The trade between Sri Lanka and Pakistan could expand to over US$ 1 billion with collective effort, the officials from both countries agreed today at a meeting between the High Commissioner of Pakistan Ms. Seema Ilahi Baloch and the Chairman of the Sri Lanka Export Development Board (EDB) Janaka Ratnayake.

Addressing a joint press conference with the High Commissioner Monday at the Export Development Board (EDB), Ratnayake said the EDB is "quite willing to join hands" with the High Commission of Pakistan in Colombo to expand volume of trade between the two countries and to strengthen the commercial ties for mutual benefit.

He pointed out that Sri Lanka considers Pakistan as a true friend who stood with the people of Sri Lanka during the difficult times and the two countries enjoy a strong and long standing bilateral multi-faceted relationship, including economic cooperation.

Reminding that the EDB had to cancel Sri Lanka's participation at the Expo Pakistan Exhibition at the last moment due to the concerns of the private sector, the Chairman said it is Sri Lanka's duty and the responsibility to work with the friendly neighbour at this moment to develop trade and provide opportunities for the business communities of both the countries to forge new trade relationships with each other.

According to a statement from the High commission of Pakistan in Colombo, Pakistan is the second largest trading partner for Sri Lanka in the SAARC region. It was the 26th export destination for Sri Lanka in 2010 accounting for nearly 0.7% of total exports in value terms while it has been the 10th largest import origin contributing to over 2% of total imports in to Sri Lanka in the same year.

However, there is untapped, vast potential for enhancing trade for both the countries to explore using the tariff concessions available under the Pakistan Sri Lanka Free Trade Agreement, Ratnayake pointed out.

"Despite the concessions available under the FTA, Sri Lanka's exports to Pakistan accounted for less than 1% of total exports of the country," he noted.

Trade between the two countries had grown recently with total trade between the two countries rising 4.5 % on average to US$ 345 million in October 2011 from US$ 169 million in 2005.

Sri Lanka exports to Pakistan in 2010 include sheet rubber, betel leaves, other natural rubber, coconut fresh nuts, desiccated coconut, crepe rubber, pepper, woven fabrics, lentils, and tea in bulk.

The EDB plans to carry out a series of promotional activities in Pakistan and Sri Lanka in collaboration with the High Commission of Pakistan in Sri Lanka for next year, the Chairman revealed.

Among the planned activities are, seminars to create awareness, mini exhibition for women entrepreneurs from the two countries, single country exhibitions and trade fair participation.

Sri Lanka could also look into the new opportunities that will arise from the Free Trade Agreement Pakistan has with China, he said.

The High Commissioner of Pakistan, expressing satisfaction on the increase in volume of bilateral trade since the signing of Pakistan Sri Lanka FTA on 13th June 2005, noted that there was huge untapped potential in trade, and with collective effort, the trade volume could exceed US$ 1 billion.

She added that necessary institutional infrastructure in shape of the FTA on goods, Bilateral Investment Treaty, and MoU on Customs Cooperation is in place.

"The framework can be strengthened by negotiating and concluding Services and Investment chapters of the FTA," she said.

The EDB has organized Sri Lanka's participation at the My Karachi International Exhibition consecutively for four year since 2007 paving the way for Sri Lankan exporters to enter and expand in the Pakistan market.

The High Commissioner invited Sri Lankan investors to visit Pakistan and explore the countless potential of the country, including geo-strategic location, trained workforce, abundant raw materials, infrastructure, and investor-friendly policies.

"Pakistan was especially looking forward towards investments in energy sector," Ms. Baloch said.

Recognizing the apprehensions of the Sri Lankan businessmen towards perceived security environment of Pakistan, she said that incidents of terrorism were confined to isolated areas and urban centers were safe and secure for doing business.

"Conflicts such as these do not prevent business and investments from flourishing. Sri Lanka itself is a very good example," she pointed out.

She expressed hope that the newly announced commodity tax in Sri Lanka's Budget this year would not impact the trade of commodities between Pakistan and Sri Lanka.

She also highlighted that Pakistani agricultural products provide a cheaper and higher quality alternative to Sri Lankan imports from far-away countries like Australia and South America and stressed that the imports would compete with local farm products and add to the diversity to the advantage of consumers.

The EDB has taken efforts to promote value added products to Pakistan Market through this event. Some of these products include packeted tea, confectionery products, herbal healthcare products, Ayurveda products, Wood based modular furniture, rubber products, Gems and Jewellery, and Porcelain Tableware, etc..

Both the High Commissioner and the Chairman expressed their firm resolve to work together to enhance the economic ties, especially trade between the two countries, for mutual benefit.