July 16 -
Trade deficit narrows to $1.52bn
Pakistan's trade imbalance during the outgoing
fiscal 2000-01 narrowed down to 1.52 billion dollars as against 1.75
billion dollars deficit in fiscal 1999-2000.
The official trade figures released on Monday,
revealed that Pakistan's export earnings exceeded for the first time
the coveted figures of 9 billion dollars and ended up at 9.14 billion
dollars, showing an increase of 12.66 per cent.
Imports during 2000-01 increased by 3.44 per cent
to 10.66 billion dollars compared to 10.31 billion dollars a year
A 19.5 per cent rise in the oil import bill
amounting to 3.35 billion dollars was the main contributing factor in
trade deficit suffered during the last fiscal year. Minus this, the
overall trade balance is in surplus by more than two billion dollars.
$10.1bn export target in new trade policy
Pakistan's new trade policy has been announced on
Monday which seeks to achieve a conservative export target of $10.1
billion and contain imports at $11 billion during fiscal 2001-2002.
The policy announced on the radio and television
also offered incentives and rewards for exporters to diversify
products and markets with main focus on South America and Eastern
Europe. The import target was set at the same level of last year while
export target was nudged up by $100 million to $10.1 billion from last
year's $10 billion.
The minister for commerce and industries Razzaq
Dawood admitted that poor export performance last year was due to the
"inability to create export culture and overall investor-friendly
environment" besides drought and unfavourable exchange rate.
The main thrust of the trade policy is to reduce
the anti- export bias and lower the maximum tariff to 25 per cent from
30 per cent and pursue the demand-led strategy to get a greater market
share in major products like textiles, leathers and rice.
The development of sectors like fisheries, fruit
and vegetables, gem and jewellry will continue but greater focus would
be diverted on engineering, chemical and ceramics in view of tariff
While correcting major structural weaknesses and
fault-lines, the minister announced to expedite refunds and market the
Duty and Tax Remission for Export (DTRE) rules. To supplement this,
the scheme of common bonded warehouses has been revived to reduce
carrying costs of exporters as these warehouses would become virtual
Duty Free shop for inputs.
The exporters with at least 10 per cent growth over
last year's exports would be allowed to retain 50 per cent of
additional exports in their local foreign currency accounts to use it
for the purchase of machinery, equipment, raw material and payment of
commission and promotional expenses.
Exports to Western Europe decline
Pakistan's exports to Western Europe have dipped
this year despite 22 per cent devaluation of the rupee, falling
international prices and record overall volume sales of merchandise,
signalling the initial impact of the downturn in industrial economies
on foreign trade. Europe accounts for 30 per cent of the total
Figures for 10 months of current fiscal when
compared with corresponding period of the last year show that earnings
from three major markets, the UK, France and Germany have dropped. The
strategy of deeper penetration in traditional markets has not worked
in these countries.
Yet, exports to the US have picked up. The impact
of the slowdown of the world's largest economy is apparently not
visible. The US is Pakistan's largest export market, absorbing about
20-25 per cent of total earnings for the past few years. There was a
slight fall in sales to Canada.
The scope of Pakistani exports to Saudi Arabia has
increased after the Kingdom has reduced import duties from 12 per cent
and 7 per cent to only 5 per cent.
According to a report dispatched by Pakistani
Consulate in Jeddah to Export Promotion Bureau (EPB) on Thursday, this
market has become very attractive for exporters as there is no duty or
levy other than the 5 per cent import duty.
Only those items will have import duty of 20 per
cent ad valorem in the Kingdom which are locally produced.
The Philippines' National Food Authority said on
Friday it would consider importing rice from Pakistan next year, a
move expected to foster more competition among its Asian suppliers.
"They (Pakistan) can now join our tenders next
year," NFA head Anthony Abad told Reuters by phone. The NFA, the
only firm allowed by Philippine law to directly import the staple
grain, recently informed Pakistan it would accept rice from that
country in its future tenders.
The government of Iran has extended transit
facility for Pakistani kinoos through its territory for Turkmenistan
and other Central Asian Republics up to March 20, 2002.
This has been communicated by Pakistan's commercial
counsellor in Tehran to Export Promotion Bureau (EPB). The facility
was earlier granted till the end of previous Iranian year i.e. March
20, 2001. But keeping in view of potential of kinoo and other citrus
fruits exports to Central Asian States through land route, commercial
section, Embassy of Pakistan, Tehran successfully convinced
authorities to extend the facility up to March 20, 2002.
EU curbs on textile quota
The third round of talks, held between European
Union (EU) and Pakistani officials over the lifting of textile quotas,
did not move ahead as both sides were stuck to their previous stand,
official sources said.
The EU had been demanding duty reduction to 17.50
on imports from its member states, in return it had offered five per
cent duty on Pakistani textiles.
The three-member EU mission, who visited Islamabad,
last week is reported to have left without achieving any progress in
the talks initiated early this year.