KARACHI, March 26: Business leaders have asked the government to set up a permanent ‘think-tank’ or experts’ cell in the ministry of commerce which could hold negotiations at world level and safeguard country’s share in world market. There is general consensus amongst business community that the Ministry of Commerce has failed to protect country’s interest particularly in post-quota regime and instead Pakistan enter the free market era with a punitive duty on its bed-linen. “We need negotiators who have full knowledge of world trade laws and are intellectually so high to foresee the ramifications and repercussions before finalizing a deal,” observed Farooq A Sumar a leading exporter of bed-linen to Europe.
The body should have private and public sector representatives and its only term of reference should be to take up world trade negotiations to safeguard and protect country’s global market share, he added.
Since Pakistan has an edge in home textiles, it has retained market share as it was being anticipated that China would sweep the world market, Sumar maintained. “European Union cannot ignore Pakistan which has around 25 to 30 per cent share of home textiles in European market but it remains to be seen whether the market share would increase any further,” he remarked.
Since we have mismanaged with the EU while dealing on market share in post quota era resulting in imposition of anti-dumping duty on bed linen at 13.1 per cent there is increasing realization amongst exporters that there should be a sort of permanent experts cell which could deal on such technical issues at world level.
Mr Sumar said that the government failed to take stand and despite their repeated suggestion for taking the anti-dumping issue to WTO appellate body but it was rejected on the ground that the decision would take two years. Now you can see that we have already wasted one year and the duty was still there, he asserted.
He said every issue have two dimensions, political and administrative but we initially kept pursuing the matter at administrative level and then after wasting a lot of time took up the matter at political level. Sumar said in 2003 we asked the ministry to take up the matter at President Pervez Musharraf’s level but it declined and argued that the matter was too small to be taken at such a high level.
After wasting a lot of time, he said, the President was asked to take up the matter at his level with his counterparts in the Western world. This resulted in immediate announcement from the European Commission (EC) for the review of anti-dumping duty.
But no progress was made since then because the EU’s bureaucracy had already set its mind and now only dragging the matter to see it complete five years period.
On the contrary, he said the EU has made amendments in their laws to accommodate India for incentives and greater market access. This all depends on how effectively and timely lobbying is done.
Pakistan Hosiery Manufacturers Association (PHMA) chairman Aslam Karsaz said the apparel industry of Pakistan is the weakest link in the entire textile chain and if the government does not come forward and salvage the industry by reducing its cost of production it will ultimately close down.
Countries like Bangladesh and Sri Lanka are much better placed in apparel industry and are earning higher price. He said the biggest problem the value-added industry is facing in Pakistan is high cost of electricity, General Sales Tax (GST) and cost of adhering to compliances. He said the value added industry and exporters did not benefit from lower cotton prices because they are even today getting yarn at high price.
He said when cotton was as high at Rs3500 per maund last year the yarn prices were the same which they are paying today. So there is hardly any benefit from lower cotton prices to exporters of made ups.
The government had been repeatedly saying that incentive package was being announced but it seems that government would announce these incentives when “we would have lost all our foreign buyers.” Mr Karsaz said that China is giving 14pc rebate to its value-added textile industry.
Pakistan Bedwear Exporters Association (PBEA) chairman Shabir Ahmed said that today our competitors are getting large quantities of yarn from Pakistan at cheaper rates. He said the government should withdraw incentives given on export of yarn and instead reverted to local sales so the spinners are compelled to look towards local market to ensure cheap and sustained supply of yarn to local value added industry.
Farooq A Sumar said that in front of 13.1 per cent anti-dumping duty and 12 per cent customs duty we could not compete with other nations. However, he said so far we managed to survive on account of cheap cotton available this season which gave us 10 per cent cushion and some part of this was created by cutting our own profits which are ultimately going to damage our long term planning in term of BMR and expansions needed in future.
