NON-TARIFF BARRIERS POSING SERIOUS THREAT TO EXPORTS
The govt will take China, US help to upgrade laboratories
From KHALID BUTT, Lahore
June 06 - 12, 2005
Despite having greater accessibility to the EU and the US markets, and phased out quota restrictions under the WTO regime from January last, the non-tariff barriers are feared to be the biggest challenge for Pakistan's exports unless the manufacturing sector produces quality goods in conformity to the international standards.
The non-tariff barriers in the form of standards, technical regulations, sanitary and photo-sanitary measures and conformity assessment procedures have to be tackled effectively in order to stay in the international export market.
Unfortunately, the official quarters responsible for providing infrastructure essentially required for maintaining quality and standards have failed in taking any step in implementing the plans of operating 11 laboratories, ensuring quality and standards of products with in two years to compete in international markets. Amazingly, they also failed to utilize the allocated funds worth Rs2.1 billion for a mega project already been approved for testing pharmaceutical, leather and textile products.
Informed sources told PAGE the government had plans for asking China and US help upgrade laboratories for the present 15000 international standards presently been adopted world over of which 46 standards were mandatory.
Sources said that maintaining quality and standard of the manufactured goods was of paramount importance for Pakistan to comply with the quality benchmark well defined in the WTO rules as well as to respond positively to the choosy international markets.
To achieve the required standards, the Pakistan Standards and Quality Control Authority (PSQCA) has already been established to ensure quality products. The PSQCA has already granted ISO-9000 certificates to 3000 companies. On the other hand, high charges taken by the government-owned Pakistan Council for Scientific and Industrial Research (PCSIR), Pakistan Industrial Technical Assistance Centre (PITAC) and ECO Textile Laboratory for making various tests, which are causing a lot of problems for small and medium exporters who have to meet the conditions laid down by their foreign buyers.
Despite the fact that ECO Textile Laboratory set up with the funds raised under Export Development Fund (EDF) collected from exporter's earning, however, the exporters' community has no say in its working/operations.
Exporters demand that a board be constituted with the representatives from the private sector has also failed to attract the attention of the decision makers so far. Consequently, the exporters were highly critical about Export Promotion Bureau's role by saying that the price list issued by laboratories carried EPB's logo.
"Contrary to the well defined role of the Export Promotion Bureau to facilitate exporters, the exorbitant rates for laboratory tests of the export items prior to their shipment have been allegedly approved by the bureau". If the EPB officials do not realize that what could damage the exports than what else could defend and protect the interest of exporters, the exporters raised a valid question.
The Synthetic Fiber Development and Application Centre, ECO Textile Laboratory, set up with a cost of Rs68 million dished out from the export development fund (EDF) is of no avail to small and medium-sized exporters who have to pay high charges for various pre-shipment tests required for export goods.
The laboratory, established about three years ago, was supposed to facilitate small and medium sized exporters for pre-shipment testing of the export products essentially required by the importing countries. Furthermore, it was also visualized that the upgraded testing facilities would help meet the quota free requirements.
Exporters complain that for a one single test they have to pay around Rs15,000 to Rs20,000, which puts extra burden on input cost of products. According to the price list of ECO Textile Laboratory for the year 2003, there had been an increase of around 30% in charges for most of the tests, over the previous price list of year 2002.
Former Chairman, Pakistan Bedwear Exporter Association, Shabbir Ahmed, said that at a time when Rs68 million was sanctioned from the EDF for the establishment of laboratory, most of the infrastructure was existing, particularly the building and some lab equipment. "But the question is where this huge amount of Rs68 million has been spent, and even after the lapse of so many years no audit has been carried out?" He was critical about high charges of testing and said the exporters were suffering badly as they could not offer to pay huge charges. Ahmed said that each order placed by a foreign buyer required several tests, including AZO-dyes, which alone cost Rs4,250 to Rs5,450. Similarly, print durability test cost Rs1,000, and identification of yarn or fiber costs Rs3,200. In total, a single export order could cost up to Rs40,000 to an exporter, he added.
Large industrial setups having their in-house test lab facilities do not incur huge cost, where as small and medium sized exporters are compelled to pay high price for each test.
If test charges are brought down, it would not only benefit exporters, but would also result in high turnover, bringing in more revenue to the lab.