South Asia Free Trade Agreement
With the South Asia Free Trade Agreement (SAFTA), BY 2013, India will reduce its items to 100 and by 2017, Pakistan will do the same. According to Munir Qureshi, Secretary of Commerce, businesses in Pakistan will have a further five years to “become competitive,” against Indian goods following the trade regime liberalization between the two countries. The list is for trade items within Afghanistan and seven SAARC (South Asian Association for Regional Cooperation) countries.
India has already reduced more than 300 tariff lines, including agriculture, leather and textile commodities. Richard Olson, America’s new Ambassador to Pakistan, promised that he would be encouraging bilateral ties “based on mutual respect and common interests,” shortly after he arrived in the country. He will be presenting his ideas to President Asif Ali Zardari, and work with Pakistanis from the entire nation, with the hope of developing a positive, working relationship between them all. He firmly believes that Pakistan has “tremendous potential” for the escalation of economic opportunity; enhancing people’s quality of life and more.
India has a lot of potential for the escalation of business with Pakistan too. Indeed, according to Harvest Tradings CEO, Ahmad Jawad, India could soon become a huge market for Pakistani fruits and vegetables in a free trade environment. As well, exporting these could bring in three billion dollars in next five years. Pakistani agricultural leaders have indicated that produce should not be put in the negative list on trade with India. Rather value added products like mango pulp could be put in the list. Once there is access to the Indian market, Pakistan should be able to escalate the volume and value of produce exports. This would then divert the focus from western high-value markets. America for example needs heavy investment for international standard and QC necessary for exports. Since the estimate for Pakistani kinnow is approximately two million tons this year, India could be a big importer of it – around 300,000 tons of it.