AMENDMENTS IN TRADE POLICY
There is always scope for improvement
From SHAMIM AHMED RIZVI,
Dec 28 - Jan 05, 2003
Expressing dissatisfaction over the Trade Policy 2002-03 announced by his predecessor of few months back the new Federal Minister for Commerce has described it deficient in many respects as it was based on wrong assumptions. He said he was examining it minutely, having discussions with experts and intended to make some amendments in the policy to make it more practical and export oriented.
In his first press conference as Commerce Minister, Humayun Akhtar Khan said "The present Trade Policy cannot be implemented as there is still no existence of "most talked Exim Bank and Free Port at Gwadar in the papers". He also disregarded the proposal of Free Trade Agreement (FTA), Most Favoured Nation status or any other step to promote trade with India in the present circumstances.
He cannot initiate dialogue with India on trade or grant her MFN status until the latter starts negotiations on political issues including Kashmir, which is the core dispute between the two countries, he said adding India wants MFN status before talks on political issues, but we desire political issues including Kashmir in first place to have durable trade relations.
He said that FTA with the United States was a part of negotiations but it was at preliminary stage, progress was expected during his visit to Washington from December 27. "I will seek expansion in trade and enhancement of textile quota, besides talks on scenario after 2005, when quotas would be removed, he maintained.
The export Promotion Bureau has also confirmed reports that number of changes are underway in the Trade Policy which were not favoured by the former Commerce Minister Abdul Razzak Dawood. Humayun Akhtar described the non-implementation of the proposa1 to establish an Exim Bank as a factor retarding the efforts to accelerate the tempo of exports. In the absence of a specialized financial institution to support the construction industry exports and exploit dully the potential of our marble and granite resource the objective of growth can hardly be realised. The existing arrangement with the banking system to offer export finance on a fairly liberal scale combined with the institutional arrangement in the form of the Export credit Guarantee Scheme with the assistance of Asian Development Bank, is only helpful in supporting traditional export items and cannot fill the void of Exim Bank.
The minister also referred to the non-declaration of Gwadar as a free port, which is still in the process of construction. It is only after the completion of this project in addition to establishment of business houses around the port to handle the import and export trade that a meaningful development programme of import and export trade from this port can be put through. Other observations of the minister related to prospects of normal trade relations with India which he discounted under the existing circumstances when that country is not willing to negotiate with Pakistan the pending political differences, including the core dispute on the future of Jammu Kashmir. Referring to a recent statement of the Indian Prime Minister that his government attached top priority to trade relations with Pakistan, the minister asserted that Pakistan would not agree to any proposal to accord 'most favoured nation' treatment to India unless that country was ready to negotiate political issues across the table. The approach in this direction is undoubtedly consistent with our national interest. India's hostility towards Pakistan has already proved to be the largest stumbling bloc in the way of a meaningful performance of Saarc as a useful forum for the development of regional trade and close economic cooperation between the member countries.
The minister who is scheduled to undertake an official visit to the US along with a delegation, beginning December 27, is expected to resume the unfinished negotiations on issues relating to implementation of the promises of the US government. These include greater market access for Pakistani exports, especially, the textile products, reduction in custom duty on Pakistani exports, and lastly the finalisation of the proposed free trade agreement between the two countries. The last noted proposal is in a preliminary stage and therefore concrete parameters of the proposal would have to be formulated by the Pakistan side so that ground could be prepared for the negotiations to move forward meaningfully. The immediate problem with the US authorities is said to involve detention of Pakistan's export containers at the US ports for one reason or the other. The export consignments, comprising mostly textile products, were sent by Pakistani exporters for sale prior to the Christmas celebrations in that country.
While eulogising the previous government for bringing about macro-economic stability in the country, lamented the unprecedented higher rates of electricity and gas, which add to the cost of production, thereby, proving detrimental to the country's economic growth. He argued that to make the exports internationally competitive, reduction in the cost of utilities is inevitable. However, he did not explain how it was link with the Trade Policy. The new commerce Minister, however admitted that his vision of trade was still in the making and it world acquire a concrete shape after normal consultation with experts and representatives of trade bodies within the country. It should not forget that when the Trade Policy was announced it was widely hailed by the Private sector in general and trade bodies in perticular.
These is always a scope for improvement and new commerce Minister has every right to make improvement if he so felt but it should have been done without publicity decrying his predecessor's work.