They said in November last, Prime Minister Shaukat Aziz held talks with his Nepalese counterpart to boost trade as the latter expressed desire to enhance bilateral co-operation in trade, investment and further strengthening of relations in all spheres.
Shaukat Aziz, the sources said responded positively in beginning talks with Nepal on FTA and taking other steps to increase and diversify bilateral trade.
According to these sources, the Nepalese commerce minister during his visit to Pakistan to participate in the fourth meeting of the Saarc Commerce Ministers in Islamabad met his Pakistani counterpart on November 23 to discuss issues concerning bilateral trade. Both commerce ministers decided to initiate talks on bilateral FTA and to develop a new trading route by land from Nepal to Pakistan. It was agreed that a Joint committee at the working level would be set up to complete the study within six months.
The sources further said that during the visit of Prime Minister to China a protocol was signed on the issues of Preferential Trade Arrangement (PTA) and Free Trade Agreement (FTA) between the two countries.
Both sides unanimously agreed that the concessions given by China on the conclusion of the third round of negotiations under Bangkok agreement would be applicable to Pakistan and Islamabad would also correspondingly offer concessions to Beijing.
The protocol also provides for the joint study group for accelerating talks to sign FTA within six months. The said study would also include an early harvest programme on items of specific interest to both the countries. The rules of origin for this programme would also be finalised simultaneously.
The sources said that Malaysia is one of South East Asia's booming economies with total annual exports of $98.4 billion and imports of $74.4 billion during year 2003. The bilateral trade between Malaysia and Pakistan stood at $686.84 million. Pakistan's exports to Malaysia were $83.48 million while imports amounted to $603.10 million during 2003-04. The balance of trade is in favour of Malaysia.
With a view to increasing Pakistan's exports to Malaysia, concessionary measures at the policy planning-level were required to be taken to make buying from Pakistan more attractive for Malaysian businessmen.
It was with this backdrop that during the Pakistan-Malaysia 3rd Joint Ministerial Commission meeting held at Kuala Lumpur from 25-26 October, 2004, the Pakistan side had proposed to initiate consultations on a PTA leading to FTA.
The Malaysian side supported the proposal to establish PTA between the two countries, which according to the former would help boost trade.
The sources said that the federal cabinet, meeting on Wednesday under the chairmanship of Prime Minister Shaukat Aziz, would approve the proposals submitted by the Commerce Ministry.