The free trade agreements with India and Pakistan cover only trade in goods. The agreements provide for duty-free imports and tariff preferences for industrial and agricultural products. A national value added of 35% is required in order to benefit from the concessions granted under the agreements. The Pakistan-Sri Lanka Free Trade Agreement (FTA) entered into force in July 2005 after its signature. The objective of this study is to analyse the performance of the free trade agreement to date and to highlight the opportunities offered to both partners to increase bilateral trade. The study also highlights some sectors that, if promoted, could potentially increase trade between the two countries. These include Pakistan`s cement and motorcycle industry, as well as Sri Lanka`s garment and apparel industry, tourism and tea industry. In May 2017, Sri Lanka regained the privileges of the European Union`s (EU) Generalised System of Preferences (GSP+) for Sri Lankan exports. GSP+ trade preferences consist of the complete elimination of tariffs on 66% of tariff headings covering a wide range of goods, including textiles and fisheries. The GSP+ programme is subordinated to Sri Lanka`s promotion of human and labour rights and the achievement of sustainable development. Pakistan, Sri Lanka Free Trade Agreement (PSFTA) entered into force on 12 June 2005. Since the entry into force of the agreement, there has been a significant improvement in trade. Pakistan implemented its last phase-out obligation in March 2009, and Sri Lanka now has duty-free market access for more than 4500 products.

Sri Lanka also fulfilled all its phase-out commitments in November 2010. Sri Lanka`s exports to Pakistan increased from $26 million from January to May 2010 to $34 million in the corresponding period of 2011, growing by 30.8%. This increase is mainly due to a significant increase in exports such as natural rubber, plant products, shredded coconut, new tires, MDF plates, dried pulse vegetables, copra, natural graphite, fabrics, etc. from January to May 2011 compared to the same period in 2010. However, exports of certain products such as cake and other solid residues, sewing threads made from synthetic staple fibres, tea, nutmeg, pepper, rubber strips, coconut oil and its fractions, etc. decreased from January to May 2011 compared to the same period in 2010. A number of new products have also entered the Pakistani market following the introduction of ALEP. Under ALEP, 2,352 certificates of origin were issued from January to May 2011, compared to 2,166 certificates of origin issued under ALEP issued during the same period in 2010. The 10th meeting of the Pakistan-Sri Lanka Joint Economic Commission is scheduled to take place in Islamabad in July 2011. In this context, a meeting of the Joint Economic Commission (Pre-JEC) between the two countries took place in Colombo in March 2011. During the pre-JEC meeting, the two sides agreed to discuss implementation issues under ALEP at the 10th JEC meeting to create a more favorable environment for trade between the two countries. Broader Economic Cooperation Agreement with Pakistan Describes the trade agreements to which pakistan is a party.

Provides resources for U.S. companies to obtain information on the use of these agreements. Bilateral trade with Sri Lanka has largely been in Pakistan`s favour since the signing of the free trade agreement. Pakistan`s exports more than doubled between 2005 and 2011, while imports remained relatively constant; Pakistan recorded its largest trade surplus of $287 million in 2011. Exports fell after 2011, reaching $269 million in 2017. Imports, on the other hand, have increased by about 60 percent since 2011, peaking at $103 million in 2017. Pakistan`s trade surplus with Sri Lanka was $166 million in 2017. The Pakistan-Sri Lanka Free Trade Agreement (ALEPPO) was signed between the two governments in August 2002 and entered into force in July 2005. Sri Lanka enjoyed immediate duty-free market access for 206 products, while Pakistan enjoyed duty-free access to 102 products.

The terms of ALEPPO granted Pakistan and Sri Lanka immediate concessions of 100% for the main export products. Pakistan`s exports to Sri Lanka increased from $97 million in 2004 to $355 million in 2018, nearly 3.6 times more over the 14-year period, apparently due to the positive impact of ALEPPO on trade. Similarly, Sri Lanka`s exports to Pakistan increased from $47 million in 2004 to $105 million in 2018, almost double those of the same period. The study, which examines trade between Pakistan and Sri Lanka under its Free Trade Agreement (FTA), concludes that ALEPPO has provided Sri Lanka and Pakistan with a significant market share. 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 US$2.7 billion. Currently, the volume of trade amounts to only 460 million US dollars. The second part of the study deals with the terms of the structure of the Pakistan-Sri Lanka Free Trade Agreement and briefly discusses the prospects and mutual benefits of ALEPPO. The third part of the study includes a detailed comparative analysis of the benefits of ALEPPO and compares it to trade under bilateral agreements. The study uses the Trade Complementarity Index instrument to see if Sri Lankan exports meet Pakistan`s import demand and to determine a level of sectoral agreement or mismatch between Sri Lanka and Pakistan. In addition, the study examines that there has been a significant increase in trade for both countries, but Sri Lanka`s trade deficits with Pakistan have remained high. Under ALEPPO, tariff restrictions and non-tariff barriers overshadowed the effects of tariff rationalization, so this was the main obstacle to both countries` export performance.

The study shows potential properties that can meet the demand of their market. Due to the 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 entrepreneurs and exporters in both countries to explore new markets and pathways in their economies. To boost current bilateral trade, the study suggests that both countries need to diversify their products through research, innovation and value creation in order to adapt to the needs of each other`s markets. Since opportunities are documented, a channel for the exchange of ideas and suggestions must be developed in order to translate the available opportunities into a real volume of transactions. Therefore, the study recommends that the trade organizations of the two countries facilitate trade delegations and full communication between the business communities of the two countries in order to strengthen and strengthen bilateral trade relations between Pakistan and Sri Lanka. The Pakistan-Sri Lanka Free Trade Agreement entered into force in July 2005 after being signed in August 2002. Under the free trade agreement, Sri Lankan enjoyed immediate duty-free market access for 206 products.

Pakistan, on the other hand, enjoyed duty-free access for 102 products. Further concessions were agreed in November 2010 […].