Pakistan is hopeful of getting Indian support pertaining to trade concession being offered by European Union on 75 items in the upcoming commerce secretaries'' level talks between the two countries scheduled to be held in Islamabad next month.
Secretary Commerce Zafar Mehmood while briefing National Assembly''s Standing Committee on Commerce said that Indian secretary commerce along with a delegation would arrive in Islamabad next month and Pakistan would take up the matter of EU concession on 75 items with the Indian side.
After 2010 devastating floods in the country, the EU offered 20 percent relief in duties on import of 75 items from Pakistan in October last year, which would help Pakistan earn an additional 100 million euros per year. Around 90 percent items of the package is raw materials of the textile sector, but the offer is still to be approved by World Trade Organisation (WTO) and then from the EU Parliament.
Mehmood told the committee, which met with Eng. Khurram Dastgir Khan in the chair here at the Parliament House, that the government actively pleaded the case at every forum. The prime minister and minister for commerce have sent letters to India, Bangladesh, Sri Lanka and Vietnam that are opposing the concession and sought their support pertaining to EU concession, he added.
The secretary commerce further said that EU provided several trades favours to other countries in which some were still in progress under WTO rules and regulations. The EU announced special scheme for Less Developed Countries (LDCs), and those which qualify could avail the concession. In this regard, a UN organisation has to consider the status of LDC for any country.
The committee was informed that Pakistan, India and China could not qualify for the scheme because their population exceeds 50 million, which was pre-requisite for the concession of the EU. Before the 2010 flood, Pakistan actively pleaded its case to get some concession from EU, but could not succeed.
The Secretary Commerce rejected the notion that Pakistan was not properly advocating its case in WTO, adding that he was also part of the lobbying team. However, he said there were other countries, who wanted some incentives in reward for supporting Pakistan case in WTO.
The Committee expressed concerns that major failure to Pakistani exports was due to war on terrorism, resultantly WTO trade regimes could not be run in letter and spirit. This is first time that concessionary proposal of 75 items have been submitted by Ministry of Commerce to European Union, which will be considered in March 2011. The committee was informed that if Pakistan failed to get the EU concession approved from WTO, then it has to wait for another three months.
The Committee, however, urged the government and the ministry of commerce in particular to utilise all means to get the support of all allied countries like India, Bangladesh, Sri Lanka, Vietnam and other countries for that case. The panel further urged the government to prepare a mechanism and launch an effective strategy to get the EU concessions approved.
The Committee appreciated that despite flood, war on terrorism and law and order situation, Pakistani exports have reached $2 billion per month in February, which become possible due to tremendous role of Pakistani businessman, farmers, exporters and traders communities. The panel, however, advised the Ministry of Commerce to watch look into other factors such as increase in prices of raw cotton, yarn, rice and other commodities.
The committee expressed concern as mostly raw material of cotton, rice and other commodities of Pakistani agriculture was exported causing the local industry to face difficulties in domestic production and resultantly leading to increase in prices of local cloths.
The committee said that although cotton trade had been made free but efforts should be made to promote the trend of value addition in cotton, textile and other items, which can be done jointly by local industrialists and Ministry of Commerce. The committee was informed that quantity of export of different commodities has been increased. The export of rice has been increased by 84 percent in 2009-10 as compared to the last year. Similarly, the export quantity of different commodities like meat by 43 percent, raw cotton by 116 percent, cotton yarn by 45 percent, yarn other than cotton yarn by 50 percent, art, silk and synthetic textile by 58 percent in last year, as compared to previous year.
The panel expressed concern that allocation for Export Development Fund (EDF) for the year 2010-11 was Rs 2.097 billion where as only Rs 839.170 million have been released. The Committee emphasised to bring transparency, rational and productivity in various on-going projects and asked the Ministry of Commerce to ensure before disbursement of funds that objective of the on-going projects would be achieved.
The committee recommended that preference should be given to run the projects in the remote and rural areas. Regarding the Trade Development Authority Pakistan Ordinance 2007, the committee directed ministry of commerce to propose amendments to the Ordinance by March 31, 2011 and input of parliamentarians should also be included. It further recommended that the TDAP Board should be reconstituted and its size should be reduced.
The Committee recommended that as handicraft was a vast and attractive field for exports, therefore, Chairman Handicraft Association may be welcomed in the Board. The Committee recommended that for promotion of the Pakistani exports, EDF funds should only be utilised by TDAP.