Pak-Turkey FTA now matter of weeks

The inking of Free Trade Agreement (FTA) between Pakistan and Turkey is reportedly now a matter of weeks as both sides were waiting for Recep Tayyip Erdogan victory in the Constitutional referendum, well informed sources told Business Recorder. President Mamnoon Hussain and Prime Minister Nawaz Sharif have congratulated Turkish President Recep Tayyip Erdogan and the Prime Minister has also telephoned to felicitate him
Pakistan's ambassador to Turkey, sources said made all out efforts to sign the pact by December 31, 2016 aimed at taking its credit, but it could not happen as Pakistan FTA negotiating team was not satisfied with the offer list of Turkey. The sources said, Pakistan and Turkey had exchanged the second draft of offer in recent months aimed at reaching the final draft of the agreement.
According to sources, in the second offer, Pakistan reduced the exclusion list from 22 percent to 14 percent whereas Turkey increased its exclusion list from 12 percent to 13 percent withdrawing concession on 126 tariff lines of cotton and textured yarn offered in the fifth round .
Turkey removed three tariff lines from its exclusion (sesame seed, footwear uppers of rubber or plastic and rice) and offered concessions on imports of rice on Tariff Rate Quota (TRQ) basis allowing import of 6,000 tons of rice at zero rate. Pakistan's offer for round six reduces the average trade weighted tariff (MNF+ RD) from 16 percent to 9.5 percent. Turkey's offer reduced the trade weighted tariff (GSP tariff +AD) from 18 percent to 16.6 percent.
Pakistan has offered a trade weighted concession of 41 percent on existing imports from Turkey while Turkey has offered a trade weighted concession of 7.8 percent to imports from Pakistan.
In response to Pakistan's high priority request, Turkey has offered three tariff lines for further concessions at an additional two percent trade weighted concession. In response to Turkey's high priority, Pakistan has offered 221 tariff lines out of 305 tariff lines requested by Turkey. Additional trade weighted concessions offered by Pakistan on these tariff lines is 34 percent.
Pakistan had submitted a list of 114 high priority items to Turkey in round six held in Ankara on December 20-22, 2016. Turkey has only offered further concession on three tariff lines in response to Pakistan's high priority request. Additional trade weighted margin of preference granted by Turkey is two percent.
Turkey's response to Pakistan's high priority list is summarized as follows: 57 tariff lines of 114 were excluded in Turkey's initial offer submitted in Round 5. Turkey has now revised the offer for round 6. In the revised offer 56 items remain sensitive. One tariff line (a variety of sesame seed) has been offered at 15 per cent MOP (MFN 10 per cent reduced to 8.5 per cent).
The source said, 19 high priority tariff lines were offered on reduced duty by Turkey in Round 5. In the revised offer two tariff lines, dates and flour meals of crustaceans have been offered at zero percent tariff, whereas nine tariff lines were offered for reduction to a zero tariff in unequal phases in seven years.
These include PET and other plastic items. Turkey has offered these tariff lines to Pakistan's competitors such as South Korea, Germany and Malaysia at zero percent. Pakistan requests a level playing field on these items upon entry into force of the FTA.
The sources said, four tariff lines were offered for reduction to zero over seven years and they remain in the same category and have not been offered for immediate reduction.
Pakistan requested 25 tariff lines that were offered by Turkey at zero percent in order to ensure that these concessions are not withdrawn from Turkey in a revised offer. Turkey has withdrawn concession on 126 tariff lines of cotton and textured yarn and has now added them to the exclusion list in the revised offer for 6th Round.