All fully preserved products, such as tea, fish, spices, etc., can easily benefit from tariffs on each other`s markets, provided they can benefit from tariff concessions. Sri Lanka has identified a total of 102 six-digit shS tariff lines, on which Pakistan will have 100% duty-free access. The Pakistan-Sri Lanka Free Trade Agreement (PSFTA) was signed between the two governments in August 2002 and came into force in July 2005. Sri Lanka gained immediate duty-free access for 206 products, while Pakistan gained duty-free access to 102 products. The psFTA conditions granted an immediate concession to Pakistan and Sri Lanka for important export products. Pakistan`s exports to Sri Lanka increased from $97 million in 2004 to $355 million in 2018, nearly 3.6 times more than over the 14-year period, due to the positive impact of the FTSP on trade. Similarly, Sri Lanka`s exports to Pakistan increased from $47 million in 2004 to US$105 million in 2018, almost doubling over the same period. The study, which examines trade between Pakistan and Sri Lanka as part of their free trade agreement (FTA), concludes that the FTAS has provided a significant market share to Sri Lanka and Pakistan. The study shows that the emerging trade relationship between Pakistan and Sri Lanka offers many opportunities and opportunities to increase current bilateral trade to more than $2.7 billion. Currently, the volume of trade is only $460 million. The second part of the study covers the terms of the structure of the free trade agreement between Pakistan and Sri Lanka and briefly examines the perspectives and mutual benefits of the FTSP.
The third part of the study covers a detailed comparative analysis of the benefits of the FTSP and compares them to trade under bilateral agreements. The study uses the Trade Complementarity Index instrument to determine whether Sri Lankan exports meet Pakistan`s import demand and find a degree of sectoral convergence or imbalance between Sri Lanka and Pakistan. In addition, the study examines that trade expansion has occurred significantly for both countries, but Sri Lanka`s trade deficits have remained high with Pakistan. Under the FTSP, customs restrictions and non-tariff barriers have overshadowed the effects of tariff rationalization, making it the main export barrier for both countries. The study highlights potential products that may satisfy their market demand. Due to a lack of awareness, exporters in both countries are not fully exploiting the market potential and benefits of the free trade agreement. The study also draws the attention of business leaders and exporters from both countries to explore new markets and new paths in their economies. In order to increase current bilateral trade, the study suggests that both countries need to diversify their products through research, innovation and value enrichment, which adapt to the requirements of the other market. As opportunities are documented, it is necessary to develop a channel for the exchange of ideas and proposals in order to transform the available opportunities into a real volume of exchange. Therefore, the study recommends that trade organizations in both countries facilitate trade delegations and full communication between the two countries` trade communities in order to strengthen and strengthen bilateral trade and trade relations between Pakistan and Sri Lanka. The list of emergency concessions contains a total of 206 six-digit HS (product) tariff lines, and Sri Lanka immediately enjoys 100% duty-free access for these products on the Pakistani market.
Sri Lanka granted Pakistan, duty-free, a tariff quota of 6,000 m/t of Basmati rice and 1,000 m/t of potatoes per calendar year (January-December).