KARACHI, Jan 22: Minister for Commerce Humanyun Akhtar Khan on Wednesday stressed the need for evolving a joint strategy for the next WTO round being held in Mexico in September this year. He called for developing such tools that favour various segments of trade and industry and are directly related to WTO regime.

Speaking as a chief guest at a luncheon meeting organized by the FPCCI, at Federation House, the minister asked the business community to safeguard its interest in next WTO round.

But without developing required expertise in the WTO regime, the minister said, the private sector could not safeguard its interest in the coming round. Therefore, he urged that leading trade bodies should do ‘brain storming’ over technical matters of the WTO regime and try to find out and develop tools which go in their favour.

At Doha round, he said attempts were made to remove problems faced by the developing countries under present WTO agreement, but there is a greater need to be well prepared and take up such matters after consultation with other developing countries.

The minister said that matters related to agriculture, services, trade and investment have to be taken up at the earliest for evolving a strategy for the next WTO round as a position has to be adopted at this stage or latest by March 2003, in consultation with other developing countries.

Humayun said in a meeting with the State Bank governor earlier this morning an understanding was reached to allow project financing through forex reserves.

Similarly, he said Import-Export Bank will be set up soon to give credit to export trade as well as finance such units which are fully export-oriented.

If the European Union (EU) can give subsidy on export of sugar, the minister said, “we could also evolve a strategy wherein our over capacity products such as cement, fertilizer and sugar could be exported at a competitive price in the world market.”

He said a mechanism will have to be evolved to export such products without putting a burden on the national exchequer. All these products, he said, are based on indigenous raw materials and could be good source of earning foreign exchange, he added.

The minister admitted that the port charges are on higher side and cost more to the external trade of the country. He further said that most of the shipping routes are not direct which further put burden on export goods and their cost.

In order to overcome such issues, he said a committee of experts and private sector will be set up to give suggestion to resolve such matters. However, he said, freight subsidy on new products and markets has been allowed and hoped it will help to boost exports.

He said that the government plans to set up special economic zones in line with those in China and Malaysia. Such zones he said will be provided utilities at international rates and exports will be totally free.

Referring to some of the points raised by the President FPCCI Riaz Ahmed Tata, the minister said that he had already held talks with the prime minister’s advisor on finance and it was decided that a committee will be set up with private sector representation to review the current sales tax system.

The minister admitted that there is a major flaw in DTRE Rules and it was necessary to remove them before making it acceptable to exporters. However, he stressed upon the need to bring exports under zero rate regime. He also assured the business community that till such time the DTRE issues are not fully resolved they could continue to work under other SROs presently in vogue.

Humayun also welcomed the suggestion of the FPCCI chief that the Export Development Fund (EDF) should be handed over to the private sector as the funds belongs to them.

He assured that in future there will be increased representation of the private sector in the EDF board which is chaired by the minister of commerce. But the minister also suggested that some MNAs having knowledge of export trade will also be inducted in the EDF board.

The minister was fully in agreement with Riaz Ahmed Tata’s complain that utility charges of WAPDA and KESC are crippling the export trade by making them uncompetitive in the world market.

He also stressed upon the need to improve human resource as well as technological upgradation to face the challenges of quota free regime beyond 2005. The minister said that incentive scheme will be launched wherein private sector could be given tax concessions on achieving such goals and doubling their exports.