LAHORE – The All Pakistan Textile Mills Association (APTMA) Chairman Gohar Ejaz, while giving an SOS call to the government, expressed fears that the Punjab industry would wipe out if due facilitation in energy supply, cut in interest rates and a duty-free market access was not ensured at the earliest.
He said this while speaking at the Lahore Chamber of Commerce and Industry on Saturday. The APTMA chairman claimed that the industry possessed the potential to create two million jobs annually and a further ten million in the next five years if the business community is taken on board in policy making mechanism.
The APTMA Chairman, who spent well over an hour at the LCCI, spoke his heart out and gave a detailed prescription for all the economic ills being faced by the country. “Textile exports can reach a mammoth $40 billion provided Pakistan gets the same market access that is provided by the United States and European Union to 80 countries.”
He stated that market access was primarily impeding Pakistan’s textile export, while energy and power shortages in the country were making exports expensive. Elaborating his point, APTMA chairman said that spinners produce excess cotton yarn of $2.0 billion that has to be exported. He grieved that the weaving sector of the country is unable to utilise this yarn to produce fabric as local demand is limited, while exports are not possible due to lack of market access.
“We cannot blame the value added sector for not buying the excess fabric produced in the country”, he said, adding that the sector does not have market access which competitors like Sri Lanka, Bangladesh, Vietnam, NAFTA and many other countries enjoy. He said value added apparel sector is subject to 23 percent import duties in these markets compared with a zero rated access to 80 privileged economies.
He said that the significance of market access could be gauged by the fact that textile exports of Bangladesh stood at $5.0 billion in 2005 compared with Pakistan’s textile exports of $10 billion. Textile exports from Bangladesh in the last fiscal increased to over $15 billion, while Pakistan’s exports inched up by only $10.6 billion.
He claimed that APTMA was working on a strategy to increase market access through certain opportunities available to Pakistan. “Turkey has got free market access to the European Union and Pakistan has same access in China” he said, adding that Pakistan and Turkey could benefit if the two formed a strategic alliance. Pakistan could potentially supply textile intermediary products to Turkey for exports to EU and its entrepreneurs establishing joint ventures in Pakistan for value added exports to China.
Talking about immediate opportunities of textile exports to Turkey, he said that Pakistan currently exports $341.6 million worth of textile to Turkey, out of which $237.7 million is cotton cloth and $33.6 million yarn. He stated that following a change of origin rules in GSP Plus, finished fabric exports to Turkey could increase substantially.
Speaking on the occasion, the LCCI President Shahzad Ali Malik said that in order to achieve greater economic objectives, the Lahore Chamber of Commerce and Industry eyes Turkey as the most favourable destination for Pakistani products. Therefore, it is high time to come up with a joint strategy among LCCI, APTMA, PBIT to make an example of practical advantages of public private partnership, while getting the most from this window of golden opportunity.
“China from our neighboring countries and Turkey among the Islamic countries will remain our focal point,” LCCI president said. The LCCI president said that Turkey has an advantage of a customs union with the European Union, signed in 1995 and a decent trade agreement with the EU – without full membership – which allows it to manufacture for tariff-free sale throughout the EU markets.
These arrangements allow Turkish-made products to travel between the two entities without any customs restrictions. Taking full advantage of this scenario, Pakistani textile manufacturers can interact with the businessmen of Turkish textile sector who can export semi-finished textiles products of Pakistan to European Union after making certain value addition.
It can definitely prove to be a win-win situation both for Pakistan and Turkey. Shahzad Ali Malik called for immediate steps to materialise this idea as in addition to give boost to our exports, it will also cause to guarantee a quantum jump in bilateral trade between Pakistan and Turkey which currently stands at $630.6 million.
The LCCI President said that the Lahore Chamber of Commerce and Industry intends to plan a textile focus delegation to Turkey in February 2011. This delegation should consist of members from LCCI, APTMA and PBIT. The month of February is being targeted to streamline and establish economically viable linkages between Pakistani and Turkish textile sector well before March 2011.
The government of Punjab will organise Turkish Businessmen Conference in Lahore. The LCCI President hoped that more MOUs would be signed at upcoming Turkish Businessmen Conference.
