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Pak-Malaysia ink early harvest agreement

01 October, 2005

KUALA LUMPUR: Federal Minister for Privatization & Investment Dr. Abdul Hafeez Shaikh, left, and Malaysian Trade Minister Rafidah Aziz, right, sign an

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KUALA LUMPUR, October 02(Online): Pakistan and Malaysia on Saturday signed early harvest programme (EHP)agreement for free trade are between the two Islamic countries.

The agreement was signed by Minister for Privatization and investment Dr Abdul Hafiz Sheikh on behalf of the government of Pakistan while the Malaysian minister for International trade and industry Dato' Seri Rafidah Aziz represented his country.

The EHP would be implemented from January 1, 2006 and shall expire upon entry into force of the FTA or March 31, 2007.

The EHP was based on 2004 import statistics and the Most Favoured Nation (MFN) applied tariff rates of January 1, 2005 of both countries.

It covers products with MFN tariffs of 10 per cent and below and upon implementation products with MFN tariffs of. five percent would be eliminated and 10 per cent would be accorded a margin of preference of 50 percent .

Pakistan's EHP offer to Malaysia covered 5.49 per cent of import value (RM 146.3 million) involving 125 tariff lines for machinery, mechanical equipments and appliances constituting 36 per cent of the total EHP value. It also included plastic products (30.08 per cent); chemical products (20.2) per cent); rubber and rubber products 6.0 per cent; and timber products 5.4 per cent.

Malaysia's offer to Pakistan covers 114 tariff lines covering import of RM 22.7 million or 10.97 per cent of its total imports from Pakistan. The products included textile and clothing (95.3per cent of the total EHP value); agricultural products (4.7 per cent); and jewelry.

Under this agreement interim Rules of Origin (ROO) would be applied to the products. A 40 per cent local content rule would be applied on the EHP products while product specific rules would be applied to textile and clothing, and jewelry. The EHP ROOO would be replaced by a new set of rules under the FTA.

The World Trade Organization (WTO) provisions governing safeguard actions, emergency measures and other remedies, including anti-dumping and countervailing measures shall apply to products under the EHP and it shall be superseded and replaced by the relevant disciplines to be negotiated under the FTA. Disputes concerning the implementation of the EHP agreement shall be settled by mutual consultation.

The two countries agreed to continue negotiations for concluding the FTA by mid-2006. The decision to negotiate bilateral FTA between Malaysia and Pakistan was made during the official visit of the Malaysian Prime Minister Date' Seri Abdullah Hj. Ahmad Badawi to Pakistan in February this year.

The two countries agreed to pursue an EHP aimed to deliver benefits to the private sector of both the countries ahead of the FTA as well as to provide impetus for an early conclusion of FTA negotiations.

According to official source bilateral trade between the two countries in 2004 was to the tune of RM 2,870.9 million. Malaysia's exports to Pakistan were to the tune of RM 2,664.9 million while imports from Pakistan amounted to RM 206.00 million. Total trade during January -July 2005 amounted to RM 1,634.2 million with exports valued at RM 1,509.4 million and imports worth RM 124.8 million.

Major Malaysian exports to Pakistan include palm oil, constituting 57.8 per cent of the total exports), carboxylic and derivatives, margarine and shortening, and telecommunication equipment.

Malaysian imports from Pakistan mainly include fresh, chilled and frozen fish (22, 7 per cent) rice (22.4 per cent) textile yarn , fabrics, woven and man made textile material and woven cotton fabrics.

Malaysian investment in Pakistan during the period of 1999-March 2005 amounted to RM 08.0 million. Investments are in the form of equity investment and joint ventures. Malaysian companies have invested in power generation, bulking storage facility for vegetable oil, property development and oil and gas exploration.

Approved investments from Pakistan in Malaysia during 2004 to April 2005 amounted to RM 3.1 million in textiles and textiles produts.

End.

Reader Comments:

Trade Agreements need proper publicity

The above picture presents the impression as if the government is the major player in trade and commerce. The fault lies with the trade. One doesn't find an active part on our traders. For instance did the minister for "privatisation and investment" negotiate the agreement after being fed by the trade, or he is doing a favour to the economy.

The newspapers entire focus lies on advertisements through which premier publications earn billions, according to Sh. Rashid. The chambers have little rapport with the traders and, especially with the general public. The Islamists are absolutely illierate in the field of trade and industry.

There is a pressing need for a weekly business magazine on the pattern of America's venerable "Business Week" (BW). The BW provides investigative and analytical reporting on all segments of the economy. In one of its old issues, it published a story in the box on the deplorable working of the "Food and Drugs" (F&D)Department. The target was the drugs. It likened the working of the department to an "arthritic turtle", where the lower bureaucracy sometimes delayed sanctions on new products for an year or two. It looked at the applications not for the merits of the cases but where to find something to return them with what is commonly known as an "objection". If that is the case in the most progressive country's biggest department, how do we compare our government bureaucracy's working? The bloated clerks would raise an "objection" and, then, suggest a solution by pocketing a bribe. It is a common sight in the Customs department. The only way to curb this tendency is frequent "hiring and firing" method. There used to be a department called "Efficiency, Organization amd Methods" (EO&M)wing. I happened to know its deputy secretary in the 1960 onward. He did lot of useful work and earned wide respect. Does this still exists. If it does, let it come close to the public.

The bottom line is to emphasise on trade and commerce. For this the role of the government should be cast as "business friendly". It should seek feedback from the business community. As it is, the government tries to force feed the trading community. We are living in an era where survival depends on two factors. First, a working democracy that is comparable to those of the West. Second, a market oriented economy in which business plays the major role. And the government functionaries feel the weight of the business media to keep them from becoming bosses instead of public servants.

Sher mohammad.
Email: sher_apr@yahoo.com

Sher Mohammad, Pakistan - 02 October, 2005

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