TRADE DEVELOPMENT AUTHORITY OF PAKISTAN

S.KAMAL HAYDER KAZMI,
(feedback@pgeconomist.com)
Research Analyst
, PAGE
Aug
29 - Sep 11, 2011

Trade Development Authority of Pakistan (TDAP) was established on November 8, 2006 under a presidential ordinance. TDAP is the successor organization to the export promotion bureau (EPB) and mandated to have a holistic view of global trade development rather than only the 'export promotion' perspective of its predecessor.

EPB was set up in 1963 as an attached department of the ministry of commerce. More than 20,000 exporters were facilitated and partly funded to exhibit their goods abroad, and thus grow their exports.

Over 2,000 trade delegations were sent abroad or hosted in Pakistan by EPB in 43 years of its existence.

It provided a forum for dispute resolution between exporters and importers through the mechanism of commercial courts in collaboration with the judiciary.

EPB thus contributed in a significant manner, as Pakistan's exports - reported at just under quarter of a billion dollar in 1963 - increased by over 70 times to touch nearly US$16.5 billion in 2005/06. However, professional human resources were lacking at the times of EPB, and so in order to improve this deficiency, and to change the image of EPB as a bureaucratic organization, need was felt for EPB's metamorphosis into a more dynamic, professionally well-equipped organization, which was to be the TDAP.

In TDAP, the facilitation division is primarily responsible for trade policy implementation, with specific emphasis on simplification and harmonization of procedures with the objective of achieving a competitive edge in the context of emerging business realities. This division is devoted towards helping exporters in availing the opportunities as well as in the removal of obstacles in expansion of the country exports.

It also collects processes and, disseminates information to different stakeholders. The division is also responsible for organizing expo Pakistan, the mega event to display Pakistani products to foreign buyers, held annually at Karachi expo center.

Proposals are developed after consultation with various stakeholders for consideration by ministry of commerce.

The initiatives announced in the trade policy are then implemented and business procedures of schemes are worked out. In order to devise a proper implementation mechanism and to install an effective evaluation system, a close coordination and liaison with Pakistan missions/consulates/embassies abroad, is established that not only enables the smooth flow of the processes but also ensures transparency of the schemes.

TDAP in collaboration with export development fund (EDF) has taken up the initiative to set up the marble and granite technology institute to produce trained work force to assist the industry in exporting the high value marble and granite products.

If the provincial government grants subsidized land, an estimated amount of Rs50 million will be required to start the institute. On completion of the project, the skilled work force will be regularly available to cater to the growing need of the industry.

Most important marbles are of white color found in Peshawar division (Khyber Pakhtunkhwa) and green marble (onyx) found in Chaghai district (Balochistan).

Furthermore, the establishment of agro food technology institute Lahore is a project of EDF. The institute will enhance the agro food sector of Pakistan. A land of approximately one acre is required for this project.

Technical expertise from international institutes based in USA, Austria, China and EU will be arranged.

The institute will closely work with the TDAP and exporting units/establishment so as to keep the curriculum in line with requirements of export markets.

An initial allocation of Rs5 million has been sanctioned by EDF to develop a feasibility study and cost of the project will be financed through PSDP.

TRADE BALANCE

The phenomenal growth in trade volumes started in the second half of 2010. Exports from South Asia jumped more than a fifth in the last quarterly increase of 2010 and Pakistan was an active player.

Commodity exporters in all regions were benefiting from strong global demand. Volatile oil prices and supply could adversely affect many developing oil importers, especially those with high GDP dependence on petroleum group.

Pakistan's overall external account has also exhibited improvement even when capital and financial account receipts have continued to decrease during this period.

In addition to that, the recent trends in external sector variables suggest that the implementation of macroeconomic stabilization program has supplemented the credibility of the economic policies. The narrowing of the trade deficit and robust remittances caused a reduction of $5.3 billion in current account deficit during 2009-10 and further improvement continued in the first ten months of 2010-11.

The merchandise trade deficit improved by $240 million to $12,109 million during July-April 2010-11 as compared to $12,349 million in the same period last year, thereby showing an improvement of 1.9 per cent.

The month of November 2010 witnessed wide trade deficit when compared to previous year's same period position. This deterioration in trade deficit mainly owed to increase in flood related import expenditure during November and December 2010.

However, since January 2011, the trade deficit is improving against the corresponding months of last year mainly due to buoyancy in monthly exports growth combined with slowdown in import bill during the period under review.

More recently, the trade deficit witnessed an improvement of 33.8 per cent in April 2011 against the same month last year.