Absence of facilities makes proposed ROZs imperfect

Exclusion of critical products from this duty-free eligibility, high cost and long shipment hours to US market and absence of higher levels of infrastructure and security are making proposed Reconstruction Opportunity Zones (ROZs) in Federally Administered Tribal Areas (FATA) full of flaws.
Expressing deep concerns over these flaws, textile circles feared that these tangible flaws would fail the US plans to help build Pakistan's domestic industry, create employment opportunities, and provide sustainable development. Further, it would also demonstrate to Pakistanis that the US is not serious about its long-term engagement with Pakistan and the region, added these circles.
It may be noted that the current legislation pending before Congress seeks to create trade preference zones in Pakistan's conflict ridden and destitute Federally Administrated Tribal Areas (FATA) to ensure jobs and long-term prosperity in a region widely regarded as an al Qa`ida safe haven. It is a noble idea, but is flawed for three critical reasons.
Textile circles pointed out that despite that fact that the ROZs relating bill aims to spur textile and apparel production in FATA, it excludes critical products from this duty-free eligibility, namely cotton knit tops and cotton trousers. These products, they said, make up 25 percent of the total value of US imports from Pakistan. Exclusion of these products is an obvious disincentive for new investment in apparel in Pakistan's border regions, they added.
Secondly, they said, a quick turnaround time on orders and not lower cost enables Pakistan to compete against regional competitors like China and India in the US market. A geographically isolated area like FATA with long distance from ports and the cotton producing regions of Pakistan with weak transportation links would cost more and take longer to reach the US market, eliminating Pakistan's comparative advantage.
Also, added textile sources, prospects for a successful ROZ are limited given that the FATA region remains embroiled in conflict and any further expenditure in the region would strain an already fragile government budget. Meanwhile, the textile circles are also advocating that no benefit can be accrued unless a reduction to the US tariff on textile exports from ROZs is put in place. According to these circles, abolition of current 8.1 percent average tariff on towels, sheets, comforters and curtains is a must to benefit from proposed ROZs.