials,knittd Chickpeas, dried, shelled, whether or not skinned split Cigarettes containing tobacco fish meat whether or not minced (excl. swordfish, toothfish and Frozen Rock drilling/earth boring tools, nes, parts Tools for pressing, stamping or punching Tools Waste and scrap of unbleached kraft or corrugated paper Waste paperboard Wheat and meslin (excl. seed for sowing, durum wheat) 611693 481910 400122 620990 401199 640399 392620 591000 701990 401511 630900 630533 630790 830810 841199 854411 851762 843139 380991 610990 611090 071320 240220 030499 820719 820730 470710 100199 HS Code 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 25 25 14.4 _* _* 8.10% 4.42% 2.94% 6.84% 4.43% 6.09% 2.98% 3.51% -5.29% 56.34% 11.38% 28.59% 33.22% 28.26% 40.68% 25.22% 24.28% 32.33% 21.96% 25.62% 24.53% -16.68% -13.31% 186.94% 106.34% 131.73% 8.15% 6.04% 8.10% 7.96% 8.85% 0.56% 4.81% 4.57% -0.97% 37.95% 20.08% 65.59% 13.76% 16.26% 16.53% 45.22% 11.31% 57.50% 13.88% 27.49% 25.79% 19.15% 96.48% 30.20% 14.67% 61.06% 12.70% -48.23% _* _* _* _* _* _* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% -1.59% 79.10% 89 1499 1534 1541 1543 1552 1620 1595 1565 1556 1660 1630 1625 1597 1670 1609 1716 1678 1728 1958 1729 1963 1943 1828 1910 1876 1872 1835 1881 1707 3181 1541 1543 1552 7372 1565 1556 7986 1625 1597 4199 1650 1716 1678 4068 1958 1729 3086 1943 3493 6981 1837 1881 16180 34676 43338 175993 6676 1534 2642 4587 1752 1595 1660 1630 6722 6748 1670 4844 9287 3745 1728 8216 6801 2500 1828 1922 2111 1896 3766 36346 13954 30791 17510 121060 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 41 12 24 208 132 537 235 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Edible mx/prep of animal/veg fats&oils/of fractions ex hd No 15.16 Chocolate and other food preparations containing cocoa nes Beads,spangles&other made up art nes,for clothing/footwear,awnings etc Staple fibres of viscose, not carded or combed Automobiles with reciprocating piston engine displacing > 3000 cc insulated, fitted with c Electric conductors for a voltage <= 1.000 V, for auxiliary plant&condenser steam/vapour generatg unit nes Parts T-shirts, singlets and other vests, of cotton, knitted T-shirts, Bedroom furniture, wooden, nes Monumental/buildg stone,cut/sawn flat/even,marble/travertine/ alabaster Optical devices, appliances and instruments, nes, of this Chapter and toilet waters Perfumes Denim fabrics of cotton,>/=85%, more than 200 g/m2 Moulds, injection or compression types, for rubber plastics Mens/boys jackets and blazers, of other textile materials, not knitted Electric conductors, for a voltage exceeding 1,000 V, nes Electric conductors, for a voltage exceeding 1,000 V, Cocoa butter, fat and oil Cocoa butter, Plate,sheet & strip of refined copper,in coil,exceeding 0.15mm thick Plate,sheet & strip of refined copper,in Cotton yarn,>/=85%, single, combed, 232.56 >dtex>/=192.31, not put up Aluminium unwrought, not alloyed Articles&equip for sports&outdoor games nes&swimmg&paddlg pools Medium density fibreboard MDF of wood, a thickness > 5 mm but <= 9 Furniture, wooden, nes Furniture, Pullovers, cardigans and similar articles of man-made fibres, knitted Compounded rubber, unvulcanised in primary forms nes Compounded rubber, Aluminium unwrought, alloyed Cartons,boxes and cases,folding,of non-corrugated paper or paperboard Carboys, bottles, flasks and similar articles of plastics 151790 180690 830890 550410 870324 854442 840490 610910 940350 680221 901380 330300 520942 848071 620339 854460 180400 740911 520523 760110 950699 441113 940360 611030 400599 760120 481920 392330 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 25 25 SL 20.9 Tariff on Tariff _* 4.25% 0.83% 4.94% 8.76% 4.89% 3.64% 0.65% CAGR -6.11% -1.69% 36.14% 25.99% 39.19% 22.07% 12.73% 40.08% 19.01% 12.52% 89.56% 45.76% 39.65% 19.23% 72.31% 12.22% 18.16% -19.62% 113.31% SL Export _* 0.23% 3.42% 5.60% 6.82% 1.74% 7.06% CAGR -6.69% -5.68% -8.83% 21.61% 11.52% 14.58% 25.63% 18.39% 20.88% 26.89% 25.92% 14.94% 22.62% 12.40% 11.78% 13.44% 21.67% 42.70% 35.19% -10.73% Pak Import Pak _ _* _* _* _* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 6.64% 0.00% 0.00% 0.00% CAGR -4.33% SL-Pak SL-Pak 33.64% 59.28% 42.37% 11.56% 41.18% -26.52% 164.82% 90 1481 1434 1422 1412 1406 1347 1319 1263 1237 1400 1387 1373 1348 1321 1294 1263 1285 1271 1264 1220 1277 1192 1183 1174 1168 1151 1155 in 2013 Potential Potential 1767 1434 8764 1412 1410 8230 1303 1400 1373 1348 9783 1349 1263 6801 1272 1264 1232 1277 1859 1183 1174 1168 2013 81224 49152 12986 36078 485430 Exports Sri Lanka 1493 8906 1422 1868 1523 1263 2420 1321 4304 2206 1929 6604 1151 1155 16229 21975 10401 43840 51999 10559 15320 11579 14085 29548 21194 16623 World World 244773 Imports Pak 2013 Pak 0 0 0 4 0 0 0 0 0 0 0 1 0 0 0 0 0 0 12 66 55 12 521 204 667 1033 5516 Import Pak 2013 Pak An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Product label HIGH TRADE POTENTIAL SRI LANKAN EXPORTS TO PAKISTAN WITH FAVOURABLE CAGR ITEMS HIGHLIGHTED WITH FAVOURABLE EXPORTS TO PAKISTAN HIGH TRADE POTENTIAL SRI LANKAN Household and toilet articles nes, of plastics Sacks and bags (including cones) of plastics nes Wheels including parts and accessories for motor vehicles Malt extract&food prep of Ch 19 <50% cocoa&hd 0401 to 0404 < 10% cocoa Books, brochures, leaflets and similar printed matter, nes Books, brochures, leaflets and similar printed matter, Labels, badges and similar woven articles of textile materials Structures&parts of structures,i/s (ex prefab bldgs headg no.9406) Cloves, whole fruit, cloves and stems, neither crushed nor ground f infant use,put up retail sale Prep of cereals,flour,starch/milk (exc hard rubber)&powder/granules obtaind Waste,paring&scrap therefrom of textile materials Brassieres and parts thereof, Activated carbon Cellulose ethers nes, in primary forms Weighing machine weights of all kinds; parts weighing machinery Weighing Clothing accessories nes, of textile materials, not knitted Medium density fibreboard MDF of wood, a thickness <= 5 mm Sugar nes, including invert sugar Paper and paper articles, nes Paper o/t sports,w outer soles of rubber/plastics&uppers tex mat Footwear Medicaments nes, in dosage Organic surface-active agents, nes Natural rubber latex, whether or not prevulcanised Blankets (o/t electric) and travelling rugs, of synthetic fibres labels of all kinds, not printed Paper Filament yarn of nylon or other polyamides, incl. monofilament < 67 Coconut (copra) oil crude Ignition wirg sets&oth sets usd in vehicles,aircraft etc 392490 392329 870870 190190 490199 580710 730890 090710 190110 400400 621210 380210 391239 842390 621710 441112 170290 482390 640419 300490 340219 400110 630140 482190 540245 151311 854430 HS Code 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 _* _* 0.17% 0.74% 8.81% 8.49% 9.93% 2.61% 4.73% 3.80% -3.34% -9.48% -0.04% -5.28% -3.06% 58.04% 10.89% 43.44% 11.87% 35.77% 11.43% 22.22% 24.47% 12.22% 20.41% 23.67% 83.31% 39.38% 29.72% _* _* 3.26% 9.78% 1.60% 4.86% 5.68% 4.50% 1.95% 1.52% 4.89% 5.62% -7.57% 10.66% 13.95% 19.86% 31.33% 17.48% 24.40% 37.28% 22.25% 13.28% 13.69% 22.54% 24.73% 17.64% 14.57% 16.74% 12.43% _* _* _* _* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% -8.38% 14.55% 16.96% -26.94% 91 996 983 971 949 946 943 935 933 929 922 903 903 898 1130 1006 1131 1014 1149 1109 1022 1019 1103 1084 1061 1028 1104 1096 1094 1083 996 943 935 933 929 905 1276 5781 1131 9406 1664 3566 3818 1019 3101 1103 6802 1061 5909 1104 1854 1096 1083 1774 1735 2045 22590 130730 301353 976 949 922 903 898 2350 5767 1006 2331 1014 1013 1149 1195 1023 5051 1162 2483 1084 1364 1028 1161 6791 2128 5181 11741 11832 12310 21631 15992 0 0 0 0 5 0 0 1 0 0 0 2 0 0 0 0 0 0 0 0 0 0 2 0 30 86 65 146 216 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Natural gums, resins, gum-resins and balsam, except arabic gum Electrical plugs and sockets, for a voltage not exceeding 1,000 volts Non-alcoholic beverages nes,excludg fruit/veg juices of headg No 20.09 Sacks and bags, of paper, nes; including cones Sacks and bags, of paper, fab obtaind from strip/the like of synthetic textile materials Woven Gloves nes of rubber Footwear, nes Footwear, of essentl oils Conc&aqueous distls of essentl oils;terpenic by-prods & other toilet brushes for use on the person Shaving,hair,nail,eyelash Lead unwrought nes Mens/boys trousers and shorts, of cotton, not knitted Cotton yarn,>/=85%, single, combed, 192.31 >dtex>/=125, not put up Sewing thread of synthetic staple fibres Moulds for rubber or plastics, nes Dressings&similar articles,impreg or coatd packagd for md use,nes Juice of fruit or vegetables, unfermented, whether not containing added sugar or other Surface-active preparations, washing and cleaning nes Mens/boys shirts, of other textile materials, knitted & varni based on polymers dissolv in a non aqueous solv nes Paints but <= Liq dielect transf havg a power handlg cap >650 KVA 10,000KVA Plates, sheets and strip of cellular rubber (vulcanised) Synthetic organic pigments and preparations based thereon Transporter or bridge cranes Transporter Gymnasium or athletics articles and equipment Paints & varnishes nes; water pigments for finishing leather Paints other mat Artificial flowers/foliage/fruit & pts articles thereof,of Office furniture, wooden, nes Plastics waste and scrap nes Fertilised eggs for incubation, of domestic fowls Fertilised 130190 853669 220290 481940 540720 401519 640590 330190 960329 780199 620342 520524 550810 848079 300590 200989 340290 610590 320890 850422 400811 320417 842619 950691 321000 670290 940330 391590 040711 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 SL 6.3 17.5 Tariff on Tariff _* _* 9.66% 2.78% 5.35% 7.30% CAGR -2.00% -0.32% -2.40% 14.36% 21.21% 20.55% 20.14% 17.65% 72.58% 80.39% 38.40% 23.87% 10.75% 74.05% 11.15% 12.89% 24.77% 79.12% 12.86% 56.47% -16.84% -20.16% 282.34% SL Export _* _* 8.61% 8.27% 1.28% 9.48% 6.62% 5.26% 5.02% 4.60% 0.30% CAGR -8.25% 35.64% 28.55% 24.02% 19.08% 26.25% 13.92% 20.87% 50.14% 12.52% 19.08% 41.22% 14.25% 17.40% 11.41% 21.60% 10.72% 28.44% Pak Import Pak _* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% CAGR -8.66% SL-Pak SL-Pak 21.98% 39.53% -28.86% -27.43% 92 885 879 863 854 847 837 836 829 824 817 816 815 815 809 801 791 788 782 772 768 754 746 741 738 738 735 734 733 731 in 2013 Potential Potential 880 837 829 824 817 816 815 815 809 801 788 772 768 746 741 792 784 734 731 7932 8146 3785 4853 1792 7768 4555 4327 2013 14390 59293 Exports Sri Lanka 885 863 854 847 862 791 804 754 738 735 837 3046 5605 4900 3389 9851 1024 1628 3440 2527 5821 1068 4433 1410 9742 2036 37057 13884 59675 World World Imports Pak 2013 Pak 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 22 46 104 4064 Import Pak 2013 Pak An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Product label HIGH TRADE POTENTIAL SRI LANKAN EXPORTS TO PAKISTAN WITH FAVOURABLE CAGR ITEMS HIGHLIGHTED WITH FAVOURABLE EXPORTS TO PAKISTAN HIGH TRADE POTENTIAL SRI LANKAN Fresh or chilled vegetables n.e.s. Fresh Buttons of plastics, not covered with textile material Articles of apparel leather or composition Wood articles nes Wood Imitation jewellery nes of base metal whether o not platd w prec ski,outr sole of rbr/plas/leather&upper leather Sports footwear,o/t Coconuts, dessicated Articles, iron or steel, nes Inductors, electric Electrical machines and apparatus, having individual functions, n.e.s. plates,sheets,film etc,of plastic in rolls <20 cm wide Self-adhesive Springs, leaf and leaves therefor, iron or steel Springs, leaf and leaves therefor, Pneumatic elevators and conveyors Containers, packing, nes (including record sleeves) of paper outer soles/uppers of rubber or plastics, nes Footwear, Mace : Neither crushed nor ground Fabrics, knitted or crocheted, of a width > 30 cm (excl. artific Fabrics, Used or new rags of textile materials, not sorted Refined sugar, in solid form, nes Refined sugar, Articles of apparel & clothing accessories nes,of vulcanised rubber Articles of stone or other mineral substances nes Waste and scrap, copper or alloy Waste Parts for diesel and semi-diesel engines Parts Cotton waste, nes Inner tubes of rubber for motor cars etc buses or lorries Rubber thread and cord, textile covered Sewing thread of synthetic filaments Natural graphite in powder or flakes Aerials&aerial reflectors of all kinds;parts suitable f use therewith 070999 960621 420310 442190 711719 640319 080111 732690 850450 854370 391910 732010 842820 481950 640299 090821 600690 631090 170199 401590 681599 740400 840999 520299 401310 560410 540110 250410 852910 HS Code 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30.1 12.5 7.18% 4.56% 8.93% 0.86% 6.62% 2.72% -5.20% -2.84% 17.09% 12.89% 20.83% 19.30% 28.85% 52.05% 77.31% 61.54% 28.65% 71.72% 58.17% 23.75% 21.33% 60.36% 36.14% 88.57% 81.52% 59.65% 38.16% -19.37% -13.90% -25.64% 3.52% 7.64% 1.09% 6.72% 7.15% 9.80% 1.02% 5.64% 4.37% -2.97% -7.26% 16.61% 14.30% 32.59% 32.09% 18.36% 50.28% 11.84% 38.18% 18.66% 84.28% 56.39% 19.19% 11.88% 17.68% 45.60% 16.09% 13.65% -20.15% 106.91% _* _* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 30.19% 60.15% -60.42% 290.97% 93 720 713 706 703 700 697 695 695 695 690 684 680 674 650 649 644 644 644 636 631 630 603 602 595 594 588 588 587 583 577 720 777 703 700 697 695 695 690 684 680 674 652 649 644 708 638 631 707 603 595 741 976 587 583 4229 3979 1593 29528 43582 111184 706 695 644 644 602 594 588 5516 3404 2445 3399 1267 1486 6740 1359 1031 4057 5637 2014 8190 4865 2064 5772 9530 1370 17162 18625 50607 28094 1610012 0 0 0 0 0 0 0 0 0 0 0 0 2 0 0 0 0 2 0 0 0 0 0 0 0 0 64 77 388 1016 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Boxes, cases, crates & similar articles of plastic Narrow woven fabrics of man-made fibres, nes Graduated compression hosiery [e.g., stockings for varicose veins], of Milk and cream nes sweetened Pineapples nes,o/w prep or presvd,sugared,sweetened,spirited not Household articles nes & toilet of porcelain or china Babies garments and clothing accessories of cotton, knitted Pts of dish washing,cleang or dryg container,packg or wrappg mach Pts of dish washing,cleang or dryg container,packg Digital processing units not sold as complete systems Wire of refind copper which the max cross sectionl dimension <=6mm Anti-oxidisg prep & other compound stabilizers for rubber or plastics Festive,carnival o oth entertainment art incl conjurg tricks&nov jokes Festive,carnival Essential oils, nes Base stations of apparatus for the transmission or reception voice, Dextrins and other modified starches Gloves mittens&mitts,o/t for sport,of leather o of composition Children's picture, drawing or colouring books Swivel seats&variable height adjustment oth than those of headg 94.02 Communion wafers,empty cachets f pharm use&sim prod&bakers' wares nes Commodities not elsewhere specified oil and its fractions refined but not chemically modified Palm iron or steel Chain, roller, Refrigerating or freezing display counters, cabinets, show-cases, etc Cashew nuts, without shell, fresh or dried & other works trucks fitted with lifting equipment of fork-lift Parts Quilted textile products in the piece Hair preparations, nes Parts of electrical transformers, static converters and inductors Parts Sauces and preparations nes mixed condiments seasonings Industrial fatty acids, acid oils nes 392310 580632 611510 040299 200820 691190 611120 842290 847150 740819 381230 950590 330129 851761 350510 420329 490300 940130 190590 999999 151190 731511 841850 080132 843120 581100 330590 850490 210390 382319 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 25 25 SL 12.5 Tariff on Tariff 6.43% 1.31% 3.47% CAGR -0.43% -0.60% 69.26% 67.99% 27.73% 17.21% 36.71% 41.78% 59.91% 17.68% 50.13% 26.31% 42.59% 18.00% 84.93% -15.33% -14.26% 159.02% 100.90% SL Export 8.29% 5.59% 9.38% 1.07% CAGR 32.47% 35.69% 23.69% 12.84% 10.77% 39.23% 23.45% 11.60% 40.82% 22.73% 28.97% 11.41% 10.87% 12.99% 32.80% 41.39% -10.90% -13.52% Pak Import Pak _* _* _* _* _* _* 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% CAGR -6.19% SL-Pak SL-Pak 13.90% 89.76% -30.66% 148.02% 94 577 575 574 570 570 570 570 557 555 552 549 549 547 546 542 540 536 533 530 524 513 506 in 2013 Potential Potential 577 576 573 570 570 876 572 552 549 547 891 533 530 536 506 7916 1974 3863 2036 2013 70175 20564 10497 Exports Sri Lanka 577 570 622 557 549 588 543 536 514 1809 3578 8052 5285 6446 4051 2020 2298 9327 9573 18055 15114 World World 157945 Imports Pak 2013 Pak 0 2 2 3 0 0 0 0 0 0 0 1 3 0 0 0 1 0 17 41 12 1432 Import Pak 2013 Pak An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Product label HIGH TRADE POTENTIAL SRI LANKAN EXPORTS TO PAKISTAN WITH FAVOURABLE CAGR ITEMS HIGHLIGHTED WITH FAVOURABLE EXPORTS TO PAKISTAN HIGH TRADE POTENTIAL SRI LANKAN Statuettes and other ornamental articles, of plastics Mens/boys shirts, of cotton, knitted Waters incl mineral&aeratd,containg sugar o sweeteng matter Waters flavourd Beauty or make-up preparations nes; sunscreen sun tan preparations Film and sheet etc, cellular of plastics nes Ornamental trimmings in the piece,o/t knit;tassels,pompons&similar art Whiskies Mixtures of juices unfermentd¬ spiritd whether o not sugard sweet Hair shampoos Insulated (including enamelled or anodised) winding wire, nes Chemical/allied industry preparations/prods nes Knottd nettg of twine/cordage/rope,and oth made up nets m-m tex mat weave cotton fabrics,>/=85%, more than 200 g/m2, dyed Twill Lubricating preparations & similar not cntg pet oils,nes Labels,badges and similar articles,not woven,of textile materials,nes Plants live, nes Inst & app,for measurg or checkg voltage,current,etc w/o a record dev Machinery for the preparation of fruits, nuts or vegetables Headphones, earphones and combined microphone/speaker sets Stoppers, lids, caps and other closures of plastics Inner tubes of rubber for bicycles Seeds, fruit and spores for sowing, nes 392640 610510 220210 330499 392119 580890 220830 200990 330510 854419 382490 560819 520932 340399 580790 060290 903039 843860 851830 392350 401320 120999 HS Code Annexure B: List of product lines on no concession lists with high RCA Table 3 lists Pakistani items on Sri Lanka’s no concession list that Pakistan has a higher RCA in than does Sri Lanka. Adv 75.2 13.16 41.36 71.44 12.784 15.792 14.288 24.064 15.792 14.288 25.568 36.096 27.448 45.872 42.864 41.736 73.696 50.384 73.696 64.296 125.584 103.024 Pak RCA Pak 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9.4 1.88 3.76 3.76 1.88 13.16 SL RCA 75.2 26.32 41.36 71.44 12.784 15.792 14.288 24.064 15.792 14.288 25.568 36.096 29.328 45.872 46.624 51.136 73.696 50.384 73.696 66.176 129.344 103.024 Pak RCA Pak 95 30 30 30 30 19 30 30 30 30 30 30 30 30 4.1 Pak 63.8 14.1 27.9 10.8 33.6 29.4 135.9 219.6 Tariff on Tariff 0 4 0 0 0 0 0 0 0 41 78 41 14 87 559 821 199 217 5973 1761 7136 Trade Trade 16301 Potential 3361 2801 8125 2013 28646 57636 57200 64251 78844 19077 11346 82492 25155 49495 42532 74931 17981 37692 130263 274068 158948 253701 Exports 1790214 Pak World World Pak 4 1 0 0 0 9 41 24 83 44 14 88 22 559 821 425 207 227 8737 2098 2013 28393 17528 World World Imports Sri Lankan 0 5 0 3 5 0 0 0 0 0 0 1 51 10 40 SL 966 226 337 Pak Pak 2764 1134 12092 10392 2013 to exports An Assessment of the Pakistan-Sri Lanka Free Trade Agreement PAKISTAN RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE PAKISTAN Product Label frozen Potatoes, Potatoes, fresh or chilled nes Potatoes, Soap&orgn surf prep,shapd,nes;papers&nonwovens impreg w soap/prep,nes Sesamum seeds, whether or not broken washg mach of a dry linen capa Household/laundry-type <=10 kg,nes across the instep/arnd sole/uppr of leathr,strap Footwear,outr big toe Guavas, mangoes and mangosteens, fresh or dried Undenaturd ethyl alcohol of an strgth by vol 80% vol/ higher Bovine carcasses and half carcasses, fresh or chilled Goat meat, fresh, chilled or frozen Knottd nettg of twine/cordage/rope,nes,and made up nets oth tex mat Rice, husked (brown) Ethyl alcohol and other spirits, denatured, of any strength Leather further prepared after tanning or crusting "incl. parchment-dr Rice, broken Matches Rice, semi-milled or wholly milled, whether not polished glazed Cane molasses Mixtures of two/more the prods different headgs to this chapter Manicure or pedicure sets and instruments (including nail files) Fruits, dried nes Fruits, etc rect or not >7 cm etc;arti colourd granules/chippings/ Tiles powder 071010 070190 340119 120740 845019 640320 080450 220710 020110 020450 560890 100620 220720 411310 100640 360500 100630 170310 091091 821420 081340 680210 HS code Adv 7.52 3.76 3.76 3.76 3.76 6.016 6.016 5.264 5.264 5.264 5.264 4.512 3.008 3.008 3.008 3.008 3.008 2.256 3.008 3.008 12.032 Pak RCA Pak 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3.76 3.76 15.04 SL RCA 7.52 3.76 3.76 3.76 3.76 6.016 6.016 5.264 5.264 5.264 5.264 4.512 3.008 6.768 3.008 3.008 2.256 3.008 3.008 15.792 18.048 Pak RCA Pak 6 30 75 30 30 30 30 30 30 15 15 30 30 30 7.5 250 Pak 30.6 31.8 16.5 10.8 17.5 96 on Tariff 8 0 9 0 0 37 63 31 13 279 465 784 189 506 242 262 162 157 1908 2398 1166 Trade Trade Potential 871 641 336 294 1967 9264 4797 6161 1893 5420 6216 3697 8799 2013 11195 18112 90795 18450 19086 40330 11175 38832 Exports Pak World World Pak 8 0 9 0 37 63 20 31 13 355 500 784 202 506 242 262 163 159 1908 2398 1352 2013 World World Imports Sri Lankan 0 0 0 0 0 0 0 0 0 0 0 1 2 0 0 0 76 35 13 43 SL 186 Pak Pak 2013 to exports An Assessment of the Pakistan-Sri Lanka Free Trade Agreement PAKISTAN RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE PAKISTAN Product Label Milk and cream powder sweetened exceeding 1.5% fat Articles of bedding/furnishing, nes, stuffed or internally fitted Cigars, cheroots, cigarillos and cigarettes, cntg tobacco substitutes Buttermilk,curdled milk & cream,kephir ferm or acid cream nes Tobacco refuse Tobacco Salt (includg table salt&denaturd salt) pure sodium chloride&sea water prts of plants nes,prep/presvd by vin/ Veg,fruit,nut&edible acetic acid Paints&varnishes based on polyesters,dispersed in a non- Paints&varnishes aqueous medium Mixtures of vegetables, frozen Sweet biscuits Containers, packing, nes (including record sleeves) of paper Cereal flour nes Butcher's knives, hunting knives and other having fixed blades Twine, cordage, ropes and cables, of other materials Twine, Hides and skins of goats or kids, in the dry state "crust", without wo Refrigerators, household type, nes Honey, natural Honey, fish meat whether or not minced (excl. swordfish, Frozen toothfish and Leguminous vegetables, shelled or unshelled, fresh chilled nes Sugar confectionery nes (includg white chocolate),not containg chocolate),not (includg white nes Sugar confectionery cocoa Pencil leads, black or coloured Pencil 040229 940490 240290 040390 240130 250100 200190 320810 071090 190531 481950 110290 821192 560790 410622 841829 040900 030499 070890 170490 960920 HS code 1.88 2.256 1.504 1.504 1.504 1.504 2.256 2.256 2.256 1.128 1.128 2.256 1.128 0 0 0 0 0 0 0 0 0 1.88 1.88 1.88 1.88 3.76 2.256 1.504 1.504 1.504 1.504 2.256 2.256 2.256 3.008 3.008 2.256 3.008 30 30 30 30 15 30 3.4 2.5 6.8 11.3 17.5 17.5 16.4 97 0 2 20 54 37 34 21 903 926 124 930 630 1634 928 873 469 237 9902 1053 6071 5953 3028 2826 10035 74610 10314 0 2 20 54 37 34 21 903 930 124 930 630 1634 0 0 0 4 0 0 0 0 0 0 0 0 0 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement nes outer soles of rubber/plastics uppers leather, Footwear, Homo prep (jams,fruit jellies etc) ckd whether/nt sugard/ sweetend Building bricks Uncooked pasta, not stuffed or otherwise prepared, nes Sleeping bags Tiles, cubes and sim Tiles, frozen nes Vegetables, Mixtures of juices unfermentd¬ spiritd whether o not sugard sweet Fish prepared or preserved, except whole in pieces Safety razor blades, including blade blanks in strips Twine nes, cordage, ropes and cables, of sisal textile fibres Twine Footwear with uppers of leather or composition leather, nes with uppers of leather or composition leather, Footwear Rice in the husk (paddy or rough) 640399 200710 690410 190219 940430 690710 071080 200990 160420 821220 560729 640510 100610 18.8 18.8 Adv. 26.32 26.32 33.84 41.36 39.48 20.68 22.56 26.32 63.92 71.44 13.16 16.92 13.16 11.28 15.04 15.04 44.368 53.768 18.424 18.048 10.152 12.032 16.168 413.224 SL RCA 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3.76 0.752 0.752 2.256 2.256 4.512 3.008 6.768 0.752 Pak RCA Pak 18.8 18.8 18.8 45.12 26.32 26.32 43.24 33.84 54.52 41.36 20.68 22.56 26.32 63.92 71.44 20.68 22.56 13.16 16.92 13.16 13.16 11.28 16.92 15.04 15.04 415.48 SL RCA 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8 0 0 0 0 0 -3 24 9018 Growth 98 0 2 0 5 6 0 7 4 1 1 1 5 33 38 25 99 153 405 228 238 422 121 121 353 4625 5772 Trade Trade Potential 5 5 9 15 25 10 25 25 25 15 30 20 25 25 15 20 20 52 SL 6.3 6.3 6.3 6.3 25.6 15.3 23.8 22.5 Tariff on Tariff 0 9 1 65 97 87 568 405 228 238 101 121 238 593 779 9522 5981 5733 5112 1037 6300 1510 4974 2013 48186 24306 206743 Imports Pak World World Pak 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9 0 0 0 0 24 Pak 11961 2013 to SL Exports An Assessment of the Pakistan-Sri Lanka Free Trade Agreement SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label kernel/babassu oil their fract,refind but not chemically modifid Palm fabrics of oth syn staple fib,<=170g/m2,unbl/bl Woven designed to receive refrigerating or freezing equipment Furniture Corsets,braces & similar articles & parts thereof,of textile materials Corsets,braces & similar articles parts thereof,of Yarn of polyester filaments, multiple, nes, not put up Yarn Tobacco, unmanufactured, not stemmed or stripped Tobacco, of garments/of clothg accessories,of textile materials,knittd Parts Milk and cream powder unsweetened exceeding 1.5% fat Film and sheet etc, non-cellular of regenerated cellulose Green tea (not fermented) in packages exceeding 3 kg Parts of garments or clothg accessories nes,of tex mat,not knittd Parts Woven fab of polyester staple fib mixd w viscose rayon fib,nes Woven Pedestrian controlled tractors Pedestrian of polyester staple fibres, multiple, not put up, nes Yarn,>/=85% Ties, bow ties and cravats, of other textile materials, not knitted Ties, briefs and panties, of other textile materials, knitted Womens/girls fabrics, containing>/=85% of polyester staple fibres, unbl or bl Woven of polyester staple fibres, single, not put up Yarn,>/=85% Paper, filter, in rolls or sheets, uncoated filter, Paper, Sodium hydroxide (caustic soda) solid Vegetable products nes Vegetable Inner tubes of rubber nes Alkyd resins Agarbatti & other odoriferous preparations which operate by burning Automobiles w reciprocatg piston engine displacg not more than 1000 cc of polyester filaments, single, >50 turns per metre, not put up Yarn 40221 90220 151329 551319 841891 621290 540262 240110 611790 392071 621790 551511 870110 550922 621590 610829 551211 550921 480540 281511 140490 401390 390750 330741 870321 540252 HS Code Table 4 lists Sri Lankan items on Pakistan’s no concession list that Sri Lanka has a higher RCA in than does Pakistan. 4 lists Sri Lankan items on Pakistan’s Table 9.4 9.4 9.4 9.4 9.4 9.4 9.4 7.52 7.52 7.52 7.52 7.52 7.52 5.64 5.64 5.64 5.64 5.64 5.64 5.64 3.76 3.76 5.64 3.76 3.76 3.76 3.76 3.76 7.896 4.136 4.136 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15.04 1.504 1.504 1.504 9.4 9.4 9.4 9.4 9.4 9.4 9.4 7.52 7.52 7.52 7.52 7.52 7.52 5.64 5.64 5.64 5.64 5.64 5.64 5.64 3.76 3.76 5.64 3.76 5.64 5.64 3.76 3.76 3.76 3.76 24.44 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -5 77 -16 143 198 99 0 1 0 0 4 0 0 0 0 1 0 7 8 0 2 17 17 57 63 52 47 121 224 235 328 630 570 3638 4843 1151 1499 5 20 20 15 25 20 20 20 20 15 25 25 10 60 90 60 25 25 20 90 20 6.3 9.6 9.6 22.5 18.3 20.8 15.4 30.1 20.9 14.4 1 8 17 571 121 429 538 622 579 1681 3879 1132 1350 3081 4965 1312 1834 1707 1151 3150 5643 6676 18833 38711 22549 78409 53446 181493 196831 234320 1610012 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 77 517 208 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Urea resins; thiourea resins Film and sheet etc, non-cellular of polyesters nes Film and sheet etc, cellular of polymers vinyl chloride Rubber articles inflatable nes, vulcanised rubber Hot roll iron/steel, not coil >600mm x <3mm Angles, shapes and sections, cold formed, nes pipes and hoses, rigid; of polyethylene Tubes, slips and petticoats, of other textile materials, knitted Womens/girls Film and sheet etc, cellular of polyurethane Textured yarn nes,of polyester filaments,not put up for retail sale Textured Hot roll iron/steel, not coil >600mm x 3-4.75mm Cooking appliances & plate warmers for liquid fuel, iron or steel Locks of a kind used for furniture base metal Diesel powered buses with a seating capacity of > nine persons Coconut (copra) oil&its fractions refined but not chemically modified Animal/veg fats&oils&fract boild oxid,etc,& ind mix/prep nes ex 15.16 Margarine, excluding liquid margarine Polyvinyl chloride, not mixed with any other substances Polyvinyl Automobiles w reciprocatg piston engine displacg > 1000 cc to 1500 Automobiles with diesel engine displacing more than 2500 cc Diesel powered trucks with a GVW not exceeding five tonnes Electricity supply, production and calibrating meters Electricity supply, Sesame oil&its fractions whether/not refind,but not chemically modifid Coconut (copra) oil crude Refrigerators, household type, compression-type and crayons, with leads encased in a rigid sheath, nes Pencils oil and its fractions refined but not chemically modified Palm Edible mx/prep of animal/veg fats&oils/of fractions ex hd No 15.16 Whiskies Polyethylene having a specific gravity of less than 0.94 Polyethylene acetate, in aqueous dispersion Polyvinyl 390910 392069 392112 401695 720854 721669 391721 610819 392113 540233 720853 732112 830130 870210 151319 151800 151710 390410 870322 870333 870421 902830 151550 151311 841821 960910 151190 151790 220830 390110 390512 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 1.88 1.88 1.88 1.88 1.88 1.88 1.88 Adv. 3.384 3.008 3.008 3.008 3.008 2.256 2.256 2.632 SL RCA 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2.256 0.752 0.752 0.752 0.752 1.504 1.504 3.008 Pak RCA Pak 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 5.64 3.76 3.76 3.76 1.88 3.76 3.76 3.76 1.88 5.64 1.88 1.88 1.88 1.88 1.88 SL RCA 0 0 0 2 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 -1 -1 21 -13 -14 Growth 100 0 4 2 0 0 0 1 8 0 1 0 0 0 0 2 0 50 18 81 37 18 15 513 734 153 352 473 221 1321 Trade Trade Potential 0 5 20 20 25 15 15 25 25 30 20 20 20 25 10 25 25 90 90 25 SL 6.3 6.3 14.5 12.5 12.5 21.3 12.5 10.3 24.1 Tariff on Tariff 3 0 9 39 15 382 514 157 561 546 114 307 473 221 9051 1535 9742 1556 4549 3480 2580 1321 1153 2783 1096 2013 23869 28258 14630 18576 Imports Pak World World Pak 0 1 0 0 0 0 2 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 2 0 0 0 0 0 25 Pak 2013 to SL Exports An Assessment of the Pakistan-Sri Lanka Free Trade Agreement SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label Polyesters nes, unsaturated Polyesters Inner tubes of rubber for bicycles Plates, sheets, film, foil and strip, of non-cellular polymers viny Gummed or adhesive paper and paperboard, surface-coloured, surface- dec High tenacity yarn (o/t sewg thread),of polyester filaments,not put up Sewing thread of synthetic filaments fab of polyester staple fibres mixd w/wool/fine animal hair,nes Woven Hot roll iron/steel, not coil >600mm relief pattern Flat rolled i/nas, electrolytically zinc coated >600mm than hot rolld,drawn or extrudd,hght 80mm more Sections,U,i/nas,nfw Sections,H,i/nas,nfw than hot rolld,drawn or extrudd,hght 80mm more Air cond mach nes, not incorporating refrigerating unit Optical fibre cables, made up of individually sheathed fibres Diesel powerd trucks w a GVW exc five tonnes but not twenty Clothing accessories nes, of textile materials, not knitted Sodium hydrogencarbonate (sodium bicarbonate) Film and sheet etc, non-cellular of polymers propylene Plates, sheets, film, foil and strip, of non-cellular polymers viny Air conditioning machines window or wall types, self-contained Ceramic sinks, wash basins etc & similar sanitary fixtures nes Handles for knives, of base metal High erucic acid rape or colza oil "fixed which has an Green tea (not fermented) in packages not exceeding 3 kg Pneumatic tires new of rubber for motorcycles Linseed oil and its fractions, refined but not chemically modified Maize (corn) oil and its fractions,refined but not chemically modified Beer made from malt Rum and tafia Smokg tobacco,whether o not cntg tobacco substitutes in any proportion 90210 390791 401320 392049 481149 540220 540110 551513 720840 721030 721631 721633 841583 854470 870422 621710 283630 392020 392043 841510 691090 821195 151499 401140 151519 151529 220300 220840 240310 HS Code 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 12 87 -23 -435 101 0 0 0 0 8 0 0 63 49 84 88 96 10 29 65 19 114 193 108 280 329 816 220 570 118 720 524 196 315 1434 6529 5 9 17 20 12 20 20 10 20 20 20 20 20 20 20 20 20 25 20 25 25 25 25 12.5 12.5 12.5 12.5 12.5 17.5 12.5 12.2 464 724 292 151 106 136 565 411 3077 2263 1031 2710 2529 1632 2553 8888 1508 4796 3269 9851 3105 5285 8906 5516 9327 3564 32643 23109 12406 34027 189484 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 11 12 96 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement based on polymers,dispersed in an aqueous Paints&varnishes medium,nes Mastics; painters' fillings Pre-shave, shaving or after prep Personal deodorants & antiperspirants Personal Polyethylene having a specific gravity of 0.94 or more Polyethylene Organic composite solvents&thinners,nes;prepard paint&varnish removers Acrylic polymers nes, in primary forms Melamine resins Phenolic resins Sausage casings of hardened protein or cellulosic materials Carboxymethylcellulose and its salts Tubes, pipes and hoses, rigid; of polyvinyl chloride Tubes, Tubes, pipes and hoses nes, plastic Tubes, Fittings, plastic Self-adhesive plates,sheets,film etc,of plastic in rolls Self-adhesive Self-adhesive plates, sheets, film etc, of plastic nes Self-adhesive Film and sheet etc, non-cellular of polymers styrene Film and sheet etc, non-cellular of polymethyl methacrylate Film and sheet etc, non-cellular of polycarbonates Film and sheet etc, non-cellular of polyamides Film and sheet etc, cellular of polymers styrene Film and sheet etc, nes of plastics Film and sheet etc, cellular of plastics nes Lavatory seats and covers of plastics Sacks and bags (including cones) of plastics nes Boxes, cases, crates & similar articles of plastic Stoppers, lids, caps and other closures of plastics Reservoirs, tanks, vats etc of a capacity exceeding 300 l, plastics Spools, cops, bobbins and similar supports, of plastics Pneumatic tires new of rubber for bicycles Articles of plastics or other materials Nos 39.01 to 39.14 nes 320990 321410 330710 330720 390120 381400 390690 390920 390940 391710 391231 391723 391739 391740 391910 391990 392030 392051 392061 392092 392111 392190 392119 392220 392329 392310 392350 392510 392340 401150 392690 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 Adv. SL RCA 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Pak RCA Pak 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 SL RCA 0 0 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 521 281 Growth 102 1 2 0 0 0 2 0 4 0 0 1 1 1 3 68 10 53 10 70 51 28 113 216 430 602 2821 1347 Trade Trade Potential 9 9 10 20 25 25 15 15 20 20 25 20 20 25 15 10 20 20 SL 8.3 13.5 14.5 12.5 12.5 22.5 16.3 12.5 12.5 Tariff on Tariff 73 60 50 32 612 264 223 841 602 164 133 2837 2031 1868 4831 1581 2209 9022 1022 2013 20023 13569 18629 15723 26657 23426 21964 32290 Imports Pak World World Pak 0 0 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 16 521 281 Pak 2013 to SL Exports An Assessment of the Pakistan-Sri Lanka Free Trade Agreement SRI LANKA RCA ADVANTAGE ITEMS WITH NO CONCESSION RCA ADVANTAGE SRI LANKA Product Label Pneumatic tires new of rubber nes of a w >36 cm,sheets one side cm Paper,household/sanitary,rolls Needleloom felt and stitch-bonded fibre fabrics dresses, of cotton, not knitted Womens/girls Brassieres and parts thereof, of textile materials Brassieres and parts thereof, of base metal w/n platd w prec met Imitation jewellery cuff-links&stud Imitation jewellery nes Hot roll iron/steel, not coil >600mm x >10mm Flat rolled prod, i/nas, not further worked than hot rolled, nes Flat rolld prod,i/nas,platd or coatd with tin,>/=600mm wide, Sections,L,i/nas,nfw than hot rolld,drawn or extrudd,of a height <80mm Sections,I,i/nas,nfw than hot rolld,drawn or extrudd,hght 80mm more thn hot rolld,drawn or extruded,hght>/=80mm Sections,L or T,i/nas,nfw Angles,shapes§,i/nas,nfw thn hot rolld/drawn/extrudd,hght>/=80mm Cookg appliances&plate warmers for gas fuel or both gas&o/fuels,i s Foil,aluminium,backed,not exceeding 0.2mm thick excluding any Foil,aluminium,backed,not backing Locks of base metal, nes Clasps and frames with clasps, incorporating locks, of base metal Watertube boilers with a steam production exceeding 45T per hour Watertube Pumps fitted or designed to be with a measuring device nes Centrifugal pumps nes Refrigerating or freezing display counters, cabinets, show-cases, etc Compression type refrigeratg/freez equip whose condensrs are heat exch Refrigerating or freezing equipment nes of refrigerating or freezing equipment, nes Parts Electric instantaneous or storage water heaters and immersion Electric smoothing irons 401199 480300 560210 620442 621210 711711 711790 720851 720890 721012 721621 721632 721640 721650 732111 760720 830140 830150 840211 841319 841370 841850 841861 841869 841899 851610 851640 HS Code 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.128 1.128 1.504 1.128 1.128 1.128 1.128 1.128 1.128 1.128 1.504 1.128 1.128 1.128 1.128 1.128 0 0 0 0 0 0 0 3.76 3.76 0.752 0.752 2.256 0.752 0.752 0.752 0.752 0.752 0.752 0.752 2.256 0.752 0.752 0.752 0.752 0.752 1.88 1.88 1.88 1.88 1.88 1.88 1.88 5.64 1.88 1.88 5.64 3.76 1.88 1.88 1.88 1.88 1.88 1.88 1.88 3.76 1.88 1.88 1.88 1.88 1.88 0 0 0 0 0 0 0 5 0 0 0 0 0 0 0 0 0 0 0 0 0 1 14 -95 -3987 103 2 2 0 2 1 0 0 1 3 0 0 28 68 32 41 78 697 105 329 158 160 2957 10853 16750 310962 5 20 20 20 20 50 15 25 25 10 15 20 10 25 20 20 20 15 25 25 20 6.3 7.5 22.5 22.5 73 32 81 42 92 110 480 160 1470 1900 1494 1639 1466 3907 1043 1267 5868 4842 42956 17106 18963 23931 14919 72947 313146 0 0 0 0 0 0 0 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 14 2184 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Ovens;cookers,cookg plates,boilg rings,grillers & roasters,elec,nes Electro-thermic appliances, domestic, nes Video recording or reproducing apparatus nes Filament lamps,of a power not exceed 200 W&for voltage exceedg 100 V Electric conductors, for a voltage not exceeding 80 V, nes Electric conductors, for a voltage not exceeding 80 V, Bodies for passenger carrying vehicles Wheelbarrows, hand-carts, rickshaws and other hand propelled vehicles blouses and shirts,of other textile materials,not knitted Womens/girls Mattress supports Black tea (fermented) & partly fermented in packages exceedg 3 kg Babies garments&clothg accessories of oth textile materials,not knittd Disodium carbonate Ethylene-vinyl acetate copolymers Polystyrene, expansible Polystyrene, pipes and hoses, rigid; of plastics nes Tubes, fabrics,>/=85% of textured polyester filaments, dyed, nes Woven of polyester staple fibres mixd w/ arti fib,not put up,nes Yarn Tiles, cubes and sim Tiles, Household articles nes & toilet of porcelain or china Nuts edible, fresh or dried, whether not shelled peeled, nes Soap nes Tubes, pipes and hoses nes, plastic, not reinforced etc, with fittings Tubes, Articles for the conveyance or packing of goods nes, plastics dresses, of other textile materials, not knitted Womens/girls blouses and shirts, of cotton, not knitted Womens/girls 90240 80290 851660 851679 852190 853922 854449 870710 871680 620690 940410 620990 283620 390130 390311 391729 540752 550951 690810 691190 340120 391733 392390 620449 620630 Sri Lanka Free Free Lanka Sri Text of Pakistan- Pakistan- of Text Trade Agreement Trade An Assessment of the Pakistan-Sri Lanka Free Trade Agreement FREE TRADE AGREEMENT BETWEEN THE ISLAMIC REPUBLIC OF PAKISTAN AND THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA The Government of the Islamic Republic of Pakistan and the Government of the Democratic Socialist Republic of Sri Lanka (hereinafter referred to individually as a “Contracting Party” and collectively as the “Contracting Parties”), CONSIDERING that the expansion of their domestic markets, through commercial cooperation, is an important prerequisite for accelerating their processes of economic development, BEARING in mind the desire to promote mutually beneficial bilateral trade in goods and services, CONVINCED of the need to establish and promote free trade arrangements for 105 strengthening intra-regional economic cooperation and the development of national economies, RECOGNIZING that progressive reductions and elimination of obstacles to bilateral trade through a bilateral free trade agreement (hereinafter referred to as “The AGREEMENT”) will contribute to the expansion of bilateral as well as world trade, HAVE agreed as follows: ARTICLE I - OBJECTIVES The Contracting Parties shall establish a Free Trade Area in accordance with the provisions of this Agreement and in conformity with relevant provisions of the General Agreement on Tariffs and Trade, 1994. 2. The objectives of this Agreement are: An Assessment of the Pakistan-Sri Lanka Free Trade Agreement (i) To promote through the expansion of trade in goods and services the harmonious development of economic relations between Pakistan and Sri Lanka, (ii) To provide fair conditions of competition for trade in goods and services between Pakistan and Sri Lanka, (iii) To contribute in this way, by the removal of barriers to trade in goods and services, to the harmonious development and expansion of bilateral as well as world trade, ARTICLE II - DEFINITIONS For the purpose of this Agreement: 1.“Tariffs” mean basic customs duties included in the national schedules of the Contracting Parties, 2. “Para tariffs” mean border charges and fees, other than “tariffs”, on foreign trade transactions of a tariff-like effect which are levied solely on imports, but not those indirect taxes and charges, which are levied in the same manner on like domestic products. Import charges corresponding to specific services rendered are not considered as para- tariff measures, 3. “Non-tariff barriers” mean any measures, regulation, or practice, other than “tariffs” and “para-tariffs”, the effect of which is to restrict imports, or to significantly distort trade within the Contracting Parties, 4. “Products” mean all products including manufactures and commodities in their raw, semi- processed and processed forms. 5. “Preferential Treatment” means any concession or privilege granted under this Agreement by a Contracting Party through the elimination of tariffs on the movement of goods and services, 6. “The Committee” means the Joint Committee referred to in Article Xl, 7. “Serious Injury” means significant damage to domestic producers, of like or similar products, resulting from a substantial increase of preferential imports in situations which 106 cause substantial losses in terms of earnings, production or employment unsustainable in the short term. The examination of the impact on the domestic industry concerned shall also include an evaluation of other relevant economic factors and indices having a bearing on the state of the domestic industry of that product, 8. “Threat of Serious Injury” means a situation in which a substantial increase of preferential imports is of a nature so as to cause “serious injury” to domestic products, and that such Injury, although not yet existing is clearly imminent. A determination of threat of serious injury shall be based on facts and not on mere allegation, conjecture, or remote or hypothetical possibility. 9. “Critical circumstances” mean the emergence of an exceptionalsituation where massive preferential imports are causing or threatening to cause “serious injury” difficult to repair and which calls for immediate action. ARTICLE III - ELIMINATION OF TARIFFS, PARA TARIFFS An Assessment of the Pakistan-Sri Lanka Free Trade Agreement AND NON-TARIFF BARRIERS 1. The Contracting Parties hereby agree to establish a Free Trade Area for the purpose of free movement of goods and services between their countries through elimination of tariffs on the movement of goods and services in accordance with the provisions of Annexes A& B which shall form an integral part of this Agreement. 2. The Contracting Parties further agree to eliminate from the date this Agreement enters into force, all non-tariff barriers, and any other equivalent measures on the movement of goods and services, other than those imposed in accordance with Article IV of this Agreement. 3. The Contracting Parties also agree not to make any increase in the existing para tariffs, if any, or introduce new or additional para tariffs, without mutual consent. 4. In the implementation of this Agreement the Contracting Parties shall pay due regard to the principle of reciprocity. ARTICLE IV - GENERAL EXCEPTIONS Nothing in this Agreement shall prevent a Contracting Party from taking action and adopting measures, which it considers necessary for the protection of its national security, the protection of public morals, the protection of human, animal or plant life and health, and the protection of articles of artistic, historic, and archaeological value, as is provided for in Article XX and XXI of the General Agreement on Tariff and Trade, 1994 and WTO Agreement on Application of Sanitary and Phytosanitary Measures. ARTICLE V - NATIONAL TREATMENT The Contracting Parties affirm their commitment to the principles enshrined in Article III of GATT 1994. ARTICLE VI - STATE TRADING ENTERPRISES 1. Nothing in this Agreement shall be construed to prevent a Contracting Party from 107 maintaining or establishing a state trading enterprise as understood in Article XVII of General Agreement on Tariff and Trade, 1994. 2. Each Contracting Party shall ensure that any state enterprise that it maintains or establishes acts in a manner that is not inconsistent with the obligations of that Contracting Party under this Agreement and accords nondiscriminatory treatment in the import from and export to the other Contracting Party. ARTICLE VII - RULES OF ORIGIN 1. Products covered by the provisions of this Agreement shall be eligible for preferential treatment provided they satisfy the Rules of Origin as set out in Annex C to this Agreement which shall form an integral part of this Agreement. 2. For the development of specific sectors of the industry of either Contracting Party, lower value addition norms for the products manufactured or produced by those sectors may be considered through mutual negotiations. An Assessment of the Pakistan-Sri Lanka Free Trade Agreement ARTICLE VIII - SAFEGUARD MEASURES 1. If any product which is subject to preferential treatment under this Agreement is imported into the territory of a Contracting Party in such a manner or in such quantities as to cause or threaten to cause serious injury in the territory of that Contracting Party, such Contracting Party may, with prior consultations with the other Contracting Party, except in critical circumstances, suspend provisionally without discrimination, the preferential treatment accorded to that product under the Agreement. 2. When action has been taken by either Contracting Party in terms of paragraph 1 of this Article, it shall simultaneously notify the other Contracting Party and the Joint Committee established in terms of Article Xl. The Committee shall enter into consultations with the Contracting Parties and endeavour to reach mutually acceptable agreement to remedy the situation. If the consultations fail to resolve the issue within sixty days, the Contracting Party affected by such action shall have the right to withdraw the equivalent preferential treatment in accordance with the WTO Agreement on Safeguards. ARTICLE IX - DOMESTIC LEGISLATION The Contracting Parties shall be free to apply their domestic legislation to restrict imports in cases where prices are influenced by unfair trade practices like subsidies or dumping. Subsidies and dumping shall be understood to have the same meaning as in the General Agreement on Tariff and Trade 1994 and the relevant WTO Agreements. ARTICLE X - BALANCE OF PAYMENT MEASURES 1. Notwithstanding the provisions of this Agreement, any Contracting Party, facing balance of payments difficulties, may suspend provisionally the preferential treatment as to the quantity and value of merchandise permitted to be imported under the Agreement. When such action has taken place, the Contracting Party, which initiates such action, shall simultaneously notify the other Contracting Party. 2. A Contracting Party, which takes action according to paragraph 1 of this Article, shall afford, 108 upon request from the other Contracting Party, adequate opportunities for consultations with a view to preserving the stability of the preferential treatment provided under this Agreement. ARTICLE Xl - JOINT COMMITTEE 1. A Joint Committee shall be established at Ministerial level. The Committee shall meet initially within six months of the entry into force of the Agreement and thereafter at least once a year to review the progress made in the implementation of this Agreement and to ensure that benefits of trade expansion emanating from this Agreement accrue to the Contracting Parties equitably. The meetings of the Joint Committee will take place, to the extent possible, to coincide with the meetings of the Sri Lanka-Pakistan Joint Economic Commission. 2. The Committee may set up any other Sub-Committee and/or Working Group for specific purposes as it may consider necessary. 3. In order to facilitate cooperation in customs matters, the Contracting Parties agree to An Assessment of the Pakistan-Sri Lanka Free Trade Agreement establish a Working Group on customs related issues including harmonization of tariff headings. The Working Group shall meet as often as required and shall report to the Joint Committee on its deliberations. 4. (i) The Committee shall accord adequate opportunities for consultation on representations made by either Contacting Party with respect to any matter affecting the implementation of the Agreement. (ii) The Committee shall adopt appropriate measures for settling any matter arising from such representations within 6 months of the representation having been made. Each Contracting Party shall implement such measures immediately. 5. The Committee shall nominate one apex Chamber of Trade and Industry in each country as the nodal chamber to represent the views of the trade and industry on matters relating to this Agreement. ARTICLE XII - CONSULTATIONS 1. Each Contracting Party shall accord sympathetic consideration to and shall afford adequate opportunity for consultations regarding such representations as may be made by the other Contracting Party with respect to any matter affecting the operation of this Agreement. 2. The Committee set up under Article Xl may meet at the request of a Contracting Party to consider any matter for which it has not been possible to find a satisfactory solution through consultations under paragraph 1 above. ARTICLE XIII - SETTLEMENT OF DISPUTES 1. Any dispute that may arise between commercial entities of the Contracting Parties shall be referred for amicable settlement to the nodal Chambers. Such references shall, as far as possible, be settled through mutual consultations by the Chambers. In the event of an amicable solution not being found, the matter shall be referred to an Arbitration Tribunal 109 for a binding decision. The Tribunal shall be constituted by the Joint Committee. 2. Any dispute between the Contracting Parties regarding the interpretation and application of this Agreement or any instrument adopted within its framework shall be amicably settled through negotiations failing which a notification may be made to the Committee by any one of the Contracting Parties for settlement of the dispute. ARTICLE XIV - DURATION AND TERMINATION OF AGREEMENT This Agreement shall remain in force until either Contracting Party terminates this Agreement by giving six months written notice to the other Contracting Party, through Diplomatic Channels, of its intention to terminate the Agreement. ARTICLE XV - AMENDMENTS The Agreement may be modified or amended through mutual agreement of the Contracting Parties. Proposals for such modifications or amendments shall be submitted to the Joint An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Committee and upon acceptance by the Joint Committee shall be approved in accordance with the applicable legal procedures of each Contracting Party. Such modifications or amendments shall become effective when confirmed through an exchange of diplomatic notes and shall constitute an integral part of the Agreement: Provided, however, that in emergency situation proposals for modifications may be considered by the Contracting Parties and if agreed, given effect to through an exchange of diplomatic notes. ARTICLE XVI – ANNEXES TO BE FINALISED Annex A (Attachments I, II, III, and IV) containing the No Concession lists and tariff preferences to be granted by the Government of Pakistan and Annex B (Attachments I, II, and III) containing the No Concession list and tariff preferences to be granted by the Government of Sri Lanka and Annex C containing the Rules of Origin under the Agreement shall be finalized within a period of 90 days of the signing of this Agreement. All the Annexes shall become effective and shall constitute an integral part of the Agreement when the two Contracting Parties have confirmed through the exchange of Diplomatic Notes. ARTICLE XVII – ENTRY INTO FORCE The Agreement shall enter into force on the 30th day after the Contracting Parties hereto have notified each other through Diplomatic Channels that their respective constitutional requirements and procedures have been completed in respect of this Agreement including the Annexes under Article XVI. In Witness Whereof the undersigned, duly authorized thereto by their respective Governments, have signed this Agreement. Done in duplicate at Colombo this 1st day of August, 2002 in two originals in the English language. 110 An Assessment of the Pakistan-Sri Lanka Free Trade Agreement An Assessment of the Pakistan-Sri Lanka Free Trade Agreement Sectorial Sectorial Lanka FTA Lanka FTA Perspective Perspective regarding effects regarding of the Pakistan-Sri of the Pakistan-Sri Sectorial Perspective on Effects of Pakistan-Sri Lanka FTA Shown ahead are the opinions of a Pakistani industry regarding the Pakistan-Sri Lanka FTA,and the perceived effects it has had or may in the future have on the local manufacturing industry. This submission (including, but not limited to interpretations, conclusions and recommendations) is solely reflective of the opinions of the company that has submitted the information, and does not reflect the findings of the report or the views of the Pakistan Business Council. The purpose of including this submission is to allow for a wider range of viewpoints. Pakistan’s Automobile Industry The Auto Sector of Pakistan has voiced concerns regarding potential PSFTA concessions allowing the entry of subsidized Indian auto products into the Pakistani market through Sri Lanka. They have noted that Sri Lanka has sought concessions along auto product tariff lines during a review of the PSFTA in 2008 within which it does not itself have export potential. 112 However, investment from India in Sri Lanka would allow both Sri Lanka and India to capitalize on the requested concessions. Parts such as Ignition Coils (HS Code 851130), CDI Units (Old HS Code 853230 Revised HS Code 851180) and parts and accessories for motorcycles including mopeds (Old HS Code 871419, revised HS Code 871410, this HS Code includes 49 localized parts) etc. face basic custom duty at 35% and an additional duty of 15 %. These same parts, if imported from Sri Lanka, would face a duty of 5 % or less. The view of the auto sector is therefore that concessions to Sri Lanka on such products should be strictly blocked, since they would allow cheaper Indian products to harm a domestic value-adding industry. An Assessment of the Pakistan-Sri Lanka Free Trade Agreement 8th Floor, Dawood Centre, M. T. Khan Road, Telephone: (+9221) 35630528-29 Fax: (+9221) 35630530 Website: www.pbc.org.pk Printed & Designed at: The Times Press (Pvt) Ltd. Times The Printed & Designed at: