The Pakistan Leather Garments Manufacturers and Exporters Association (Plgmea) has urged the Ministry of Commerce to re-impose 20 percent duty on export of wet blue leather which is used in manufacturing of leather garments.
The Plgmea chairman, Fawad Ijaz, in a fax to the Commerce Minister said that due to the excessive export of raw leather the export of leather garments had decreased by 17.43 percent whereas the export of leather surged by 14.58 percent during the period July-September 2004 as compared to the corresponding period of last year.
He said that previously there was 20 percent duty on export of wet blue leather whereas export of raw hides and skins was banned. Several other leather garment producing countries have the same restriction on export of raw hides and skin.
He said that Plgmea had taken up the issue of imposition of duty on export of raw and semi-processed leather with the Ministry of Commerce for sustaining the export of downstream value-added industries of leather garments and leather goods. However, the Ministry did not take any measures, contending that WTO rules did not allow such restriction.
The Plgmea chief challenged the Ministry's view and said that as per WTO agreement GATT 1947, Part 1 Article XX for 'General Exceptions, sub para (I) any government can impose restriction on export of domestic materials to ensure availability of such materials for the domestic industry.
He said that the decline in export of leather made-ups and increase in the export of leather has created an alarming situation which would inevitably lead to unemployment since the leather made-ups sector is a labour-intensive industry.