July 19, 2006	Wednesday	Jumadi-ul-Sani 22, 1427

ISLAMABAD, July 18: Commerce Minister Humayun Akhtar Khan on Tuesday linked the highest ever trade deficit in the fiscal year 2005-06 to overall economic policies of the government, saying the trade policy was one part of it.

Addressing a post-trade policy press conference, the minister said trade deficit might record some reduction during the fiscal year 2006-07 as a result of certain measures taken and possible stability of oil prices in the international market.

Mr Khan said besides high import bill of oil, the increase in import of cars through bank credits also pushed up the import bill during 2005-06. He said $28 billion import bill was a realistic target.

When asked that this year the projected growth in exports was less than last year, the minister said there were some conservative elements due to which the growth target was set less than last year. However, the minister did not elaborate on those hindrances.

In reply to a query, Mr Khan said market forces determined the value of rupee. The minister was of the opinion that increasing interest rates resulted

in a surge in cost of doing business. It is believed that the commerce ministry is pushing for devaluation of the rupee to bridge the gap of widening trade deficit.

Answering another question, the minister said the expansion of positive list for trading with India was an ongoing process. The proposed lists would be taken to the ECC meeting for consideration. Mr Khan said there was no plan under consideration to add the import of used machinery or parts to the positive list.

The minister said an inter-ministerial committee headed by the deputy chairman of the Planning Commission had been constituted to prepare a strategy for enhancing competitiveness and production surplus to increase exports.

The committee, he said, would interact with all the relevant ministries and departments and formulate a short, medium and long-term industrial strategy. The minister said the committee had also been asked to exploit the efforts under Doha agenda negotiations made by the government to boost the agriculture sector and its competitiveness internationally.

In reply to a question, Mr Khan said the cost of production would be to some extent met through the revised refinance scheme, particularly capital cost announced recently.

The minister said a new organisation Trade Development Authority of Pakistan (TDAP) would be established through an act of parliament. He said the authority would be supervised by a policy board chaired by the commerce minister and its members would represent both public and private sectors.

The minister said the proposed expo centres would be established through funding received under the PSDP. He said the government would prepare draft legislation enabling the private sector to effectively participate in the national effort to achieve rapid economic growth.

The minister said Trade Ordinance, 1961 had been revised in consultation with various trade bodies and associations and added that his ministry would prepare the draft legislation.