Malaysia and Pakistan on Saturday agreed to remove tariffs on scores of products they trade with each other including fish, fabric, fruit and machines as the first step toward a planned free trade agreement. The two countries exchanged a list of 239 products that will benefit from the agreement, most of which will be traded with no tariffs. The duties on others will be reduced to 5 percent. The so-called Early Harvest Program was signed by Malaysia's trade minister Rafidah Aziz and Pakistan's investment minister Abdul Hafeez Shaikh, in the presence of the prime ministers of the two countries. Pakistan Prime Minister Shaukat Aziz is in Malaysia to attend an Islamic economic forum. A Malaysian government statement said the Early Harvest Program, which comes into affect Jan. 1, 2006, will provide "an impetus for an early conclusion" to the negotiations for the bilateral free trade agreement, or FTA. The program will expire once the FTA comes into force or on March 31, 2007, whichever is earlier. However the aim is to conclude the FTA by mid-2006. Pakistan will extend the benefits on 125 Malaysia products, covering 5.49 percent of imports by value. The items include machinery, mechanical equipment, plastic products, chemical products, rubber, timber products and live and ornamental fish. Malaysia will waive or reduce duties on 114 Pakistani items, which account for 10.97 percent of its total imports from Pakistan by value, and include textile, clothing, agricultural products, jewelry, citrus and dried fruit. In 2004, total trade between Malaysia and Pakistan was worth 2.87 billion ringgit (US$761million; ¤634 million), heavily in favor of Malaysia. Its exports to Pakistan were valued at 2.66 billion ringgit (US$705 million; ¤587 million) while imports from Pakistan amounted to 206 million ringgit (US$54.6 million; ¤45.5 million). Malaysia's major export to Pakistan are palm oil, margarine and telecommunication equipment. Pakistan's main exports to Malaysia are fresh, chilled and frozen fish, rice, textile yarn, fabrics and woven cotton fabrics, according to a report of The Associated Press.
