June 12, 2003	Thursday	Rabi-us-Sani 11, 1424

KARACHI, June 11: Pakistan has not gained much from a $143- million additional apparel market access package given by the US last year and is now seeking an understanding on all the trade related issues, on the basis of which, there is a desire to thrash out a bilateral free trade agreement (FTA).

State Minister and Export Promotion Bureau Chairman Tariq Ikram estimates total benefit of hardly $20 million from the last year’s market access package given by the US authorities.

Commerce Minister Humayun Akhtar who is now in Washington is expected to have asked the US authorities to review the package and consider more effective ways of benefiting Pakistan.

Talking to Dawn the EPB chairman expects that some headway in direction of reaching some understanding with the US could have been made in the initial round of talks between the minister and the US authorities. Some more areas could be covered when business leaders and technocrats get involved in the negotiations during President General Pervez Musharraf’s scheduled visit to Washington later this month.

The estimate of $143 million worth additional access to the US market was based on the assumption that enlarged quotas of seven categories of textile export quota would be fully utilized. These seven categories included 334/634, 338, 339, 347/48, 351/651 and 352/652. These categories cover woven gloves, coats of men, women, boys and girls, blouses, pyjamas and nightwears, man made fibre knit shirts and blouses and trousers.

Under the 2002 package a 15-per cent quota increase was given to these categories in last year’s base levels. A special swing of 25 per cent was proposed for quota years 2002-04 for some of these categories.

Initially, business leaders and technocrats sought additional trade benefits within textile export quota regime ranging between $140 million and $280 million. Eventually, it is now being considered that a broad understanding with the US on certain trade related issues would be more beneficial. On the basis of this understanding, Pakistan and the US could work out a free trade agreement.

For the last three years Pakistan has been trying to conclude FTAs with Sri Lanka, Bangladesh, Morocco, Kenya and Indonesia. But so far only a framework for FTA has been signed with Sri Lanka, and technical details on products are still to be drawn up.

Business leaders say that technical details with Sri Lanka are held up because of the bureaucrats involved in the negotiations.

India, on the other hand, has signed bilateral FTAs with Sri Lanka and Bangladesh and has virtually isolated Pakistan within the Saarc’s regional bloc. Saarc remains inoperative because of the unending stand-off between India and Pakistan on Kashmir.

Tariq Ikram told Dawn on Wednesday the EPB drew up a new export strategic plan about three years ago. Under this strategy, bilateral trade enhancement with the countries where Pakistan enjoys currently or has potential to grow. The strategy also stipulates enhancement of market access based on proactive and innovative management of current emerging world economic and trading blocs and bilateral trading arrangements.

The US is now the single largest buyer of Pakistani products and absorbs more than 24 per cent of Pakistan’s total exports. The EU as a bloc absorbs 26 per cent of Pakistan’s exports. Pakistan’s dependence on the US and the EU to the extent of over 50 per cent of total exports also makes it vulnerable to shocks.

Pakistan’s vulnerability was exposed in the budget when under the EU pressure domestic auto market has been opened for 1800cc and 2000cc cars. Finance Minister Shaukat Aziz admitted a possible import of 100 to 200 luxury cars from Europe for neo-rich businessmen in Pakistan in next one year.

The EPB chairman, however, pointed out that efforts were underway to diversify Pakistan’s export, both in terms of markets and products. “We have increased 29 per cent exports in Africa 35 per cent in East Europe and 15-16 per cent in Oceania Australia and New Zealand.”

Under the products diversification plan, efforts are being made to push up marketing of engineering goods, pharmaceutical and chemical goods, gems and jewellery and marble.

Leather and surgical exports have proved to be disappointing so far, but the EPB has not given up efforts.