ISLAMABAD, July 16: The government is likely to replace Foreign Trade Institute (FTI) with Trade Competitiveness Institute of Pakistan (TCIP) for carrying out policy research studies for enhancing the country’s exports.

Informed sources told Dawn on Monday that a formal decision in this regard had already been taken and was expected to be announced in the Trade Policy 2007-08, which is due to be unveiled on Wednesday.It has been observed that the FTI established in 1989 has failed to conduct any quality research and information on multi-pronged trade and globalisation issues. The domain of the institute was only confined to an average centre providing some training to new officers of the commerce and trade.

The sources said that in addition to conduct policy research on all key aspects of trade competitiveness, the TCIP would be premier body for capacity-building and human capital development on commerce.

It would also provide an important forum for the discussion and dissemination of information on issues of commerce. A PC-1 costing Rs130 million has already been approved by the Planning Commission for the new organisation, added the sources.

Though the government had also announced the restructuring of the National Tariff Commission in the last year trade policy but no practical steps has so far been taken for implementing its decision in letter and spirit.

The sources said that another milestone of the upcoming trade policy would be the announcement of the trade competitiveness indicators, which have been developed to quantify and internationally benchmark the cost of doing business in Pakistan.

The competitive indicators take into account the financial, economic and regulatory factors including interest and exchange rates, public service provisions, legal framework, business environment, human resource and technology for measuring comparative advantage and technological readiness.

The indicators also take account of law and order, and socio-economic amenities to assess the added burden to the cost of doing business. These indicators are under constant review of the commerce ministry so that they could become basis for meaningful policy recommendations and interventions.

These indicators were developed following carrying out of 10 studies on domestic commerce.

The research studies indicate that trade facilitation measures could reduce exporters transaction cost by up to 30 per cent in developing countries. Pakistan is needed to gear up to facilitate national trade through systematic simplification and standardisation of procedures and improving transport logistics.

Another important factor is the implementation of the National Trade Corridor for improving the transportation logistic chain on the basis of identified inadequacy and weaknesses.

It is envisaged that the national trade corridor improvement programme will improve the country’s share of world trade from 0.2 per cent to 1 per cent by 2030 and increase export from $17 billion in 2006 to around $250 billion by 2030. The programme is expected to be implemented in five years with donors’ assistance.