An Analysis of Trade Policy (2003-04); the WTO Does Not Lay Down Any Conditions on Tariffs, Restricting Various Incentives to the Industry. the Trade Policy Seeks to Provide Generous Institutional Support to Exporters and at the Same Time Further Liberalises Imports in Order to Boost Foreign Trade
Asad, S. Hasan, Economic Review
The trade policy (2003-04) has been unveiled on July 19 by Commerce Minister Humayun Akhtar Khan for the current year 2003-04 in the midst of the two opposite situations of post-2004 WTO challenges on the one hand and 6 per cent higher than targeted exports of $10.4 billion during 2002-03. It was for the first time that the $10 billion mark was crossed with export proceeds at $11.03 billion, 21 per cent above the preceding year (2001-02). An almost across the board rise in average unit price of more than three dozen items coupled with increase in their export quantity and greater market access in major export centres of the globe are the factors that have contributed towards the phenomenal 21 per cent growth during 2002-03. Exports of bedwear, readymade garments and fabrics fetched more that $1 billion each, while total textile sector fetched over $7 billion. Yet another unnoticed factor is the bringing in accumulated export proceeds from most probably Dubai where exporters had been keeping dollars in the wake of depreciating rupee which has lately been reversed for obvious reasons.
Imports during the last year (2002-03) were $12.2 billion, which was 17.8 per cent higher than the preceding year. In other words, the trade deficit was $1.17 billion.
For the current year, export is targeted at $12.1 billion, 9.7 per cent higher than last year. Import is planned at $12.8 billion, with trade deficit reduced to $0.7 billion. This is based on the assumptions that the exchange rate will remain stable, there will be greater access to export finance and the domestic and external environment will not face new challenges.
The main features of the new trade policy are as follows:
Upgradation Fund: An Upgradation Fund of Rs.3.74 billion, managed under public-private partnership, will finance the Technological Upgradation, Social, Environmental and Security projects, setting up combined effluent and waste water treatment plants (remember WTO requirements), hiring consultants and professional marketing companies abroad, upgrading industrial clusters, warehousing Pakistani products abroad, Agriculture Export Processing Zones, Special Export Zones, Garments Cities and Brand Acquisition. For technical management and export marketing, consultancy services will be provided at the enterprise level from the Fund.
Joint Ventures: EPB will engage consultants to identify, advise and assist export enterprises for entering into joint ventures with compatible partners on 50:50 cost sharing of consultancy service out of Upgradation Fund.
Industrial Clusters: Five more clusters will be organised for sports goods and surgical goods in Sialkot, for auto parts in Karachi, for electrical appliances in Karachi and Lahore and for knitwear in Karachi and Lahore. Infrastructure facilities will be provided for these cluster cities and products. A Cluster Development directorate will be established in EPB with cluster development agents for purpose of coordination with local and international stake holders.
Contamination-Free Cotton: Contamination-free cotton is vital for quality production and cost effectiveness in the textile sector. A training institute will be established out of EDF for training the farmers and ginners to ensure supply of contamination-free cotton to the textile industry. Financial support to ginners will be provided out of Technology Upgradation Fund for improvement of ginning.
Warehousing Facilities Abroad: EPB will hire professionals for warehousing facilities in selected countries and offer such space to exporters. Arrangements have been made for starting up the warehousing operations in Kenya, Poland and Sharjah.
Promoting Pakistan Product: To promote exports, EPB will hire through professional companies retail space in high-traffic shopping malls in major commercial capitals of the world.
Brand Name Acquisition/Franchising: A new scheme will be launched to enable exporters to acquire/franchise brand names. …