KARACHI, June 14: Commerce Minister Humayun Akhtar Khan said on Saturday the United States had offered Trade and Investment Facilitation Agreement (TIFA) to Pakistan, which was a first step towards Free Trade Agreement (FTA) with the US.

Briefing the reporters about his recent visit to the US, Mr Humayun said the singing of TIFA during President Pervez Musharraf’s next week visit to the US would lead to FTA between the two countries.

The commerce minister said that on bilateral basis Pakistan had offered the US a status of preferential tariff, which should be on reciprocal basis. However, he said it was easy to get aid and grants from developed countries, but it was very difficult to seek tariff concessions from them.

The matter related to tariff concession, Mr Humayun said, was considered to be a political issue and needed approval from the Congress because it directly affected their industry and employment market.

He said that during his meetings with the US secretary of commerce and trade representative the issue with regard to market access was also raised. He said they were informed that a market access of $143 million given in 2001 did not benefit Pakistan exports, and only a benefit of $20 million was made.

Consequently, the minister said the US officials were asked to allow extra flexibility quotas and configuration of other fast moving quotas, which could be of some benefit to the exporters.

The minister was fully satisfied with the achievements made out of market access given by the European Union and said at present 70 per cent of “our products exported to the EU member states are on zero base tariff and as a result of this the country benefited around $400 million in exports.”

Referring to the forthcoming trade policy, the commerce minister said the document would carry new vision to suite the fast changing global market.

Mr Humayun said in 1995, Pakistan became a member of World Trade Organization. However during the next WTO round in Doha, he said, Pakistan would strive hard to gain tariffs on industrial, agriculture and non-agriculture products.

Along with these efforts, he said, promotion of regional trade and entering into FTA with Bangladesh and Indonesia were also being made as both the countries had been offered to enter into this arrangement with Pakistan.

Responding to a question, the minister said some issues had remained unresolved with Sri Lanka over the FTA, particularly with regard to access to agriculture sector. But the minister hoped that these would soon be resolved because Sri Lanka was the most open market of the region.

Denial by the EU of extra flexibility quota last year, he said, had created some problems, and in order to avoid repetition of the situation the Ministry of Commerce was taking extra care. The minister added the EU had committed to allow extra flexibility quota for 2002 and 2003 if no over-shipment were made during the current year.

The minister said that there was a radical change in the utilization policy of the Export Development Fund (EDF), which would now be used in the development of human resource, making manufacturing sector competitive and in adhering to international compliance by exporters.

The EDF will also be used in developing new markets and brand names. “It will have direct contacts with foreign buyers because without aggressive marketing our exporters will not be able to face free market challenges after year 2004,” the minister added.

When the commerce minister’s attention was drawn towards difficulties being faced by exporters in meeting local compliance and are being harassed by such agencies like the Social Security, the Labour Department and the EOBI, he said all efforts were being made to evolve one-window facility.

The minister said the country had crossed the psychological barrier of $10 billion in exports and now it could move faster to achieve higher export targets.