ITC meeting identifies areas to strengthen public-private trade policy mechanisms

The International Trade Centre (ITC), Unctad/WTO, has planned a number of meetings to discuss public-private trade policy consultation mechanisms and to identify areas where these consultations might be strengthened in Pakistan.
The first private sector meeting was held in Lahore on November 26, 2005, and the second took place here on July 25, 2006 to share views as to how the ITC and private sector can best influence the government in protecting the interests of sub-sectors in policy formulations.
According to R Badrinath, Director, Division of Trade Support Service, ITC, the Karachi meeting was part of a series of activities taking place within the context of the EC Trade Related Technical Assistance (TRTA) programme for Pakistan. The focal point for the TRTA programme, the Commerce Ministry, recognises the importance of effective public-private consultation and is interested in seeing that these meetings take place.
Late last year, ITC conducted two studies: a national study put together a picture of the government's trade policy consultation process. The study found that much progress had been made. However, potential was identified in further improvements to the efficiency and effectiveness of the consultation process, including inclusion of academia and civil society in the process and further development of capacity to respond in a meaningful and informed way to the rapidly evolving multilateral trading environment.
The ITC also conducted an international comparative study reviewing the trade policy consultation mechanisms in a number of other countries. The review did not identify a single 'best practice' model for public-private consultation, although a number of common themes did emerge from most successful approaches to policy consultation.
Both studies, and the issues they raised, were discussed at an initial meeting in Lahore in November last year. That meeting concluded that the biggest challenge was not to increase the number of contacts between the government and stakeholders but to improve their quality, which, in itself, would help to improve the capacities of both the business and the government to understand the complex environment within which a trade policy is made.
The Karachi meeting was planned to broaden discussion of the way forward with this meeting. Badrinath says it is widely recognised that the most effective trade policy decisions and negotiations strategies are developed in a consultative process that includes government officials, parliamentarians, business groups and civil society. Such dialogue leads to trade policies that are better attuned to commercial environment, likely to be more broadly endorsed and, consequently, more sustainable.
At the Karachi meeting, the ITC consultants were of the view that they would like to make recommendations to the government for better relationship with private sector for creating ownership claim of trade policies once they are formed. They said that most of the businessmen in Pakistan complain of being ignored in accepting the suggestions at the time of formulation of policies by government, including trade policy. The consultants said that the government on the other side had reservations that the private sector does not come prepared and give inputs of quality to become input ingredients in the policy.
The participants were of the view that there were many problems and the trade policies appeared to be discriminatory in as much as they do not offer level playing field for all industrial sectors in the country. Some sectors, considered to be strong in export supports, get the best support while the weak, considered to be needing help to take share in exports as envisaged in the export diversification plan by government, are ignored.
They questioned the logic behind supporting strong sectors at the cost of weak sectors, which are ignored but, in words only, are recognised as engine of future economic growth.
Engr M A Jabbar, a former vice-president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), suggested that the Export Development Fund (EDF) should be transferred, to a reasonable level, to trade bodies for carrying out research, which could become the basis of inputs in policy formulation. He said that the bureaucracy in the Ministry of Commerce should be supported by professionals of merit who could make cross-border information movements between private sector and government as being suitable to respond to the psyche of private sector.
Captain Moiz Khan was of the view that trade policy had no place for SMEs which is the policy of influential groups with concessions of billions of rupees in the mark-up rate. This shows that it is the policy for big players who are still not satisfied.
Jabbar, who is also in-charge of WTO Resource Centre, FPCCI, commenting on the need to improve the quality of dialogue through consultation mechanism, said that it was time that efforts of the government should be shared in formulation of trade policies which are non-discriminatory. They are better tuned to the commercial environment and respond fairly to compliance of international trade laws.
He was of the view that in addition to the ongoing efforts by the ITC to improve the quality of recommendations as outcome of dialogue, there are other venues also to be improved and considered no less important for smooth sailing of any just and fair trade policy.
The strategic focus under any trade policy in Pakistan should help in diversification of exports, trade facilitation, increasing market access, enhancement of export competitiveness, developing export of services in which Pakistan has more than 50 percent share in GDP.
The ITC finds that such interactions will help them in formulating recommendations for improving the quality of consultation and to increase partnership of the government with private sector in accommodating its viewpoints which possibly could increase business in the country and exploit the raw potentials available in the country.