The Fourth round of talks to finalize the draft of free trade agreement (FTA) between Pakistan and Thailand will take place in the second week of September in Islamabad, said a senior official in the Ministry of Commerce. The two sides have agreed to sign the FTA after a detailed assessment of the markets in both the countries.

This time, the meeting will be followed by consultations with the business community for finalizing the list of commodities and the timeframe for tariff cut.

At present, the value of bilateral trade is about $1 billion, 85% of which is in favour of Thailand. The two sides want to double the existing figure within three years of signing the FTA.

Pakistan and Thailand developed consensus on inking the FTA because the former wanted to gain access to markets of the Association of Southeast Asian Nations (Asean). On the other hand, Thailand wants to enhance trade with South Asian states as well as with the Central Asian nations. Pakistan is already its second largest trading partner after India in the region.

The two countries have set up working groups for trade in goods, rules of origin, legal and institutional issues, customs procedures and trade facilitation, technical barriers to trade, sanitary and photo-sanitary measures and trade remedies. The agreement will also eliminate both tariff and non-tariff barriers and increase investment opportunities for both countries.

Pakistan has already inked FTA with Malaysia, which has been operational since 2008 and preferential trade agreement with Indonesia, which has been working since September 2013.

Both the countries will sign the FTA by the end of this year, the ambassador of Thailand had stated earlier in Lahore.

However, sources in the Ministry of Commerce said that it is unlikely that FTA negotiations will reach a conclusion this year. Most probably, it will materialise by May next year.

The Ministry of Commerce believes that in addition to the textile and clothing sector, agriculture and food group products can also be easily exported to the Asean region under the FTA with Thailand.

Besides, there is also potential for export of hospitality-related goods, leather goods, light machinery, sports goods, surgical goods, vegetables, fish and marine food. Major import products from Thailand include electronics, machinery, chemical goods, fabrics, vehicles and parts, air conditioners and parts, and plastics.