Federal Commerce Minister Makhdoom Amin Fahim said on Friday the government was trying for better market access for local businesses in international markets by concluding FTAs and PTAs with a number of countries through active trade diplomacy.
He was speaking at the Lahore Chamber of Commerce and Industry on Friday. Issues which came under discussion included: under-invoicing, duty on raw materials from India, decline in leather export ban on export of poultry to Afghanistan.
The minister said the government was initiating Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) with China, Malaysia, Singapore, Thailand, Brunei, Bosnia, Herzegovina, Russian Federation, Central Asian Republics,
Iran, Mauritius, Morocco, Tunisia, Libya, Jordan and Sri Lanka. He said that other market access initiatives included ECO Trade Agreement, Pakistan-India Trade Normalization Process and SAARC Agreement on Trade in Services and Agreement on South Asian Free Trade Area. He said the government had already announced a number of incentives to boost exports such as concessionary financing, duty free import of raw materials under temporary importation scheme/duty tax remission on exports (DTRE), duty drawback scheme, concessions in duty/taxes on import of machinery, raw material of priority export sectors and development of export clusters. He said the government was fully aware of countless challenges faced by exporters in the face of the severe competition that required improvement in exports and expansion in the export basket duly supported by competitive prices and excellent quality. He said the scope for agricultural products export was quite vast. However, Pakistan has not been able to make any significant headway due to a complicated regime of Sanitary and phyto-sanitary (PSP) requirements of the WTO. He said that it was the collective responsibility of all stakeholders to move forward in complying with the commitments to get maximum benefit.
Calling for an active two-way region-specific and sector-specific detailed public-private dialogue before the Strategic Trade Policy Framework for 2012-15 is finalized, LCCI President Farooq Iftikhar stressed the need for ensuring effective execution of National Trade Facilitation Strategy in close coordination with all stakeholders. He said the government should expand market access by entering into FTAs and PTAs with countries where it had comparative competitive advantage. He proposed creation of country-level and regional FTA/PTA Advisory Council involving the private sector and govt officials for exploring all avenues.
He said regional trade should become a pillar of the Strategic Trade Policy Framework for 2012-15 as it was economically efficient. The recent thaw in Pakistan and India trade relations and reciprocal MFN status will help the cause of greater regional trade.
South Asia is home to one of the largest consumer markets in the world in terms of size. Trade within SAARC is merely 5% – 6% of their total world trade whereas trade within ASEAN stands around 25% and is expected to increase to 40% by 2015, he added.
He said the LCCI fully supported increased regional trade but it should not be at the expense of the local industry which was already under severe pressure due to the energy crisis. The situation for various sectors of the economy with regard to trade with India demands a measured approach whereby the local industry such as pharmaceutical, automobiles, auto-parts, ghee and detergent manufactures are supported for improving their innovative capacity to better cope with the onslaught of new competition from across the border, he added.
The LCCI president urged the minister to look into issue of huge import of used cars that had incurred revenue losses to the tune of Rs.14 billion but also hit very hard the auto vendor industry whose losses were estimated to be around Rs.30 billion. The situation led to loss of jobs of almost 45,000 workers as well, he added.
