https://arab.news/9hexa
- Pakistan signed the trade framework agreement with a Latin American bloc in 2006 for preferential trade
- It plans to enhance textile exports to the region and secure a level playing field against its competitors
ISLAMABAD: Prime Minister Shehbaz Sharif said on Tuesday the South American market could prove beneficial to the Pakistani economy after the federal cabinet approved a trade framework agreement with a bloc comprising Argentina, Brazil, Paraguay and Uruguay, based on the commerce ministry’s recommendation.
Pakistan signed the trade framework agreement with Mercosur, also known as the Southern Common Market, in 2006 with the aim of initiating negotiations to establish a Preferential Trade Agreement (PTA). However, the two sides could not make significant progress in that direction in subsequent years or significantly enhance bilateral economic cooperation.
In early 2019, Pakistan explored the possibility of moving toward a Free Trade Agreement (FTA) with the bloc, saying it could help bridge the trade deficit with the Latin American states, but the initiative once again did not progress far.
“The federal cabinet, on the recommendation of the commerce ministry, has granted ex-post facto approval for the trade framework agreement between Mercosur (a trade bloc in South America comprising countries like Brazil, Argentina, Uruguay and Paraguay, commonly referred to as the Southern Common Market) and the Islamic Republic of Pakistan,” said an official statement issued after the cabinet meeting.
“In this regard, the prime minister said the South American market could potentially be a good market for Pakistani products,” it added. “However, the Pakistani economy has not yet been able to reap the benefits of this market.”
Pakistan plans to increase its textile and other exports to the Latin American market.
Officials have previously said that an FTA would help strengthen the country’s business and trade relations in the region and provide a level playing field against its competitors.
The federal cabinet’s approval of the trade framework agreement comes at a time when Pakistan is seeking foreign investment and exploring international markets for exports to bolster its economy.