KCCI Trade Policy proposals: government urged to drive away barriers against exports

The Karachi Chamber of Commerce and Industry has suggested that the government, through its commercial officers and representatives at the WTO, must make vigorous efforts to drive away barriers against Pakistan's exports, anti-dumping duty and other protective measures taken by trading partners.
Vice President Muhammad Haroon Agar presented the chamber's suggestions for Trade Policy 2008-09 to Commerce Minister Shahid Khaqan Abbasi in Islamabad on Monday. The chamber noted that many countries in Africa have raised tariff and non-tariff barriers against Pakistan's export. This is against WTO guidelines, it added.
Haroon Agar pointed out that Egypt for matches, Nigeria on matchboxes, South Africa for textile, Rwanda for matchboxes, Democratic Republic of Congo on pharmaceuticals and European Union (EU) for home textiles have raised tariff and non-tariff barriers against Pakistan. The KCCI recommended that instead of a positive list of items importable from India, a negative list of items that cannot be imported from India, should be maintained.
The negative list as suggested by KCCI includes garments (block printing and vegetable dying), ladies shalwar suits of silk (manmade fibers), sarees of Silk (manmade fiber), ladies shalwar suits of cotton, ladies shalwar suits including chikan work, Kashmiri embroidered garments, casual garment of cotton, garments of manmade fiber, garment of silk, artificial jewellery, kundan jewellery, silver jewellery, polki jewellery, diamond studded 18-k gold jewellery, diamonds jewellery, polished diamond jewellery, perfumes, cosmetics, stainless steel and silverware.
Regarding pharmaceutical sector, KCCI pointed out that high import duties and taxes on quality control lab equipment (5 percent to 25 percent import duty and 15 percent sales tax) rendered Pakistani products uncompetitive in price sensitive export territories. Moreover, the export rebate currently being offered is insufficient. Pharmaceutical products are exempted from sales tax, therefore, the government should abolish sales tax on all pharmaceutical packaging materials, pharmaceutical quality control as well as sales tax after protective duties granted for the Active Pharmaceutical Ingredients (APIs) to make the products competitive in export territories. Sales tax exemption certificate should also be granted to pharmaceutical manufacturers in this regard.
The KCCI suggested that either the import and other protective duties, territorial restrictions on all packaging materials, pharmaceutical production and quality control machinery should be brought down to zero or the prevailing export rebate be increased to 13 percent as is the prevalent practice in most of the competitor countries eg China.
The chamber pointed out that in Pakistan most of the chemicals used by leather industry are imported on a duty of 5-20 percent. This duty is then refunded to exporters in the shape of duty drawback, which is 1.64 percent of the value of the goods. Owing to this duty structure, a huge amount of finance is blocked. The KCCI suggested that the duty as well as rebate on all imported chemicals being used in leather industry be brought to zero level.
The chamber noted that the customs laws of Pakistan do not permit electronic imports of software, and in case of physical imports, the freight and other related charges multiply on the software importing companies resulting in loss of foreign exchange to the government.
In order to maintain pace with the rest of the world mechanism for "electronic imports" especially for "software" must be developed where import duty and other taxes can be ascertained without passing through any entry port.
The chamber pointed out that presently the custom duty on waste paper and paper board of all sorts is 20 percent whereas existing duty on standard paper is also 20 percent. In foreign countries waste paper is treated as scrap. The chamber suggested that there should be duty difference between standard paper and waste paper while custom duty on paper waste be brought down to 10 percent.