"In order to create stability and secure market access for businesses in our border regions, the government of Pakistan is in discussion with the US government for special trade incentives," Minister for Foreign Affairs Kurshid M Kasuri informed business community of Tuesday.
Addressing members of Karachi Chamber of Commerce and Industry (KCCI), he said that these special trade incentives would create economic activity and generate jobs, thereby strengthening regional security. He recalled that during the US President's visit to Pakistan in 2006, he had announced a 'Reconstruction Opportunity Zones' programme (ROZ), especially designed for border regions in Pakistan.
Products of these Reconstruction Opportunity Zones would qualify for duty-free entry into the United State. Pakistan and the US government are in consultation on the modalities of this programme. It is expected that ROZs would cover a large number of tariff lines including a number of textile and apparel categories.
He said that continuous efforts were underway to improve bilateral market access to the European Union (EU). Pakistan now has an institutional mechanism, the sub-group on trade under the aegis of the Pakistan-EU Joint Commission set up under the Third Generation Co-operation Agreement in May 2007.
Regarding market access, he said that Pakistan's 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 major markets.
Pakistan is closely monitoring the WTO process. Pakistan on its part remains committed to the success of multilateral trade negotiations under WTO. But in view of the unpredictable fate of the multilateral trading system, like other developing countries, Pakistan is concerned about the quality of future trading environment.
The minister said that Pakistan has adopted a proactive approach to convert the challenges of globalisation into opportunities. One of the important initiatives in this regard is to seek membership of as many regional trading arrangements as economically and politically viable.
Kasuri said that Pakistan is negotiating a Trade Preferential System under the aegis of Organisation of Islamic Conference and had signed the D-8 Preferential Trade Agreement.
He said that beside this, efforts are ongoing for Free Trade Agreement (FTA) with the Gulf Co-operation Council (GCC). A Preferential Trade Agreement (PTA) is being signed with Mauritius. Another FTA with the Mercosur countries, including Argentina, Brazil, Venezuela, Paraguay and Uruguay and Russia, are also being worked on.
He said that a historic full-fledged FTA with China is now effective. The FTA has opened the doors to a huge and friendly market for Pakistan and created enormous opportunities for foreign direct investment (FAT) in the manufacturing sector in Pakistan. The Pakistan-Sri Lanka FTA is operational since June 2005 and is also yielding encouraging benefits as export f both countries have increased.
The Asean countries have the most successful FTA in Asia. In order to gain a foothold in the Asean region, Pakistan is working on a two-pronged strategy. The first is to have bilateral FTAs with major countries of the Asean, like Indonesia, Singapore, Malaysia and Thailand, and second is to negotiate a bilateral agreement with the entire association on a 10+1 basis (ie one non-member with the ten members). He said that FTA negotiation with Malaysia has been successfully concluded, and the agreement is expected to be signed this year. Negotiations with Singapore and Indonesia are also on advance stage.
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