ISLAMABAD, May 28: Pakistan is not going to take any legal course or impose fine on foreign insurance companies for not withdrawing war risk surcharge (WRS) being charged on shipments to and from Pakistan.

“No way. We are not going to take any legal action or imposing fine (on foreign insurers). We are asking them to rationalise their charges,” said Commerce Minister Abdul Razak Dawood referring to reports that government was about to take legal course for withdrawal of WRS.

Addressing at a press conference here on Tuesday the minister also denied that National Commodity Exchange has been allowed to trade in futures contract.

“We are looking into it. There is no approval yet. There are a number of things to be seen,” said the minister when asked to comment on a row going on between Karachi Cotton Exchange and Karachi Stock Exchange over futures trading allowed by Securities and Exchange Commission of Pakistan (SECP).

The SECP chairman had announced at a news conference last week that trading in futures contracts has been approved in principle with shareholding of Karachi, Lahore and Islamabad Stock Exchanges, Agricultural Development Bank of Pakistan (ADBP) and Asian Development Bank (ADB).

Asked whether Pakistan would accept certain demands from a high ranking Afghan trade delegation for withdrawal of negative list under the Afghan Transit Trade, the minister said that Pakistan had heard their views and vice versa and still it was in the process of being discussed.

He said that he was scheduled to visit Kabul but since chairman of Afghan interim Authority Hamid Karzai would be here for trilateral summit of Afghan-Pakistani-Turkmenistan on oil and gas pipeline, these issues would also be taken up with Chairman Karzai.

The minister said that government was in the final stages of tariff restructuring in consultation with stakeholders, and maximum duty rate would be brought down from 30 per cent to 25 per cent as scheduled.

He said that major tariff restructuring had been carried out last year, it was being refined this year and would be fine tuned further next year. He, however, clarified that there would be no massive tariff reductions.

He appealed to the engineering industry particularly relating to televisions, air-conditioners, bicycles, refrigerators, fans besides detergents, soaps and all consumer items to drop their prices soon after the budget announcement as a consequence of tariff restructuring.

They should change their strategy. Earn less profit per unit and gain more by lowering prices through increased volume. The minister was of the view that this strategy will be beneficial for all including businessmen, the consumers and the country through increased employment.

Mr. Dawood said that leather garments industry had demanded export tax on hides and skins because, they complained, of their large scale export.

He, however, made it clear that there would be no export tax on hides and skins because the government believed that market mechanism should settle things down.

The minister appealed to the textile industry to take advantage of closure of textile units in the United States and form associations with the US companies either for joint ventures or using their brand names but don’t lose this great opportunity.

To a question on import of second-hand vehicles, the minister said that local industry had improved their production, and demand and supply position would be balanced out by August- September this year, therefore, he did not favour import of second hand vehicles. But he agreed that local prices were very high which were being looked into separately.

The minister said that he was very concerned with the state of ginning industry and it was in reality the weakest link in value addition chain. He said that there were 1200 ginning factories in the country but in his view only 600 factories were sufficient.

On an average, a ginning factory produced around 20,000 bales per season which should increase to 50,000 bales and referred to the US and Australia where the factories produced 150,000 bales per season.

He said that ginning industry was not ready to invest more in technology and complain that mills were not ready to pay additional cost. The minister wanted to have open debate on this issue and other structural problems facing the ginning industry to resolve the issues.