ISLAMABAD, Jan 8: Pakistan has asked the interim authority in Afghanistan to set up its embassy in Islamabad as soon as possible and has allowed Pakistan-Afghanistan trade in Pakistani Rupee on advance payment besides adding 18 exportable items.

But this is not a quid pro quo to the opening of Pakistan embassy in Kabul and consulate in Jalalabad next week, Commerce Minister Abdul Razak Dawood told a news conference here on Tuesday.

Pakistan has faced over $500 million worth of export loss during first six months of the current fiscal year, he said, and went to explain that total target for July-December 2001 was $4.956 billion but it amounted to $4.449 billion due to Afghan crisis.

Similarly, during the month of December exports amounted to $714 million as against a target of $933 million.

He said the impact of duty and quota relaxations by the European Union had taken effect on Jan 1, 2002, and hoped that ongoing IMTEX textile fair in Frankfurt and forthcoming Interjenes garments show, also in Germany, on Feb 1, would contribute positively towards Pakistan’s exports.

The minister said the government was examining creating a revolving fund for suppliers’ credit to help Pakistani traders and businessmen benefit from the emerging business opportunities in Afghanistan.

The government, he said, was also looking into ways and means as to how warehouses in Kabul and Jalalabad could be established for the supply of Pakistani goods there.

On a question as to how business and trade with Afghanistan was possible without an embassy in Pakistan and in a hostile situation, the minister said: “It is definitely a big problem. We are trying to sort out things with Afghan authorities so that their embassy is set up here as soon as possible”.

Regarding hostile sentiments, the minister said the situation was not good and trade was not easy but business people in Quetta and the NWFP could do that because they already have good contacts in the neighbouring country.

Mr Dawood said that Afghan transit trade was intact and there was no change in it as far as Pakistan was concerned. He, however, explained that trade under this agreement had stopped due to war but Pakistan had no objection if somebody wanted to use that agreement for trade.

The minister said that Pakistan-Afghanistan trade was currently taking place every day but obviously on cash basis. He said Finance Minister Shaukat Aziz would attend a meeting of donors in Tokyo on Jan 21 to know as to how its $100 million assistance would be utilized in Afghanistan.

The minister said that since Afghanistan had no banking system at present, the only requirement the government wanted the exporters and businessmen to meet was documentation so that it could know which product and in what quantity had been exported.

The only reason, he elaborated, to allow trade in Pakistani currency was that factories would start manufacturing, Pakistani products would get market and people would get employment.

On the question of exports in foreign exchange, the minister said that traders would get duty drawback under the normal rules and enjoy sales tax refund. The exportable goods now number 32 with the addition of 18 more items to the list.

The government wanted to expand the list up to 300 items so that a time came when there was no positive list, only a few restricted items on a negative list, he said, adding a two-member committee comprising secretary commerce and a Member, CBR, had been constituted that would keep on updating the list regularly.

The minister said that another committee had been set up in the Export Promotion Bureau to complete its deliberations by Jan 15 so that the issue of provision of bid bonds and performance bonds to Pakistani contractors and consultants could be taken up with the SBP because otherwise they would not be able to compete in Afghanistan.

To a question about the import of goods from abroad and then their re-export to Afghanistan, the minister said there were some problems on that front due to non-documentation in Afghanistan but added that the government would try to find out a solution to this issue.