22/2/06 ISLAMABAD (Daily Times) - The fifth round of Pakistan-Malaysia Free Trade Agreement negotiations is to be held on Feb 27-28 at Islamabad.

Both the sides have agreed to finalize the Pakistan-Malaysia Free Trade Agreement (FTA) by June this year and also to finalize the approval and ratification process of the FTA during the year 2006 for operationalizing the FTA from January 1, 2007, a senior official told the Daily Times on Tuesday.

A high-level official delegation from Malaysia is expected is to arrive here by Feb 26 to take part in the trade negotiations. The joint secretary (foreign trade) ministry of commerce will lead the Pakistan side. The secretary commerce will also attend the meeting.

Pakistan and Malaysia have already entered into an Early Harvest Programme (EHP) from January 1, 2006. Pakistan is offering duty concession ranging from 0%, 50% and 90% on the import of 126 items to Malaysia, and in return Malaysia is giving the same level of tariff concession on 114 items to Pakistan. .

This Early Harvest Programme (EHP) had been agreed between the two trading partners at a meeting held in Kuala Lumpur, where Senior Joint Secretary Ministry of Commerce Shahid Bashir represented Pakistan.

The Pakistan’s federal cabinet has already ratified the EHP between Pakistan and Malaysia for entering into free trade in the transition period till finalization of the FTA between the two sides. Both the countries have finalized the agreed item’s lists and other relevant formalities for offering tariff concessions on trade under the EHP.

The official said Pakistan and Malaysia were providing duty-free import facility to each other on 90 items, and on the remaining items duty concession ranging between 50% and to 90% was available to traders of both the countries.

Pakistan had agreed to provide tariff concession on the items that were being imported from Malaysia frequently mainly dyes, chemicals, synthetics, plastic and other raw materials under the EHP. The Malaysian side was providing tariff concession on citrus, precious stones, jewellary and textile items under the EHP, the official added.

The official said, while finalizing EHP between the two countries, both sides had also agreed to finalize the negotiations on Free Trade Agreement (FTA) by June this year and making it operational by January 1, 2007.

The trade balance between the two countries was in favour of Malaysia and the EHP would help balance trade flows between the two countries, the official said.

The trade volume between the two countries has been increasing for the past three years and a need was felt to enter into a FTA to make it more beneficial for both the countries by exempting or allowing duty concession on the items being traded.

Pakistan imports palm oil and other soft oils for preparation of cooking oil and vegetable ghee along with other items, including chemicals and raw materials.

Malaysia imports mainly textile products, sports goods, rice, fruit and vegetables.

The official was of the view that the EHP would provide a sound basis to enhance bilateral trade between the two countries in the minimum possible time, benefiting both the countries by providing equal trade opportunities.