KUALA LUMPUR: Malaysia and Pakistan last Thursday signed a trade pact, Malaysia's first bilateral free trade agreement (FTA) with a member of the Organisation of Islamic Conference (OIC).
Datuk Seri Rafidah Aziz The Malaysia-Pakistan Closer Economic Partnership (MPCEPA) was signed by International Trade and Industry Minister Datuk Seri Rafidah Aziz and High Commissioner of Pakistan Tahir Mahmood Qazi.
The agreement will come into force Jan 1, a statement from the Ministry of International Trade and Industry said.
Both countries concluded talks in October 2005. They began implementing in January last year an Early Harvest Programme (EHP) for trade in goods comprising Malaysia's offer of tariff cuts on 140 tariff lines and Pakistan's offer of tariff cuts on 124 tariff lines.
This was to accelerate trade benefits ahead of the MPCEPA.
Malaysia's export of EHP products in 2006 to Pakistan totalled RM44.87mil.
Malaysia and Pakistan will progressively reduce or eliminate tariffs on agricultural and industrial products.
Malaysia will eliminate import duty by 2012 on 74.5% of tariff lines comprising 77.3% of imports from Pakistan with a value of RM152.7mil in 2006.
It will also reduce import tariffs over five to seven years on 18% of tariff lines with a value of RM5.95mil in 2006.
In turn, Pakistan will eliminate duties by 2012, on 43.2% of tariff lines involving agricultural and industrial imports from Malaysia worth RM633.7mil in 2006.
Pakistan will also reduce import duty on seven palm oil tariff lines by up to 15% Margin of Preference with 10% cut in 2008 and an additional 5% in 2010 involving 48.8% of exports with a value of RM1.3bil in 2006 and 41.3% tariff lines, over five to seven years comprising imports with a value of RM489mil in 2006.
Last year, Malaysia's total trade with Pakistan amounted to RM3.306bil comprising exports worth RM3.089bil and imports RM217mil.
Trade from January to September 2007 amounted to RM3.243bil comprising exports of RM3.016bil and imports RM227.3mil. – Bernama