The Pakistan Cloth Merchants Association (PCMA) has strongly protested against ignoring the commercial exporters in the Textile package incentives and subsidies and patronising 25-50 processing houses/exporters of Pakistan.
"This wrong decision will badly hurt our 80 to 90 percent commercial exporters, who will be left out from availing this benefit," said PCMA Central Chairman, Abid Chinoy while commenting on the Trade Policy 2006-2007 here on Tuesday. In a statement issued here, he urged that the setback be rectified.
He termed the export target of $18.6 billion for the year 2006-2007 as ambitious but said that it could be achieved if the trade policy was fully and speedily implemented and more incentives were granted to the textile exporters.
The PCMA chief said that the projected import bill of $28 billion would enhance the trade deficit to $9.4 billion level, which is quite alarming and needs to be controlled, "otherwise it will swallow a great portion of our foreign exchange reserves."
He, however, appreciated the continuation of six percent R & D for garment and knitwear exporters and giving three percent R & D to the fabric exporters but requested the government to bring it at par with garment exporters ie, six percent, which would increase exports substantially.
Abid Chinoy strongly criticised the textile package approved by the Economic Co-ordination Committee (ECC) of the Cabinet recently. The incentives announced in the textile package in the form of R & D are insufficient and needed to be increased to a reasonable level, otherwise exporters would not be able to meet the harsh competition in the international markets, the statement added.
He urged the federal government to reduce the utility rates ie, gas and electricity as cost of doing business has increased substantially making our exports un-competitive and the ambitious export target of $18.6 billion will be very difficult to achieve.
He welcomed the decision to establish Trade Development Authority of Pakistan (TDAP) in place of 43-year old Export Promotion Bureau (EPB). He appreciated the efforts of the government for obtaining the benefit of GSP scheme in the EU markets and reduction in anti-dumping duty from 13.1 percent to 8.5 percent on bedlinen.
He also lauded the efforts of the Commerce Minister in negotiating the Free Trade Agreements (FTAs) with different countries, which will help to increase our exports.
He also appreciated 25 percent freight subsidy for export of new products and new markets but demanded the removal of Rs five million in a single year to one export house. Abid Chinoy further welcomed the initiatives such as skill development programme in textile sector, facilitation of SME exports and the establishment of proposed Warehouse City in Karachi.
He suggested that the Prime Minister and the Commerce Minister to announce the Trade Policy for three years period instead of one year in order to ensure continuity of trade policy for a longer period and its implementation in a systematic manner for increasing our exports.-PR