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US withdraws ROZs offer

November 10, 2012

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ISLAMABAD, Nov 9: A preferential status in the US market under the Reconstruction Opportunity Zones (ROZs) will not be available to Pakistan as US administration has shelved the proposal.

In the presentations submitted to the National Assembly Standing Committee on Commerce, the Ministry of Commerce has confirmed that after more than six years of negotiations on the subject, the US authorities in August this year withdrew the offer.

The US has, however, proposed an alternative to this arrangement, sources said.

“The proposed incentive package by the US is to establish a working group on trade and investment matters of bilateral interest, under Pakistan-US Trade and Investment Facilitation Agreement (TIFA) Council,” the ministry’s summary to the NA body said.

The summary is expected to be discussed in the next meeting of the committee which is not yet scheduled.

However, the summary said that the US has proposed that Pakistan may suggest a set of enhanced trade market access proposals, which the said working group would discuss and evaluate, and subsequently recommend to the US Administration.

Both the countries have been negotiating the proposal for establishing Reconstruction Opportunity Zones (ROZs) since 2006 to grant import concessions for products manufactured in industries in terror-hit areas of Pakistan.

“The US administration has failed to get the relevant legislation approved, required for establishment of ROZs,” the Commerce Ministry said.

It, however, added that in order to provide Pakistan enhanced trade market access, Pakistan and US have decided to set up a working group on trade and investment and formation of this group would be finalised through exchange of diplomatic notes.”

It has been highlighted that the United States Trade Representative (USTR) South Asia Office will prepare a set of proposals for grant of enhanced trade market access to Pakistan.

The USTR proposals would be shared before the working group on trade and Investment is set up, the summary to the NA body said.

The idea of setting up ROZs in terrorist-infested northern areas was circulated to boost economic opportunities in under-developed tribal belt to bring young peple of the area in the ecnomic mainstream.

It was projected to deal with the issue of militancy in the area by providing employment opportunities to poor people of the area.

The US authorities at that time had announced that to compensate for the losses suffered by the people in bordering areas of Fata due to war on terror, RZOs would be established which would also provide economic support for the losses suffered in the war campaign.

The ROZs project had focused on strengthening Pakistani capability in both private and public sector to plan, design, regulate and manage viable Special Economic Zones in some of the most challenging environments in Pakistan.

There were nine locations proposed for ROZs: Peshawar Industrial Estate, Mallagari Industrial Estate (proposed), Mardan Industrial Estate, Gadoon Aamazai Industrial Estate, Nowshera Industrial Estate, Risalpur Economic Zones, Yaka Industrial Estate (proposed), Shakas Industrial Estate (proposed) and Kohat Industrial Estate.

While the US had proposal that areas adjacent to Fata be included into proposed ROZs package, which would mean duty-free imports for goods produced in areas into the US.