KARACHI, Aug 30: The government has asked the Export Promotion Bureau (EPB) to cap quota allocation placed on the first-cum-first-served (FCFS) basis from August 15, 2004, and onwards.

In an office memorandum issued on Monday - August 30, the ministry of commerce (MoC), too, decided to place the advance reservation quota on post-shipment basis. Referring to the EPB's letter No 1(1)/TCD= 2004, dated August 22, 2004, the MoC has pointed out that the EPB may cap the usage of clothing categories. The capping or the limit for the European Union (EU) categories 4, 5 etc., has been fixed at 1,500 dozens an exporter, per month.

The Bureau, for fabric and towel categories which may include category 363, category 9 and fabrics, EU 2-A, has been asked to cap or fix the limit to a single container per exporter in a month.

The ministry has specifically pointed out that all decisions have been taken as determined by the EPB in consultation with the Quota Supervisory Council (QSC), and the respective trade bodies.

With regards to the placement of advance reservation quota, the ministry has decided to place this on post-shipment basis as suggested by the EPB in its letter, and in those categories where pro-rata advance reservation would not form the economic unit for exports (Cat 2-A, 4,5,6, 363 etc.).

The EPB's Textile Quota Management, through a public notice on August 11, offered quota allocations to the US, Canada, the EU and Turkey categories on the FCFS basis effective August 15, 2004, and onwards.

Exporters reacted harshly to it on the grounds that this would benefit only the barons, and deprive the genuine and needy ones. Row between the EPB and the exporters' bodies took a serious turn, particularly when the QSC-Member Tahir Jahangir too, expressed dissenting views at the allocation method adopted by the TQM.

Giving his views from Lahore, Tahir Jahangir said Dawn that the MoC directive itself was a proof that the original quota allocation plan of the FCFS was wrong.

In support to his argument he stated that the booking of cargo for a leading shipping line on 15th and 16th of this month, will go a long way in proving that there were plans to block the booking to avail the quota on the FCFS basis. He regretted implicating the ministry in the issue.

Patron-in-Chief of the Pakistan Towel Manufacturers Association (TMA), S.M.A. Rizvi said that this would further create confusion as exporters who already have shipped the goods might be asked to adjust the extra quota from their own resources.

He further asserted that this would mean that the genuine exporter will suffer again by adjusting the original quota. He stressed that the term 'post shipment' used by the MoC in the memorandum was 'vague'.