Pakistan's New Trade Policy Unveiled; Exports Target US$ 19.2Bln
'Pakistan Times' Business & Commerce Desk

ISLAMABAD: Commerce Minister Humayun Akhtar Khan on Wednesday unveiled Trade Policy for fiscal year 2007-08, with exports targeted set at US$ 19.2 billion and introducing new initiatives aimed at further strengthening the exports regime.

He said, “Last year we had set an export target of $ 18.6 billion, which acknowledged services sector, exports for 11 months of the year 2006-07, at US $ 3.1 billion while the defence exports for the full year were US $ 63 million”.

This is the first time in the history of Pakistan that merchandise exports have crossed the barrier of US $ 17 billion, the Commerce Minister said while announcing the new trade policy on radio and television today.

He said the government has diligently followed the guidelines set out in the reforms agenda and has been carrying out its assigned role of increasing the country’s exports.

As a result, he said, the past seven years have witnessed unprecedented increase in merchandise exports, which have grown by almost 112% from US$7.8 billion in 1998-1999 to US$16.5 billion in 2005-06.

Humayun Akhtar said “although our export performance has not kept pace with the overall robust growth of the economy and though the challenges I have enunciated above are daunting, yet these are not insurmountable as the current global trading environment under the WTO is rapidly transforming the world into an integrated single market with most countries bringing down tariff walls and eliminating or reducing non-tariff measures”.

He said the global tariff reductions by most countries have spawned exciting opportunities and “our best opportunity for market access” lies in the success of the current WTO Doha Round of negotiations.

A successful conclusion will bring down tariffs especially on non-agriculture products, and mitigate to a large extent the adverse impact of preferential tariff concessions enjoyed by Pakistan’s competitors in our major markets, he added.

Commerce Minister said our imports have increased considerably so that there is no cause for alarm due to trade deficit, adding, growing economies do need to import as there is a strong correlation between higher imports and GDP growth.

Over the past five years (2003-2007), Pakistan’s economy has grown at an average rate of 7%, so that higher investments have led to higher imports of machinery and raw materials, he added.

Although the prices of petroleum products have remained high in world markets, he added, higher volumes of oil imports are required for the transport sector and for power generation.

Special Export Zone

Minister for Commerce, Humayun Akhtar Khan said on Wednesday a Special Export Zone is being set up at Karachi called the Textile City that is owned and operated as a corporate entity, in which GOP, multilateral institutions and stakeholders are equity partners.

Announcing a Trade Policy 2007-08 here, the minister said this zone would have modern infrastructure like water supply, sewerage, self power generation and effluent treatment plants.

It zone will be focusing on the textile sector particularly on dyeing, processing and finishing.

The Sundar estate Lahore and Faisalabad M3 value added city are following the same concept.

However, Garment Cities are being set up at Lahore, Faisalabad and Karachi, to be owned and operated as corporate entities, in which multilateral institutions and stakeholders are equity partners. These cities are for value added finished textile products.

Textiles

Hamayun Akhtar Khan said that first 11 months of 2006-07 fiscal year witnessed 6 per cent increase in exports of textiles group.

Announcing the Trade Policy 2007-08, he said within the textile group, exports of some products have almost doubled in the period.

He said among these art silk & synthetic textiles have grown by 122 per cent, tents and canvas by 99 per cent, and yarn other than cotton yarn by 82.7 per cent.

This shows that our product base within textiles is diversifying from the traditional cotton base, he said and added exports of other textiles products that have continued to grow, during the same period are knitwear and readymade garments, increasing by 12.9 per cent and 5.4 per cent respectively.

Proactive Roadmap

Commerce Minister said here that the Government has embarked on a proactive preferential trade negotiating roadmap to counter fallouts the Pakistani exporters have been facing.

Announcing the Trade Policy 2008, the minister said that over the past few years a proliferation of Preferential Trading Arrangements had been witnessed in the form of Regional Trading Arrangements (RTAs), Bilateral Free Trade Agreements (FTAs) and Unilateral GSP type programmes, adding that many such arrangements placed Pakistani exporters at a disadvantage as compared to their competitors.

Following the negotiating roadmap, Pakistan finalized some major agreements while many others were close to finalization, adding that Pakistan has been successful in securing market access and creating economic linkages with China and a number of other countries in East and South Asia.

He said that Pakistan was working on a two-pronged strategy to gain a foothold in this huge market, adding that the first was to have bilateral FTAs with major countries of the ASEAN like Indonesia, Singapore, Malaysia and Thailand and the second is to negotiate a bilateral agreement with the entire association on a 10+1 basis (one Non Member with the ten Members).

He said that FTA negotiations with Malaysia have been successfully concluded, and the agreement will enforced within this year and added that negotiations with Singapore were on track to complete them by end of this year.

Besides, he said, The South Asian Free Trade Area Agreement (SAFTA) was operative since 1st July 2006, adding that the Pakistan-Sri Lanka FTA was also yielding encouraging benefits as exports of both countries have increased. He said that Pakistan was now pursuing PTA negotiations with Russia.

He said that Pakistan-EU Joint Commission has also been set-up under the 3rd Generation Cooperation Agreement in May 2007 adding that efforts to improve bilateral market access to EU was also under way.

He said that government was also in discussions with United States for special trade initiatives to create stability and secure market access for business in the border regions.

Farmers, Ginners Training

Minister for Commerce, Hamayun Akhtar Khan on Wednesday said an institute is being established with funding from the Export Development Fund for training farmers and ginners in production of contamination free cotton.

Announcing the Trade Policy 2007-08, he said quality control standards are being developed for cotton and a research centre is being established at Rahim Yar Khan for development of quality cotton.

He said Trading Corporation of Pakistan (TCP), which works under the Ministry of Commerce continues to intervene and procure contamination free cotton at a premium.

Mountaineers Facilitated

Mountaineering expeditions coming to Pakistan have been allowed to import their equipment and material on import-cum-export basis without having to approach the Ministry of Commerce.

Minister for Commerce Humayun Akhtar announced in the Trade Policy 2007-08 that if the expeditions decide not to take the equipment back to their countries, they can donate it to a local club.

Presently all the mountaineering expeditions have to approach the ministry for permission to import their equipment and materials on temporary basis.

“In case, the equipment and material are not re-exported, they can now donate such equipment and materials to local mountaineering clubs and produce certificate that the equipment and material imported on import-cum-export basis has been donated to that club,” Humayun Akhtar said.

School of Fashion Design

Hamayun Akhtar Khan said a purpose built campus of Pakistan School of Fashion Design (PSFD) is under construction at Lahore to accommodate the existing faculties as well as incorporate additional disciplines.

Announcing the Trade Policy 2007-08 here, he said the additional disciplines include gems and jewellery design department, furniture design department and leather & accessories design department.

He said the school is preparing the national industry to compete successfully in the growing international fashion market.

Hamayun Akhtar said a second portion of the school which will prepare our work force to convert the designs into finished products in manufacturing is on the drawing board.

These classes will emphasize manufacturing expertise and will commence within this financial year. The curriculum being offered at the school in Lahore will be offered at the Karachi and Islamabad chapters of the school, to be set-up within the period of this trade policy.

This school is the premier fashion design school of the country, set up by the Ministry of Commerce. It commenced fashion design classes and fashion merchandising and marketing classes in collaboration with French Fashion design institutes.●