Pakistan and Sri Lanka have recently signed a historic free trade agreement (FTA), which is expected to have a significant impact on both countries` economic growth. The agreement, which came into effect on June 12, 2021, is expected to boost bilateral trade between the two countries, create job opportunities, and accelerate economic development.
In this article, we will discuss some of the key advantages of the Pakistan-Sri Lanka free trade agreement.
Increased Trade Volume
The free trade agreement is expected to significantly increase trade volume between the two countries. Sri Lanka is already one of Pakistan`s largest trading partners in South Asia, with the trade volume currently standing at approximately $460 million. With the implementation of the FTA, this trade volume is expected to increase by at least 10%.
The agreement aims to eliminate tariffs on a wide range of goods, including textiles, clothing, and agricultural products. This will make it easier for Pakistani businesses to export their products to Sri Lanka and vice versa, creating new opportunities for trade.
Another significant advantage of the Pakistan-Sri Lanka free trade agreement is the reduction in costs for businesses. With the elimination of tariffs, businesses will no longer have to pay high import and export fees, making their products more affordable for consumers.
Reduction in Non-Tariff Barriers
In addition to eliminating tariffs, the FTA also aims to reduce non-tariff barriers, such as licensing requirements and technical barriers to trade. This will make it easier for businesses to enter each other`s markets, promoting greater competition and innovation.
Enhanced Investment Opportunities
The free trade agreement will also create new investment opportunities for businesses in both countries. With more open markets and reduced costs, businesses will be encouraged to invest in each other`s economies, leading to increased job creation, economic growth, and prosperity.
Promotion of Regional Integration
The Pakistan-Sri Lanka free trade agreement is also a significant step towards greater regional integration in South Asia. As South Asian economies become increasingly integrated, there is a greater potential for increased trade, investment, and prosperity.
The Pakistan-Sri Lanka free trade agreement is a significant step towards greater economic cooperation between the two countries. By promoting greater trade volume, reducing costs, and creating new investment opportunities, the agreement is expected to boost economic growth and create new job opportunities. As South Asian economies become increasingly integrated, the FTA marks a significant step towards greater regional integration and prosperity.