Free Trade Agreement between Pakistan and Turkey

Describes the bilateral and multilateral trade agreements to which this country has acceded, including with the United States. Contains websites and other resources where U.S. companies can learn more about how to use these agreements. The two countries agreed last year during President Recep Tayyip Erdoğan`s visit to Islamabad to increase their bilateral trade volume to $1 billion (TL 8.54 billion) in the short term before reaching the final goal of $5 billion by 2023. Negotiations should focus on the elimination of tariffs for high-potential exports, especially those for which the exporter has a comparative advantage and the importer who does not. It should be pointed out that Turkey`s FTA partners, Egypt and Jordan, with tariffs, are significantly lower than those currently facing Pakistan; Although tariffs on Turkish exports are high, they are equivalent to those on exports from Pakistan`s FTA partners (China, Sri Lanka and Malaysia). Pakistan should also be wary of non-tariff barriers to trade. Tariff elimination alone cannot bring Pakistan`s exports to 2011 levels; these exports can be partially recovered if the trade policy remedies are part of the free trade agreement. Pakistan and Turkey are not each other`s main trading partners, but Pakistan`s trade with Turkey as a percentage of Pakistan`s world trade is higher than the other way around. "One of the most important pillars of economic cooperation between our countries is cooperation in the field of the defense industry. Especially with the intergovernmental agreements, the opening of a path before the private sector, we see that we could get a good deal in this sector in Pakistan," he noted. The decision to open negotiations on a comprehensive bilateral free trade agreement on trade in goods, services and investment was taken at the 4th meeting of the High-Level Council for Strategic Cooperation (HLSCC) in Islamabad in February 2015.

Negotiations on a free trade agreement began in Ankara in October 2015. During the negotiations, which took place in Islamabad between August 29 and 31, the two countries agreed to abolish 85 percent of the tariffs. [2] The volume of trade between Turkey and Pakistan amounted to around US$889 million in 2020, which, according to özdemir, does not reflect the current potential. This PBC study on the feasibility of the Pakistan-Turkey Free Trade Agreement (FTA) updates the previous study (2015) by examining changes made last year that may have affected the feasibility or impracticability of the proposed free trade agreement. CBP is currently a member of a working group formed by the Department of Commerce (MoC) to develop a framework for negotiating this free trade agreement. The Ministry of Health has indicated that the free trade agreement should be signed before the end of the current year. Pakistan and Turkey are not each other`s main trading partners, but Pakistan`s trade with Turkey as a percentage of Pakistan`s world trade is higher than the other way around. Pakistan`s exports to Turkey are focused on cotton, while its imports consist of machinery, electrical/electronic equipment, plastic, chemicals, basic synthetic fibers, and iron/steel. Pakistan enjoys a positive bilateral trade balance, albeit a sharp decline.

The deterioration in the surplus was offset by Turkey`s imposition of global safeguard measures on its imports of polyethylene terephthalate, cotton fabrics and ready-to-wear fabrics in 2011. In addition, Turkey imposed anti-dumping duties on Pakistani split air conditioners (2011) and synthetic staple fibre yarn (2014). The two countries have cultivated deeper socio-economic ties in recent years, with their trade volume increasing from $600 million to more than $800 million in the past five years. The free trade agreement aims to increase bilateral trade to $5 billion between 2016 and 2019 and to $10 billion by 2022. [3] [4] The free trade agreement between the two countries is expected to be signed before the end of 2016. [5] The Turkish Federation of Industry and Entrepreneurs and the Karachi Chamber of Commerce and Industry supported the free trade agreement. [6] The two leaders pledged to increase bilateral trade, which currently stands at $800 million. The minister said Pakistan is looking forward to joint ventures between Pakistani and Turkish companies. He noted that the coherent signing of a free trade agreement, expressed by the business community, would benefit bilateral trade and investment relations and pave the way for greater momentum. The Turkey-Pakistan Free Trade Agreement (also known as the Pakistan-Turkey Free Trade Agreement) is a free trade agreement between Pakistan and Turkey. [1] Pakistan and Turkey will begin negotiations in April to conclude the free trade agreement (FTA) between two countries, a Pakistani official said Friday.

Pakistan and the United States began negotiating a bilateral investment agreement (BIT) in 2004 and concluded the text in 2012, but the agreement was not signed due to reservations from Pakistani stakeholders. Pakistan has concluded bilateral investment agreements with Australia, Azerbaijan, Mauritius, Bahrain, Bangladesh, Morocco, Belarus, the Netherlands, the Belgian-Luxembourg Economic Union, Oman, the Philippines, Bosnia, Portugal, Bulgaria, Qatar, Cambodia, Romania, China, Singapore, South Korea, Denmark, Spain, Egypt, Sri Lanka, France, Sweden, Indonesia, Germany, Syria, Iran, Tajikistan, Italy, Tunisia, Japan, Turkey, Kazakhstan, Turkmenistan, Kuwait, Kyrgyzstan, Lebanon, Laos, United Arab Emirates, United Kingdom and Yemen. These investment agreements generally contain provisions on dispute settlement. If a dispute cannot be resolved through mutual consultation, investors can generally bring cases before an arbitral tribunal under the rules of the United Nations International Trade Law Commission, the International Centre for Settlement of Investment Disputes of the World Bank or the Arbitration Tribunal of the International Chamber of Commerce. Pakistan is a member of the Multilateral Investment Guarantee Agency (MIGA), a branch of the World Bank. Pakistan and the United States signed a Trade and Investment Framework Agreement (CIRA) in 2003, which provides a forum to discuss bilateral trade issues. The last TIFA intercessional meeting was held in Islamabad in May 2019. Pakistan has free trade agreements with Sri Lanka, China and Malaysia. Pakistan is also a member of the South Asian Association for Regional Cooperation (SAARC) and has concluded preferential trade agreements with Iran, Indonesia and Mauritius.The United States and Pakistan have had a bilateral tax treaty in place since 1959.

Pakistan has also concluded double taxation treaties with Austria, Canada, Indonesia, Italy, Lebanon, Mauritius, Poland, Germany, Switzerland, Turkmenistan, Kazakhstan, Belgium, China, France, Germany, Greece, Iran, Japan, Libya, Romania, Sweden, Belarus, Hungary, United Arab Emirates, United Arab Emirates, Jordan, Kenya, Kuwait, Malaysia, the Netherlands, Nigeria, Norway, Oman, the Philippines, Qatar, South Africa, Syria, Tunisia, Uzbekistan, the United Kingdom, Bangladesh, Denmark, Finland, India, Ireland, South Korea, Malta, Singapore, Sri Lanka, Thailand, Azerbaijan and Turkey. "The Turkish government sent a delegation to Pakistan last month and we agreed to improve our trade relations," said Abdul Razaq Dawood, adviser to the Pakistani prime minister on trade, textiles, industry, production and investment. The SEF comprises around 71 action points, including a free trade agreement, technology transfer, capacity building and defence cooperation. The signing of a long-awaited free trade agreement and action plan agreed by Turkey and Pakistan could boost trade volumes and help countries achieve their bilateral goal, according to business officials. The study concludes that the benefits of a bilateral free trade agreement are skewed in Turkey`s favor. Turkey`s export portfolio is better suited to Pakistan`s import needs than vice versa; Therefore, it is more likely that Turkey will see an increase in exports after the free trade agreement. Given the potential of both countries to increase their exports to each other, Turkey`s export potential is more than 2.5 times greater than Pakistan`s export potential. While Pakistan has the potential to export $5 billion to Turkey, with the greatest potential ($329 million) in the product "Instruments and Devices for Medical/Surgical/Veterinary Sciences", Turkey has the potential to export $12.8 billion to Pakistan, with the greatest potential ($346 million) in the product "Motor Vehicles and Other Motor Vehicles. Capacity<= 1,000 cm³".

Tariff and trade simulations show that if the two countries had signed a free trade agreement in 2015 that would abolish all tariffs, Turkish exports would increase by 32 percent, while Pakistani exports would increase by only 22 percent. .