Need of the hour to meet WTO challenges


Dec 15 - 21, 2003




Today is a critical point in time because the major trading partners of Pakistan are increasingly concerned about their national security and are erecting defences. If Pakistan cannot comply with the security procedures demanded by the buyers of our products, we risk losing out to other nations that can and will...

These observations were made by Syed Irtiqa Ahmed Zaidi, Economic Consultant Ministry of Commerce at the Pakistan Trade and Transport Facilitation Conference (PTTF) 2003 jointly organized by the National Trade and Transport Facilitation Committee and UNCTAD in Karachi last week.

To improve the competitive position in the current globalization scenario, Government of Pakistan is however pursuing a proactive approach and has prioritized the areas of technological up-gradation, value-addition, productivity enhancement and quality enforcement. These areas are being addressed through sect oral policy formation and development of vision of these sectors.

The government has developed textile vision 2010, growth strategy for engineering sector (Engineering Vision 2010), Leather Vision, Fertilizer Policy and industrial policy for pharmaceutical sector in order to strengthen the manufacturing base promote investment and increase the share of these vital sectors of the economy in the country's GDP.

The government took an initiative during last three years to improve Pakistan's competitive position by reducing cost of doing business and investment in Pakistan.

Accordingly import duties on finished goods and industrial raw materials have been reduced in consultation with stakeholders of various industrial sectors of the economy.

Owing to burdensome demands of the foreign trade partners the transit time at the Karachi port as well as Port Qasim has been increased which is obviously disliked by the intended vessels carrying transit cargo for the land locked countries like Afghanistan and Central Asian Republics. Instead of coming to Pakistani ports generally prefer to call on Iranian Port Bandar Abbas despite it is 21 per cent more expensive as compared to Karachi Port. Obviously, if it is called inefficiency on the part of the port handling, it is diverting cargo business from Pakistan towards Iranian port is that, their transit time is much faster as compared to handling at Pakistani ports. According to a participant of the conference that it takes hardly 6-8 days for clearance at Bandar Abbas as compared to 15-20 days at Karachi port. The calling ships naturally avoid the port charges on account of inefficient handlings at Karachi or Bin Qasim ports.



Peter Faust, Head, Trade Logistics Branch, and UNCTAD, speaking at the conference said that the terrorist attacks on September 11 2001, illustrated the critical yet fragile nature of international transport system. For the global economy to flourish, this system must continue to provide safe, secure, efficient, and reliable services to travelers and customers in parts of the world.

At the 2002 G8 Summit in Canada, heads of state agreed on a set of cooperative actions to promote greater security of land, sea and air transport while facilitating the cost-effective and efficient flow of people, cargo and vehicles for legitimate economic and social purposes.

He said that trade facilitation is a critical element in any country's economic infrastructure. It aims at developing a widely accepted, consistent, transparent and predictable environment for international trade and transactions.

Addressing the conference, John Raven, International Consultant and Facilitation advisor was of the view that in Pakistan, as in many other countries, economic expansion is a prerequisite for political and social stability.

Many of the obstacles and opportunities in the path of expansion are political and need to be handled by political intervention. Such features include market access, and preferential tariffs and rules of origin. They are negotiated in the WTO, in or with such regional group as the EEU, APEC or ASEAN or through bilateral trade agreements.

Here success depends less on justice or need than on the ability to deploy influence and exercise pressure.

Pakistan, placed by a variety of geo-political circumstances outside the main regional groupings, has serious disadvantages, John remarked. There are other obstacles at the level of official and commercial operations, however, that have a very powerful effect on external trade performance and national income and revenue. They subject the individual international trade transaction to a wide range of diverse but cumulatively very powerful constraints, on-costs and competitive handicaps.

Success, on a scale of the utmost significance for Pakistan, can be attained by well-managed day-to-day trading in the large and lucrative sector of the global market place already open to competition.

John observed that the most successful trading nations, or so-called developed economies, have gone far to reduce or eliminate many of the regulatory and other frictional factors that still inhibit and restrict their global supply, production and delivery systems, but they are also assuming and imposing a number of new, potentially very damaging requirements to meet acute concerns for national security.