Ministry of Industries (MoI) allegedly under pressure from Planning Commission and Ministry of Commerce has reopened negotiations with the auto sector on a five-year roadmap for the industry, sources close to CEO EDB told Business Recorder.
A meeting convened on Tuesday at the MoI was attended by the representatives of all major sectors including Munir K Bana, Chairman and Usman Vice Chairman of PAAPAM represented the vending arm of the industry, with the OEMs represented by Pervaiz Ghias, Chairman, Abdul Waheed Khan DG PAMA.
Chairman Indus Motor Company Ali Habib also attended the meeting. The meeting chaired by Shafqat Naghmi, Secretary Industries was attended by Kazi Ebadullah, CEO EDB and official of Ministry of Commerce. Dr Manzoor, former ambassador to WTO, also made a presentation. In their presentations, the representatives of the industry compared economies of different and comparable sizes and discussed their auto policies with special emphasis on tariffs. Citing examples of India, Malaysia and other regional countries the industry argued that every country protects its industry.
Ghias of PAMA mainly spoke about the negative impact of frequent policy changes on the industry. PAAPAM's presentation made by Aamir Allah Wala focused on contribution of vending industry to the growth of auto sector in Pakistan. The value addition by the sector through quality manufacturing was emphasised by him. He also pleaded the case for a consistent policy for the industry.
"Pakistan industry will continue to lose volumes if tariffs are not brought down," emphasised Dr Manzoor. He cited the examples of India, the Philippines, Thailand and Malaysia and said that each country had dismantled the high tariff walls and welcomed competition in the last ten years.
To this, Ali Habib responded that "Malaysia and India have very high tariffs and we have documents to prove it." He disputed the veracity of figures presented by Dr Manzoor. The debate became quite interesting when Dr Manzoor insisted that Malaysian and Indian tariffs were available on the net. Ali Habib responded that local auto sector had SROs from India and a feasibility from Malaysia to prove that tariffs were not what were being quoted by Dr Manzoor.
The examples of Argentina, Brazil trade pact and that of NAFTA agreement between Mexico, Canada and the US were termed most irrelevant for the industry in Pakistan. "The size of the economies and the stages of development of industry have nothing in common with Pakistan," the sources quoted Munir Bana as insisting. The presentation by Dr Manzoor reportedly totally discounted the impact of NTBs on Pakistani exports while discussing trade with India.
A Millat Tractors representative said that his company had been trying to export tractors to India and facing one barrier after another and it had not been able to export. Indus Motors also shared their experience of problems while trying to export their product. The negotiations with different sectors of the industry will continue next week, especially on tariffs.
However, the industry was visibly disturbed on the thrust of the tariff plan which proposed reduction of CBU rate on the assertion that a lower CBU will improve investment in the country. This logic was completely lost on those present. Increasing duty on non-localised CKD for tractors to 5% which is presently at 0% was another thing that perturbed the industry. Above all, the proposal that the additional duty on import of localized parts should be abolished was most disturbing for the industry. "The industry was at a loss to understand the theme of this new proposal," the sources said.
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