Pakistan to sign a free trade agreement with Latin America Bloc

With the External Relations Group of Mercosur, Pakistan will sign a Free Trade Agreement (FTA) in early 2019 to bridge the trade deficit with countries of the Latin America trading bloc.

pakistan-trade-agreement-latin-america
Pakistan Trade Agreement with Latin America

Summary:

  • Pakistan decided to enhance its trade ties with the Latin American countries
  • Approval of Pakistan’s appeal to sign a Free Trade Agreement (FTA)
  • Efforts by Commerce Ministry
  • Policy to boost exports
  • Mercosur providing opportunities to Pakistan
  • The scope of technical assistance from Brazil and Argentina

With the External Relations Group of Mercosur, Pakistan will sign a Free Trade Agreement (FTA) in early 2019 to bridge the trade deficit with countries of the Latin America trading bloc.

Mercosur – a trade bloc comprising Argentina, Brazil, Paraguay, Uruguay, and Venezuela, will look after the matter of examining Pakistan’s request in early 2019.

This was revealed during a meeting between Commerce Secretary YounusDagha and a delegation led by Argentinian Ambassador Ivan Ivanissevich.

The agreement will provide an opportunity to Islamabad to bridge the trade deficit with countries of the Latin America trading bloc.

pakistan-latin-america-trade-agreement
Free Trade Agreement between Pakistan and China

Efforts by Ministry of Commerce:

To restart negotiations on clinching preferential and free trade agreements with Mercosur, the Ministry of Commerce is making efforts.

The commerce secretary pointed out that Latin America is one of the most important non-traditional markets.

But, despite having a potential for exports in both traditional and non-traditional sectors, Pakistan’s market share is negligible.

Check this too: Top 7  steps by PTI Government that shaped Pakistan’s Economic Future

Greater market access:

In 2006, a Framework Agreement on Trade had been signed by the

Ministry of Commerce to achieve greater market access in the region.

The secretary said that the agreement was based on a Preferential Trade Agreement (PTA) leading to a Free Trade Agreement (FTA).

He said that Pakistan had annual trade of $1 billion with Mercosur countries. Also, trade with Argentina stood at $200 million and that had the potential to rise to $800 million.

Industrialization policy to boost exports:

A comprehensive industrialization policy is made to focus on engineering, chemical, information technology, and agriculture sectors and now Pakistan’s exports are not restricted to textile only.

To bridge the trade deficit with Mercosur countries, an opportunity will be provided by the FTA. The commerce secretary emphasized and called Argentina and Brazil productive markets.

“For both Pakistan and Argentina, Pakistan-Mercosur FTA will create win-win opportunities,” he said.

The secretary told that the Ministry of Commerce is making efforts in the wake of Pakistan´s bid to sign PTA and FTA with Mercosur states.

The secretary further told that Pakistan’s request is being taken up by the External Relations Group of Mercosur.

The Ministry of Commerce has exaggerated its trade diplomacy by engaging embassies of Brazil and Argentina in Islamabad.

Opportunities for Pakistan:

Mercosur will provide Pakistan an opportunity to diversify exports of products and markets and also enhance trade with Latin American countries.

Argentina and Brazil are world leaders in agro-food production and adoption of modern technology in making innovations in seed production and food processing.

This will introduce Pakistan new products in the pharmaceutical, information and communications technology, auto part and light engineering sectors. Further, it will benefit the textile industry.

The secretary said, “It will help in strengthening our business and trade relations in the region and will provide a level playing field to Pakistan vis-a-vis its competitors in Latin America.”

The scope of technical assistance from Brazil and Argentina:

In agricultural conservation and food processing in Pakistan, the Commerce Ministry sees a huge scope of technical assistance and investment from Brazil and Argentina.

The Ministry suggested that Pakistan and Argentina can mutually collaborate in agro-food processing, meat processing, cattle rearing, and fattening, etc.

As there is a significant potential in the region for the export of IT-enabled services, the Commerce Ministry is focusing on increasing collaboration in ICT investment with Latin American countries.

By enhancing cooperation in the chemical and pharmaceutical sectors, both the sides could mutually benefit especially in the value chain, import regulations and certifications in the pharmaceutical sector.

The commerce ministry has also attracted Brazil & Argentina embassies in Islamabad.

 

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