The political environment between India and Pakistan is not conducive, hampering the trade normalisation process, said commerce ministry while briefing the Senate Standing Committee on Commerce and Textile Industry. The committee which met with Ghulam Ali in the chair here on Tuesday was also informed that Non-Discriminatory Market Access (NDMA) status to India is yet to be granted.
"The ministry of commerce is in the process of consultation with the relevant stakeholders both from public and private sectors to devise a mechanism to ensure provision of level playing field to our agriculture and industry vi-a-vis India. On the completion of this process the issue of grant of NDMA status to India would be submitted for consideration of the cabinet", Commerce ministry informed the parliamentary panel. Earlier there were 1963 items on the negative list which reduced to 1209, however only 137 items are allowed through Wagha border. The NDMA requires elimination of negative list on Pakistan's side and reduction of SAFTA sensitive list from India side, Secretary Mohammad Shehzad Arbab added.
Commerce Minister Khurram Dastgir Khan told the committee that Afghanistan has withdrawn duties including warrantee and transportation charges on Pakistan items exporting to Central Asia which would result in increasing country's export. He further said that there should be a predictable and transparent policy to enhance country export and in this regard government withdrew some SROs in the budget for 2014-15, while more SROs would be withdrawn in next budget.
The committee expressed serious reservations over the non-implementation of most parts of the trade policy (2012-15) to which the ministry informed the committee that Finance Ministry had to release Rs 15 billion for the implementation of the policy, however it failed in releasing the required amount which resulted in non-implementation of some parts of the policy.
The minister further said that EXIM bank would be established by the end of current financial year to fill the institutional deficit of a financing body for exporters. The EXIM Bank would provide export credit, credit for technological development and modernisation, and issue trade finance guarantees. The bank has been approved in the budget 2014-15 with allocation of Rs 100 billion as authorised capital with an initial paid-up capital of Rs 10 billion. In this regard a committee headed by the Governor State Bank was constituted with Secretary Finance and Secretary Commerce as its members. In order to work out modalities for setting up of the bank and suggest a way forward, a working group comprising members from State Bank, Ministry of Finance and Ministry of Commerce was constituted which undertook meetings and agreed that the bank would be established through Act of Parliament. It has also been suggested that a consultancy firm may be hired to develop business processes, EXIM products and services to be offered and a draft bill for the Bank Ministry of Finance shall act as a focal ministry of co-ordination and implementation of the initiatives, the minister added.
He further said that before the end of current financial year, three land ports including at Torkham, Chaman and Wagha borders to facilitate trade with neighbouring countries. The cabinet approved the creation of Pakistan Land Port Authority (PLPA), as a part of STPF 2012-15, with the objective of integrating the institutional and infrastructure arrangements for the processing of trade at all land borders. For the establishment of PLPA a Steering Committee headed by Minister for Finance has also been constituted. In the last meeting, FBR has been tasked to undertake necessary administrative and legal arrangement for the establishment of PLPA.
Secretary Commerce further said that on the basis of recommendations of Senate Standing Committee on Commerce, Supreme Court of Pakistan's Suo Moto and in-pursuance of Cabinet decision, draft procedure for the amendment of arms import policy is under submission for vetting before the Law Division.
All the existing authorisations have been suspended since July 1, 2014 and will be replaced by Quantity Based Authorisation (QBA), devised in the new procedure of arms import after concurrence from Law Division. On June 30, 2014 the procedure was forwarded to Law Division for vetting but same was returned un-vetted with the advice to issue procedure as an Office Memorandum (OM) by invoking Executive Authority instead of SRO. Since the procedure is not the internal matter of Ministry of Commerce and both Federal Board of Revenue (FBR) and State Bank of Pakistan are also involved, therefore, Commerce ministry was in favour of issuing the Procedure in the form of SRO/Order. Law & Justice Division was again requested on August 6, 2014 to vet the procedure in the format of SRO/Order.
The Law & Justice Division made amendments in the draft procedure two times, therefore a revised draft was submitted first on August 27, 2014 and then on October 1, 2014. On November 10, 2014, the Law & Justice Division again returned the file with observation/changes. The draft procedure is being changed according to the proposed amendments and will be submitted to Law Division shortly, the Commerce ministry informed the committee in written reply.
Committee members asked the Commerce minister to allow Duty and Tax Remission for Export (DTRE) scheme across the country over vegetable ghee, however Commerce minister said that some restrictions were being imposed after FBR concerns to reduce smuggling. He further said that the issue would be taken up with the FBR.
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