Pakistan, Thailand fail to reach deal on TRMs

MUSHTAQ GHUMMAN

ISLAMABAD: Pakistan and Thailand have reportedly failed to reach an agreement on Tariff Reduction Modalities (TRMs) for the proposed Free Trade Agreement (PATHFTA), well informed sources told Business Recorder.Technical teams of both countries held threadbare negotiations for two days (January 17-18) in Islamabad on each other's offer of tariff lines requests.

Thailand has comparative advantage in around 1,000 commodities, while Pakistan has relative advantages in 684 commodities.

The sources said the Pakistani team presented a comparison of the offer lists that had already been exchanged.

Pakistan, sources said, has proposed a new article in the proposed draft of the FTA aimed at seeking compensation in case Non Tariff Barriers (NTBs) disrupt her export to Thailand.

According to sources, Pakistani side maintains that Thailand has not presented an offer which may provide the rationale for further deliberations which implies that Thailand's offer list was rejected outright. Likewise, Thailand delegation also declined to accept Pakistan's offer list due to tariff liberalisation issues.

The agreement is likely to be signed in the middle of this year after both sides finalise recommendations that may be accommodated in the agreement. In sixth round of FTA negotiations, both sides discussed the text of the agreement, (TRM), request list and under preparation offers list, said a senior official of the Ministry of Commerce. The seventh round would be held in March in Bangkok.

The sources said, Thailand delegation noted the reservations of Pakistani side on the offer list, adding that Pakistan has asked Thailand team to bring a new request list.

Thailand team, sources said also sought clarifications on Regulatory Duty (RD) and Additional Customs Duty (ACD). Both countries agreed that base rates for RD and ACD would be the same as on November 30, 2016.

In reply to a question, the sources said, Pakistan has urged Thailand to relax specifications for Pakistani potatoes but her request has not yet been entertained.

Pakistan has also taken a firm stand on auto sector, arguing that it would protect its existing auto sector but the Commerce Ministry has proposed that a meeting would be arranged between Pakistani vendors of auto sector with the representatives of Thailand auto sector so that a win solution could be found.

A delegation of Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) led by its Chairman Mashood Ali Khan held a detailed meeting with the officials of Commerce Ministry on Friday and discussed the expected impact of proposed PATHFTA on Pakistan's stumbling vending industry. Aamir Allawala, former Chairman PAAPAM was also part of the delegation.

Secretary Commerce Azmat Ali Ranjha, sources said, assured PAAPAM that the government would protect the existing auto vendors business and would consult the local industry before taking any final decision on FTA. He said the government would not hurt the local industry.

Aamir Allawala told this correspondent that the Association had a good meeting with the Commerce Ministry officials wherein the delegation explained local industry's position.

"Thailand is vigorously insisting we open our auto sector but if we explain ground realities to them they would know that major players already exist in Pakistani market in comparison to Thailand," he added.