Pakistan's federal cabinet has approved a Free Trade Agreement (FTA) with Malaysia to be functional from January 2008.

The deal will be its third such pact, having already tied up deals with Sri Lanka and China.

Under the FTA Malaysia will eliminate tariffs on about 80% of Pakistan's existing imports into the country, up from the current 23%.

Pakistan will gain market access for core textile and apparel products like cotton yarn, textiles, bed linen, home textiles, jewellery, and leather products.

It has also protected its core manufacturing industries which include footwear, leather products and synthetic textiles.

By Ahmed Abdullah.