ISLAMABAD, May 5: Pakistan has identified 41 hot-selling textile and clothing items and 30 non-textile items to be manufactured in the proposed reconstruction opportunity zones (ROZs) for export at zero custom duty to the United States.
A senior official told Dawn on Saturday that despite high tariffs, Pakistan has substantial exports in these products, therefore, these must not be excluded from the list of manufactured products in these zones.
"We have requested the US government to include maximum textile related products in these zones for duty-free entry into the US market," the official said.
Textile and clothing products identified for manufacturing in ROZs include gloves, mittens and mitts, sweaters, men's or boys trousers, bed-linen, men's or boys' shirts, women's or girls' trousers, T-shirts, garments, women fabrics, men's gloves, woven fabric, stockings, socks, quilts, women's or girls' dresses.
Other items include bleached plain weave, printed plain weave fabrics, curtains, table-linen, unbleached woven fabrics of cotton, cotton yarn, terry-toweling and similar woven terry fabrics, furnishing articles, toilet and kitchen linen etc.
Among the non-textile products identified for these zones include leather apparels, leather belts, leather apparels for sports, medical and surgical instruments, scissor, dental instruments, sports goods, precious and semi-precious stones and other miscellaneous products.
US President George W. Bush had accepted the Pakistani proposal in a meeting with his Pakistani counterpart and later in a news conference announced in March 2006 that the trade zones established in the remote areas (tribal and border) would get duty-free access on goods exported to the US market.
Under the rules of origin, Pakistan has proposed a maximum value-addition up to 20 per cent for products manufactured or processed in these zones while the remaining 80 per cent input must be allowed to be sourced from anywhere.
According to the official, the Afghan content of material was not essential for all products. Afghan value-addition may not be higher than five to seven per cent.
Separate ROZs be established in Pakistan and Afghanistan in the first phase, he added.
Pakistan has also proposed that it might be ensured that ROZs do not fall hostage to Afghan content requirements.
The ROZs proposal in both the countries might not be dependent on each other, rather it may be treated as separate entities.
The US informal position on ROZs is that if locations within the territories cannot be commercially feasible, location near the territories to be considered, and rules of origin would be framed in a manner to facilitate trade and existing incentives and regulatory structure for EPZs to be offered to ROZs.
The US is Pakistan's single largest trading partner, with volume of trade nearly at $5.8 billion in year 2005-06. The US generally has low tariff market with average tariff on manufactured goods at 3.9 per cent.
Around 89 per cent of Pakistan's exports to the US are textile and clothing items, some of which attract tariffs up to 32 per cent, though trade weighted average tariff on textile and clothing export from Pakistan is around 11 per cent.
