Trade policy

The usual

Sometimes the commerce ministry works as if in isolation. And, just like their counterparts in the finance ministry, its officials also feel as if a poor showing for a couple of years – in terms of achieving budgetary targets – is no reason not to keep setting ambitious targets. The Strategic Trade Policy Framework 2015-18 now talks of achieving $35 billion in exports by the time PML-N goes asking for votes again in the general election. And, quite boldly, the Framework suggests overcoming local production problems – energy, efficiency, competitiveness, value addition, etc, and increasing trade across the region, as if by the stroke of a pen.

To its credit, the government seems to have found the text book path to a surplus – remove energy problems, expand production base, add value to products, enhance competitiveness and simply increase exports and earn more. And the Framework is quite full of words like incentives and innovation and expansion. Yet the proof of the pudding must, at the end of the day, lie in the eating. Talk of increasing regional trade must, of course, be welcomed. But why does the government think it has been put off all this time? There can be little trade unless the export basket bags a price in the international market, of course. And the N-league has come and gone again and again (like others), made the same promises, yet the export matrix has hardly changed all these years.

The Framework’s seriousness can best be judged from the fact that it offers little or no incentives for the disgruntled textile sector, which contributes 57 per cent to the final export figure. The text book approach that the ruling party is seemingly employing mandates building on production strengths to improve exports. All talk of improving competitiveness will amount to nothing if the textile sector continues to be deprived of value addition, among other issues. Once again the ruling party is building expectations and making promises that it will struggle to honour. And it is doing so close enough to the election to matter.