ISLAMABAD: A high-powered government committee has proposed a range of measures to support domestic industry in maintaining rising global export orders in the wake of coronavirus pandemic that has affected China’s industrial activity since December 2019.
The government constituted an inter-ministerial Trade Advisory Committee (TAC) to analyse impact of disruption in supply chain of raw and intermediate goods from China and recommend measures to boost exports from Pakistan.
At the outset, the committee in consultation with trade officers posted at Pakistan’s missions abroad reviewed strategies that have been adopted to cope with the adverse effects of coronavirus. The countries that took immediate fiscal and monetary measures include China, Japan, South Korea, Singapore and United States to mention a few.
The measures recommended in the report released by the committee noted that the broad contours of the policy measures include reducing interest rates, support for small investors, deferment of loan payments, setting up of reserve funds, special incentives, reduction in corporate tax rate and exemptions.
The committee recommended rationalisation of regulatory duties, additional customs duties and advance sales tax on almost 62 tariff lines. These tariff lines cover raw materials of textiles, engineering, fertilisers, and pharmaceuticals.
The move will help provide relief to importers and would cover the costs of higher world prices of raw materials and additional costs of sourcing.
The committee also recommended lowering interest rate ensuring cushion to any possible damage to the export industry. Many countries have lowered their interest rates to resolve credit issues of their respective industries. The Federal Board of Revenue (FBR) should ensure immediate disbursement of export rebates to boost confidence of the export industry in the country, the committee advised.
Moreover, it was also discussed that the commerce ministry may take up the matter with Chinese government to secure an export package to help Pakistan’s export sector.
The food security ministry has advised a ban on issuance of license for import of wild animals and birds from the world for a limited time period. However, the final decision will be taken following an approval from the commerce ministry.
With the spread of coronavirus in countries bordering Pakistan as well as other countries exporting goods to Pakistan, it is advisable to adopt a uniform policy of banning imports of animals and birds, the committee noted.
It also proposed including trade financing in the Strategic Trade Policy Framework 2020-25 to ensure sustainable growth in exports. In addition, it said the Trade Development Authority of Pakistan (TDAP) should be tasked to engage private stakeholders and help find alternate sources for import of raw materials and intermediate goods other than China. For this purpose, the TDAP may also engage Chinese companies which have production houses outside of China.
The TDAP has also been tasked to submit weekly report to the committee on multiple issues concerning coronavirus and its impact on trade.
Published in Dawn, March 15th, 2020