ISLAMABAD, July 22: Pakistan's new trade policy unveiled on Thursday seeks to further liberalize foreign trade while projecting an export target of $13.7 billion and an import bill of $16.7 billion , showing a record trade deficit of $3 billion for 2004-05.

The trade policy, announced on the national hook-up by Commerce Minister Humayun Akhtar Khan, offers incentives for special economic zones, extends the facility of 25 per cent export subsidy till September 2005 and envisages inland freight subsidy on granite, marble and furniture, and allows export of imported goods without the condition of value addition.

All the schemes announced in last year's trade policy will remain in place, while the clearance date of imported machinery has been extended.

The government has also allowed import of CKD kits of motorcycles (but only by recognized dealers), as well as import of non-prohibited fur, machinery and equipment. The ban on import of certain equipment and mobile trolleys has been lifted.

The government will contribute up to 50 per cent of the cost of rehabilitating the infrastructure of existing industrial estates. For setting up an effluent treatment plant, the government will contribute 50 per cent of the cost.

The government has reduced duty to 5 per cent on the import of in-house effluent treatment plants and allowed zero duty on raw materials for local manufacturing of such plants.

A 'communication city' will be established in Islamabad to provide all infrastructure facilities to IT, telecommunication and media companies.

A 50 per cent subsidy has been restored to facilitate pharmaceutical companies for the registration of their products in foreign countries.

The government has allowed inland export subsidy at a rate of 25 per cent of freight on granite, marble and furniture provided the factories are located 250 kilometres off the exporting seaports.

A 'Suppliers Credit Fund' amounting to $10 million each is being set up to facilitate development of markets in Africa and Central Asian Republics for Pakistan's exports. The freight subsidy scheme has been extended for another year - up to September 30, 2005.

To facilitate re-export of imported goods, the condition of value-addition has been waived. In the case of re-export through land route, the requirement of payment of full duty has also been waived.

At present, exporters can send samples of non-restricted items valued at $10,000 FOB per annum. This limit has been increased to $25,000. The gift parcels' value limit has been increased to $5,000 from $1,000. These can be sent through post/courier service.

Exporting units have been facilitated by extending the last date of clearance of imported machinery from December 31, 2004, to March 31, 2005, on L/Cs opened up to June 12 under SRO 554.

Similarly, the condition for import of vehicles under GIFT and TR schemes has been rationalized.

Import of animal fur not prohibited by any international agreement has also been allowed.

The ban on import of cotton waste has been lifted. Import of betel-nuts has been linked with official certification.

Relocation of projects from abroad has now been liberalized to cover all industrial sectors. The ban on import of certain used equipment has been lifted.

Import of used fire-fighting vehicles or fire-tenders donated free of cost to municipal bodies has been allowed. Also, import of second-hand ambulances donated free of cost to charitable institutions has also been permitted.