LAHORE, Oct 20: Conceding that the cotton prices in the country were higher than the international market, Commerce Minister Abdul Razak Dawood on Saturday said the government had decided to remain “stick to its existing support price of Rs780 per maund for the time being.”

Speaking to the textile millers here at the All Pakistan Textile Mills Association office, the minister said he had discussed with President Gen Pervez Musharraf the high cotton prices, he had asked him to consult the stakeholders to find a viable solution to the issue.

He said the existing support price was fixed in consultation with Aptma and cotton growers a few months back, and at that time it looked quite reasonable. But the situation changed in the later months, and the cotton prices declined in the world markets sharply, making the local cotton more expensive.

Dawood said he was away from the country when the Trading Corporation of Pakistan was asked to intervene in the cotton market, and it was given the export target of one million bales to shore up the falling rates in the domestic market.

He said the government had intervened in the market to ensure that the prices did not fall to a level where the growers started feeling uncomfortable. However, he said, he would talk to the growers some time next week to find out a viable solution to the problem.

Dawood said the September 11 had played the role of catalyst in the removal of tariffs and increase in the textile quota by the European Union. He said the total impact of the enhancement in the quota would be 24 per cent from January 1, 2002 due to the very fact that the recent increase was over and above the annual growth in quota. He said the EU decision would also impact on the Pakistani exports of rice and engineering products to Europe.

He urged the exporters to increase the utilization of quota in the items where they were not doing well. He said Pakistan could enhance its exports to the EU immediately because the quota was raised in items where the exporters already had additional capacity and could raise their production without any further investment.

He said a committee had been formed to devise a formula to allocate the additional quota. But, he said, would like to see that small manufacturers, new exporters and manufacturers having joint ventures with the EU countries were allocated a major share in the additional quota available with the country.

The minister warned the exporters against dumping the items from which tariffs had been removed in the EU countries. He said if anti-dumping duties were imposed on any item, the tariffs removed by the EU would be restored immediately to the present level.

He admitted that the EU had allowed tariff concessions under the GSP system, and asked Pakistan to reduce its customs duties to 25 per cent from the present 30 per cent from the next financial year under the WTO. It meant, he said, the EU could review its decision any time after one year and withdraw the concessions. However, Pakistan would not be able to raise the duties in any case.

Dawood said Pakistan was now focusing to increase its market access to the US, Australia, Canada, and Japan as well as to seek trade and tariff concessions from them. Furthermore, he said, talks were also going on with Sri Lanka, Bangladesh and China. He said the American trade officials were arriving here on Sunday for talks with Pakistan on market access to the US.

He said finance minister Shaukat Aziz would shortly leave for Japan to seek debt relief and fresh funding from there in the light of Gen Musharraf’s telephonic talk with the Japanese prime minister. He said Japan had agreed to establish a line of credit for import of machinery by the Pakistani industry as well as to allow concession in the import duties.

He said the president would discuss the issue of greater market access to the Pakistani exports to China during his scheduled visit to Beijing on December 20.

Speaking about the recently imposed war risk surcharge imposed on shipments to and from Pakistan, the minister said a three- member team of international lawyers and underwriters from London would arrive here on Monday to visit ports and meet different government trade agencies to prepare its report on it.

He said the visit would help remove the war risk insurance as was done in the case of Sri Lanka some time back.