With the quota regime ending in January 2005 and the ongoing expansion in textile business in the country, Pakistani textile industry offers greater prospects of enhanced trade, particularly with the United States.
"A significant investment of $4 billion has been made in expansion of textile industry during last three years, and more is expected, putting Pakistan in a strong position to compete in the quote-free regime," said Dr Khurram Tariq, Chairman of Pakistan Hosiery Manufacturers Association (PHMA) while talking to APP on Sunday.
Dr Khurram Tariq attributed this growth to macro-economic stability realised through unprecedented business-friendly and conducive investment environment under the leadership of President, General Pervez Musharraf and the country's economic managers.
He also welcomed the elevation of Shaukat Aziz as the Prime Minister of Pakistan, saying, the country's businessmen feel more comfortable, as it would ensure the continuity of prudent economic policies, which has led to stabilisation of the economy.
Dr Khurram, a manufacturer and exporter of knitted fabrics and garments, said the knitted garments sector has a significant share in the country's textile exports, with annual 'turn-over of around S 1.5 billion. The industry is one of the largest employers in the country.
This sector realised exports of around $1.3 billion during the fiscal year 2003-04 and was targeting to achieve $1.5 billion worth of exports during the current fiscal, he noted.
He, however, added Pakistan's textile industry including the value added industries also have some challenges to compete under the global trade regime in terms of quality and standards, changes in laws, regional free trade arrangements etc.
The Chairman PHMA also referred to a new Generalised System of Preferences (GPS) scheme, being launched by the European Commission from January 1 2006, which may affect our export competitiveness due to proposed increase in the tariff structure.
To a question, he said, the investors in textile business were at present a little reluctant to put more money, owing to proposed changes in the EU policy like GPS system and some reports that the United States could delay the abolition of quota system.
Dr Khurram said the Trade and Investment Facilitation Agreement (TIFA) signed between Pakistan and the United States was a step forward for increased trade relations between the two countries, adding, but we must strive hard to secure a Free Trade Agreement (FTA) with the US, as it would benefit us a lot.
He said, the United States has signed FTAs with various countries and if we also have a similar arrangement with the US, it would put us in a better position to compete with others.
The Chairman PHMA said, although the Ministry of Commerce was taking up all these issues with the concerned authorities and was engaged in the process of talks, adding, but there was a need to adopt a more pro-active approach on these issues of vital interest.
Dr Khurram welcomed the creation of 'the Ministry of Textile Industry and said, it would greatly help in focussing on the development, growth and promotion of textile industry, which has about 65 percent contribution in the country's exports.
He, however, was of the view that the better co-ordination amongst various ministries and departments along with a broad and common vision was a pre-requisite to achieve proper results in terms of trade and exports promotion.
The Chairman PHMA appreciated the trade policy initiatives including the establishment of garment cities in various cities adding, the project was going well and will help promote and augment the country's exports.
To a query, he said, the government will have to establish a strict regulatory system to ensure quality and standard of goods and products under the WTO regime, as we cannot compete without ensuring and maintaining the world's quality and standards.