ISLAMABAD, July 21: Pakistan’s trade policy for the year 2005-06 unveiled on Thursday seeks to further liberalize foreign trade while projecting an export target of $17 billion and import bill of $21.79 billion, leaving a yawning trade deficit of $4.79 billion. The trade policy, announced on national hook-up by Federal Commerce Minister Humayun Akhtar Khan, offers incentives for diversification of exports, increased market access, and trade facilitation.

Under the new policy, a Rapid Export Growth Strategy (REGS) is to be adopted for increasing exports. A garments package is to be extended in the form of Research and Development (R&D) support at the rate of 6 per cent up to June 30, 2006, to protect Pakistan’s garments industry from a potential loss of US $400 million in exports and 500,000 jobs in the SME sector.

The policy also offers a new package for export of gem and jewellery and development of footwear sector.

The government has announced establishment of new land customs stations at Qamar-ud-din Barez in Balochistan to enhance trade with Afghanistan and simplification of verification procedure for export consignments to the landlocked country. Exporters have been allowed to claim duty drawback on the basis of the copy of import clearance documents issued by the Afghan customs authorities across the border.

To remove an existing anomaly in the Pakistan-Afghanistan trade regime, items in the negative list of Afghan Transit Trade (ATT) will not be allowed to be re-exported from Pakistan.

Amendments have been made to the three schemes for Pakistanis residing abroad — gift, personal baggage and transfer of residence – in order to facilitate them in the import of used vehicles. Under the gift and personal baggage schemes, vehicles up to three-year-old can now be imported instead of two-year-old, as was the case up to now.

Besides parents, husband, wife and children, brothers and sisters have also been made eligible to benefit from the gift scheme. “It will no longer be required that the vehicle be registered in the name of the Pakistani national prior to its import under the personal baggage or transfer of residence scheme,” the commerce minister said.

Overseas Pakistanis holding Pakistan origin card will also be eligible to import vehicles under the gift, personal baggage and transfer of residence scheme.

The import of two- and three-wheeler auto vehicles has also been allowed subject to one-time certification of each model by the Pakistan Standards and Quality Control Authority (PSQCA) that the vehicles conformed to the prescribed Pakistani standards.

The government has allowed concessional rate of withholding tax on services of stitching, dying, printing, embroidery and washing, provided to exporters and export houses by various enterprises.

The garment factories will be able to operate seven days a week and increase the daily working hours. Women labour working for long hours will have to be provided transport.

Full-time prosecutor and presiding officers will be appointed for the two commercial courts, one each in Karachi and Lahore.

Pharmaceutical exporters to a country with duly registered products will be provided funds for the salary of three medical representatives for a period of two years at the rate of US $500 per medical representative per month. For designated high cost countries, this support will be 30 per cent higher.

In order to facilitate exporters, 75 per cent of the certification cost of the internationally accepted laboratories, verified by the Pakistan embassies concerned, will be paid for by the Export Development Fund (EDF), with the maximum amount fixed at US $2000 per certification.

The government has decided that 50 per cent subsidy on cost of certification of EUREPGAP — necessary for agricultural exports to the EU — may also be allowed in addition to the various other certifications like ISO-14000, ISO-17025, HACCP Certification, WRAP Certification and ECO Labeling.

Exporters who register their products with Pakistani trademark in foreign countries for export purposes will be provided subsidy equal to 50 per cent of official fees of such registrations.