September 7, 2003	Sunday	Rajab 9, 1424

LAHORE: “WTO? Oh, phasing out of textile quota!” It is how most businessmen in Punjab react to questions about the possible impact of the WTO regime on their businesses and export. It also reflects the level of preparedness to meet the challenges that the post-WTO era is going to pose to exporters.

They just don’t seem to realize that post-WTO era is not about phasing out of textile quota from Jan 1, 2005 alone; there is a lot more to it than that.

“What most people don’t realize in Pakistan is that the buyers are going to dictate their own terms on the compliance issues and matters relating to labour, environment, etc. For instance, it is going to be the buyers who’d determine how many toilets a factory needs to have for its work force,” said Ms Huma Fakhar, an expert on WTO laws, while speaking to Dawn.

She feared that small and medium enterprises (SMEs) were going to suffer directly because of the tariff and non-tariff walls that the importing countries were seeking to build in the post-WTO era (to protect their own commercial interests).

“It is the area where the immediate government intervention is desirable in order to support the SMEs against the new walls,” Ms Fakhar said. She said the SMEs could never fulfil the compliance requirements of their buyers for being very costly. “If a company is making five products, it will be required to obtain as many echo labels for them, costing it Rs2.5 million annually. The US security concerns require proper security arrangements both at the factory premises as well as at the time of loading and unloading of consignments for that country. The costs are too big for the SMEs to bear. The government must intervene,” she insisted.

It is pertinent to mention that areas like Gujranwala, Gujrat, Wazirabad, Faisalabad and Sialkot where small units are clustered lag far behind cities like Lahore in preparing themselves for the post-WTO period.

“It is due to lack of awareness and smaller size of the businesses. Even if somebody wants to do something in this respect, he cannot because of the very high costs involved,” said a former president of the Sialkot Chamber of Commerce & Industry. He said Sialkot was a little bit “better” prepared than other SME clusters only because “our buyers have been forcing us to do this and do that in the last few years.”

“Had it been left to the government or the exporters alone, we would not have achieved whatever little bit we have on compliance issues,” he maintained.

Ms Fakhar said most of the difficulties would be faced by the textile sector that contributed more than 65 per cent to the country’s total exports. Other sectors, like automobiles, would not feel much impact of the walls being erected by the buyers because they were not much into exports. But, she said, the farmers would have to improve the quality of their products as well as its packaging if they wanted to compete in the international markets.

Ms Fakhar agreed that the post-WTO era would also bring untold opportunities for Pakistan’s exporters, especially in the textile sector. “Sky is going to be the limit for exporters.”