National Assembly Standing Committee on Commerce grilled Commerce Ministry on Tuesday for purported failure on all fronts from exports to trade pacts with other countries. This was the crux of the meeting presided over by Siraj Muhammad Khan and attended by a large number of members dominated by women members. Commerce Ministry's team led by Secretary Commerce Younus Dagha was seen disturbed with everyone ignoring the Chairman of the committee. At one stage, Secretary Commerce commented that the Chairman should decide how to run the meeting.
Commerce Minister Engineer Khurram Dastgir reached the meeting almost one hour and 30 minutes late. Chaudhry Asadur Rehman, of the ruling party stated that if a Minister does not resolve issues of his/her portfolio he/she should resign instead of shifting responsibility onto other ministries. "Finance Ministry and Commerce Ministry has destroyed the country's economy and exports. The only success of Finance Minister, an accountant, is that he is getting loans from everywhere," he added. PTI member Sajida Begum walked out from the meeting in protest, saying that "the country is drowning while the committee members are laughing."
As the meeting started, Chairman Standing Committee stated that a country where rates of electricity and gas are higher compared to its competitors, cannot progress. However, when Commerce Ministry officials started presentation on Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs), most of the members of the committee maintained that the Commerce Ministry has not signed any FTA since 2013 which indicates that the Commerce Ministry has miserably failed to perform and has presided over a trade deficit of $ 32 billion during 2016-17.
The Secretary Commerce argued that the government had slowed down talks on FTAs and PTAs since 2013. However, FTA talks with Thailand and Turkey are in final stages whereas talks will start with Japan at the end of the current month, adding that FTA talks with South Korea are also under consideration. Explaining the impact of FTA with China, the Secretary Commerce said that during the initial four years Pakistan benefited from the pact with China, however, later on issues surfaced.
He said, Pakistan has now started work on FTAs and PTAs expeditiously with other countries and will finalize pacts with major markets as trade cannot post growth without FTAs. He further stated that measures are also being taken for an FTA with Russia. In reply to a question, he said that progress on SAFTA is negligible due to political situation between two major members of SAFTA. However, when almost all members started making a hue and cry on current situation of exports, Secretary Commerce said that Pakistan is unable to compete with neighbouring countries due to higher prices of gas and electricity. He said electricity prices in Pakistan are Rs 2-3 per unit higher than in competitor countries.
This is the reason Pakistan's exports have declined to $ 20 billion from $ 25 billion, he argued. However, he claimed that declining trend in exports has now begun to show a reverse trend after implementation of the Rs 180 billion incentive package. He said the Commerce Ministry is preparing a summary for the Economic Co-ordination Committee (ECC) of the Cabinet for a reduction in electricity and gas rates for industrial sector. He said cross subsidy, in the form of cheap electricity for lifeline consumers, is the main reason for higher rates for industry and the impact of all surcharges and levies are being charged to industrial and commercial consumers.
"The government has to take a political decision on tariff policy," said Dagha who was recently transferred to Commerce Ministry from Water and Power Ministry. The committee was informed that Rs 28 billion of Export Development Surcharge (EDS) is stuck with Finance Ministry. Shahzadi Umarzadi Tiwana said that he was disappointed with the performance of Commerce Ministry. Parvaiz Malik supported the viewpoint of Ch Asad-ur-Rehman and said that the government has to adjust dollar-rupee parity and reduce price of electricity.
Chairman Standing Committee stated that textile sector is shifting its investment into the real estate sector, suggesting that the government should impose a ban on such investments. Commerce Minister Engineer Khurram Dastgir who faced criticism for attending the standing committee meeting after months, said the incumbent government has not signed any PTA or FTA because private sector had serious reservations about previous pacts. He acknowledged that the price of electricity and gas is higher in Pakistan but added that at the same time both facilities are now available to the industrial sector without any load shedding.
Commenting on Rs 180 billion incentives package, the Commerce Minister said that Finance Minister has already released Rs 6 billion to exporters whereas Rs 4 billion will be released within a couple of days. He said the remaining refunds will be cleared by August 14 or the next working day. According to an official statement, the committee was briefed by the Ministry that no PTA/FTA has been signed by the present Government since 2013 to 2017. The committee showed its concern about speedy trade deficit in exports. It was informed to the committee that the Prime Minister has announced a package in recent past due to which the trade rate has been enhanced to 16% in the last month. The committee recommended the Ministry that import of the commodities/products which are produced within Pakistan should be discouraged by imposition of taxes, tariffs and regulatory duties.
The committee was briefed by the Ministry that due to enhanced rates of oil, gas and electricity, the industries are facing problems to compete the international market resulting in a decline of exports, causing a trade deficit in country. The committee was told that now the electricity and gas are regularly and continuously provided to the industries. It was recommended by the committee that instead of giving cash subsidies to the industries, rebate on the rates of electricity and gas should be granted to all the industries. It was directed by the committee that the exemption of General Sales Tax (GST) on exports of all commodities/products should be considered by the Ministry.
The meeting was attended, among others, by Chaudhry Asadur Rehman, Muhammad Pervaiz Malik, Waseem Akhtar Shaikh, Tahira Aurangzeb, Zeb Jaffar, Dr Shezra Mansab Ali Khan Kharral, Shahzadi Umerzadi Tiwana, Dr Mehreen Razaque Bhutto, Nazir Ahmed Bughio, Mussarat Ahmad Zeb, Sajida Begum, Sanjay Perwani and Dr Fouzia Hameed.