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 5. TRADE  6. GULF



Oct 22 - 28, 2001

EU pledges $1bn concessions: Textile trade with Pakistan

The European Commission on Tuesday promised Pakistan textile trade concessions worth over one billion dollars in what officials said was an unprecedented European Union effort to boost the country's economy.

Proposals made by European Trade Commissioner Pascal Lamy after hectic negotiations with Islamabad including discussions with Pakistani Trade Minister Abdul Razzak Dawood in Singapore over the weekend, call for the elimination of all EU tariffs on Pakistan's exports of clothing to the EU.

Lamy has also asked EU governments to agree to a 15 per cent increase in Pakistan's textile export quotas to Europe.

Pakistan in turn had agreed to reduce its own tariffs on European textiles, Lamy told a news conference. "The proposed package will give Pakistan the best possible access to the EU short of a free trade agreement," Lamy said.

The EU measures had been specifically tailored to target clothing and textiles which accounted for three-quarters of Pakistan's exports to the EU, the EU trade chief added.

Lamy's proposals are a vital part of a new EU drive to improve relations with Pakistan, now seen as vital ally in international efforts to clamp down on terrorism.

"I hope these improved concessions for Pakistan will reinforce the EU's political and economic relations with Pakistan and help the country in difficult circumstances," Lamy stressed.

Other EU initiatives expected in the coming weeks include a planned signature of an EU-Pakistan trade agreement which was put on ice after the 1999 military take-over.

Also in the EU pipeline is a first-ever package of direct budgetary assistance for Pakistan.

The EU was focusing on Pakistan because it is in "an exceptional situation," said Lamy, adding: "Trade is a weapon of peace."

Import bill up by 14.32pc in July-Sept

The total import bill in July-September period increased to Rs159.91 billion this year from Rs139.87 billion in the corresponding period of last year, showing a positive growth of 14.32 per cent.

The value of dutiable imports increased by 3.07 per cent during the first quarter (July-September) of the current financial year, and stood at Rs94.49 billion against Rs91.67 billion over the corresponding period last year.

However, despite an over all increase in the value of total imports during the first quarter of current financial year, the import duty receipts declined by 17.8 per cent as it stood at Rs14.06 billion during the first quarter against Rs17.1 billion netted during the same period last year.

According to final figures released by Central Board of Revenue on Thursday, the value of dutiable imports during the first quarter of current financial year was Rs94.49 billion against Rs91.67 billion over the corresponding period last year, showing an increase of over 3 per cent.

Hand knotted carpet exports down by 28pc

Pakistan's exports of hand knotted carpets fell by 28 per cent in the first quarter of the current fiscal 2001-2002 to $43.086 million from $60.622 million during the same period last year.

Exporters fear that their sales could decline more than 50 per cent during the second quarter because of "cancellation of orders after the last month's terror raids on the American soil followed by retaliatory military action on Afghanistan".

"The carpet exports have slid in spite of the fact that we did not stop shipment our previous orders even after the September 11 events," Pakistan Carpets Manufacturers and Exporters Association (South) vice-chairman (elect) Nisar Mir said.

The carpet exports plunged by 14 per cent during September to $21 million from $24.35 million in the corresponding month last year.

Distribution rules to be framed: Razak

Commerce Minister Abdul Razak Dawood on Thursday said that a committee would be set up, which would frame rules for the distribution of 15 per cent textile quota enhanced by the European Union (EU) for Pakistani textile goods.

In an informal meeting with newsmen held in a local hotel the minister said that he would, however, prefer to give this extra quota to new-comers, joint ventures and new industrial units.

TCP considers Iraq's plea

The Trading Corporation of Pakistan (TCP) is considering a request from Iraq that it replaces 52,000 tons of wheat rejected on quality grounds, a corporation official said on Thursday.

At the beginning of October, Iraq rejected 45,000 tons of a 96,000-ton consignment of Pakistani wheat because Baghdad objected that it contained sand and stones.

The total rejected had now risen to 52,000 tons, the TCP official told Reuters from Karachi.

ADB facility to finance LC

The State Bank told banks on Wednesday that the Asian Development Bank facility to finance confirmation of letters of credit would cover up to 100 per cent of the LC value.

Earlier this year the Asian Development had established a $100 million facility for this purpose.

In a circular issued to all banks SBP said that the facility was negotiated between Pakistan and ADB keeping in view that some international banks want confirmation of LCs opened by the banks operating in Pakistan "for a variety of reasons."

Islamabad wants tariff cuts

Pakistan has entered the final round of discussions with the 18-nation like-minded group of developing countries to form a joint stand for forthcoming ministerial meeting of the World Trade Organization (WTO) in Doha.

Pakistan is taking a stand that it would have no problem working under a new WTO round provided its concerns relating to implementation issues of the Uruguay Round were addressed, a commerce ministry official told.