The Cabinet decision of capping yarn export to a maximum of 50,000 million kgs per month could be challenged at WTO as it is against the world trade body's rules. It is the first big move of restricting the yarn export volume since 1986, said Federal Commerce Secretary Zafar Mehmood during a meeting with value-added textile manufacturers and exporters at PHMA House on Friday.
He warned that the capping on yarn export might not remain for more than six months, even if not challenged at WTO forum. He said the government has taken the decision only to underpin the ailing value-added textile industry for the time being so that it could compete in the global markets. "It may be a temporary restriction and the government's check on yarn export will be for six months," he said.
However, value-added textile manufacturers-cum-exporters told Business Recorder after the meeting that they want the government to impose restrictions on yarn export to a maximum of 40,000 million kgs per month. About the market access, Zafar said the government is making efforts to ratify the remaining two conventions on torture of trade concession in the EU markets.
He said that Pakistan will leave no stone unturned in getting the GSP Plus status and the government is ready to make changes in the domestic laws in line with what the EU conventions on torture demand. While the second factor hindering Pakistan from getting the GSP Plus status, he said, was the country's annual exports to the EU is 1.48 percent which should be in any case below one percent of the total imports of the union to receive trade concessions.
He said there is also a plan which the government is considering to request the EU for changing the criterion of one percent export into two percent, but one should understand that it will also cover many other countries like Egypt. A meeting of the commerce ministry, the law ministry, rights organisations and relevant stakeholders is taking place under the supervision of federal law minister Babar Awan to evolve a draft to match the convention requirements before sending it to the Cabinet in February this year for approval, Zafar said.
He said France could be made a threshold for changing the criterion into two percent if it is told that Pakistan is ready to rectify these remaining conventions for trade concessions. He said the government is also considering a new legal arrangement for trade concession in the global markets, as the country's terrible law and order situation, shaky infrastructure consume huge revenue while foreign buyers are reluctant to visit Pakistan for negative travel advisories.
He said there are 17 tangible and intangible factors which hinder the country's export growth and the government is planning to get a thorough study to reduce them to minimum numbers. The LUMS will be assigned for this purpose. The EU and the US have agreed to hold talks on FTAs unlike the past, he said, adding that the government will negotiate with them in February this year.
However, Pakistan's chances are low for entering FTAs with them for its weak negotiating capacity as the country lacks an expert negotiator, he added. About the ROZs, he said although he himself not fully convinced whether such zones will come into being, the US Congress has recently passed a bill which is now in the Senate for becoming an Act to finally construct them in the country.
He pointed out that the US legislators are reviewing the Pakistani labour laws, keenly. Earlier, chief co-ordinator of Pakistan Hosiery Manufacturers Association (PHMA), Muhammad Javed Bilwani gave a presentation on the state of value-added textile sector and highlighted a number of problems. While Zonal chairman of PHMA, Akhtar Yunus and senior vice chairman Rauf Patel, former chairman Naqi Bari and other members were also present on the occasion.
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