Commerce Ministry is reported to have started consultations with provincial governments to finalise the locations for the much talked about Reconstruction Opportunity Zones (RoZs), to be established in NWFP and Balochistan, bordering Afghanistan, official sources told Business Recorder.
"Pakistan will propose sites for locating RoZs by July 1, 2009, as the Obama Administration has promised to work with Congress to seek early enactment of legislation," sources said.
They said that at a tripartite meeting recently held in Washington, US Deputy Secretary Lew referred to President Obama's endorsement of the program and US Administration's hope of getting the pending legislation enacted by Congress at an early date. He also referred to the urgent need for completing the work that has to precede the implementation of the program. Michael J Delaney, Assistant United States Trade Representative (USTR), reaffirmed that the program would prove an effective instrument for creating economic opportunities in areas seriously impacted by protracted conflict and instability.
He emphasised the need for developing a credible labour rights monitoring system that would address the concerns of Congress on the issue. He suggested development of an institutional framework in which local indigenous organisations, outside the ambit of the government, could work along with ILO to monitor enforcement of labour standards specified in the draft legislation, sources added.
According to sources, Commerce Secretary Suleman Ghani, who represented Commerce Ministry, appreciated the early re-introduction of the draft legislation in the US Congress and expressed hope that the bill would be enacted at an early date this year. To maximise the strategic impact of the program, he suggested that additional textile tariff lines be added to the scope of the legislation.
He also proposed that areas in Pakistan, qualified for establishing ROZs under the legislation, be extended so as to include the entire province of Balochistan.
Speaking of the difficult economic and security situation that confronts Pakistan, Suleman emphasised the need for immediate steps to grant greater preferential market access to Pakistan's textile products.
He suggested that a special dispensation be made under the US GSP program for providing additional market access to states seriously impacted by terrorism. He also mentioned the decision during the recently concluded TIFA meeting in Washington to establish a Joint Study Group (JSG), which initially would focus on completing preparatory work for implementation of the ROZs program. The JSG would be convened immediately to develop comprehensive plans for combating illegal transshipment, finalising customs procedures and labour rights monitoring mechanisms.
According to sources, Pakistan has already commissioned a study which, in 6 weeks' time, is expected to propose a regulatory framework for the implementation of the program. After completing stakeholder consultations by middle of June 2009, the government plans to modify existing regulations and enact laws that may be required to bring the regulatory framework in compliance with the requirements stipulated by the ROZ legislation. A separate stakeholders' dialogue is also being initiated, which includes consultations with the concerned provincial governments in an effort to finalise Pakistan's proposals on location of the ROZs. The government hopes to complete this process by the end of June 2009 and the proposals developed through this process would be shared with the US government, sources added.
They said that Afghanistan Foreign Minister stated that the potential of ROZs, as a catalyst for promoting economic growth in the country, is well understood. Economic feasibility studies have already been completed and the initial locations of ROZs in Afghanistan have been identified. Afghanistan, however, will require additional US assistance in developing missing infrastructure, critical to the success of the program.
According to him, Afghanistan would also need substantial assistance in trade capacity building, which would help the country in developing the regulatory framework necessary to address concerns on customs procedures, illegal transshipment and protection of core labour rights.
After detailed discussion, the participants agreed that: (i) US administration will work with Congress to seek early enactment of the ROZ legislation; (ii) all sides will work very closely to develop customs harmonisation procedures, labour rights enforcement mechanisms and regulations against illegal transshipment. US will provide technical assistance through existing institutional arrangements such as the US-Pakistan Joint Study Group; (iii) Pakistan will propose sites for locating ROZs by July 1, 2009; (iv) Pakistan will propose, by June 15, 2009, the language for including additional textile tariff lines to the scope of the legislation and extending geographical limits of ROZ-qualified areas in the country to other regions in Balochistan, and (v) US will promote private sector investment in ROZs and share information on the initiative with Afghanistan and Pakistan by July 1, 2009.
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