ISLAMABAD: Commerce Minister Khurram Dastgir Khan on Tuesday announced the medium-term (2015-18) Strategic Trade Policy Framework, setting an annual export target of $35 billion by the year 2018.
The framework, the first announced by the current government, will be implemented with a total funding of Rs18bn in a period of three years.
Four major targets include: boosting exports, improving export competitiveness, transition from factor-driven economy to efficiency-driven and increasing share in regional trade.
The minister defended the export target saying it is realistic and achievable. For current fiscal year, the government has already approved an amount of Rs6bn. The minister said this amount will be disbursed among exporters through the State Bank of Pakistan (SBP) to avoid chances of corruption.
To increase the sophistication level of identified sectors including fans, home appliances, rice, cutlery and sports goods, an incentive for technology up-gradation will be provided in the shape of investment support of 20pc or mark-up support of 50pc up to a maximum of Rs1 million a year per company will be available for import of new plant and machinery.
To boost exports of leather, pharmaceutical, fisheries and surgical instruments, grant of up to Rs5m will be provided for specified plant and machinery or specified items to improve product design and encourage innovation in small and medium enterprises (SMEs).
Moreover, a Common Facility Centre for surgical sector will be established.
Matching grant will be provided to facilitate the branding and certification for faster growth of the SMEs and exports sectors through Intellectual Property Registration (including trade and service marks), Certification and Accreditation.
The manufacturing in surgical instruments, sports and cutlery is largely done under the brands of foreign companies, resulting in lower prices for manufacturers in these sectors.
For cutting the cost of doing business and increasing the competitiveness of the value-added non-textile selected sectors, draw-back for local taxes and levies will be given to exporters on free on board (FOB) values of their enhanced exports if increased by 10pc and beyond (over last year’s exports) at the rate of 4pc on the increase.
To reduce the wastage of raw and semi-processed produce and increase income of the farmers and foreign exchange earnings, 50pc support on the cost of imported new plant and machinery for specified under-developed regions or 100pc mark-up support on the cost of imported new plant and machinery will be provided.
The Ministry of Commerce will continue working on its three-pronged strategy of trade diplomacy in the multilateral, regional and bilateral arenas for increasing market access.
Under the policy, four products including basmati rice, horticulture, meat and meat products, and jewellery were identified for focused markets — Iran, China, Afghanistan and the European Union.
Regarding the auto policy, the minister said his ministry would take up the issue of used car imports in the Economic Coordination Committee (ECC) meeting. He, however, said the new policy encouraged exports of automobiles which was currently negligible.
The minister said that restructuring of Trade Development Authority of Pakistan has already being started. The regulatory measures announced in the policy are that the condition of submission of annual environment report is not applicable in case of units importing plastic scrap for the first time.
Pyrolysis plants, which are duly registered with respective EPAs and the Federal Board of Revenue (FBR) are also allowed to import shredded tyres scraps on the same terms and conditions as are applicable to industrial consumers.
Import of aerial vehicles and night vision goggles will be subject to no-objection certificate (NOC) from the Ministry of Defence. Import of 3D printers will be subject to prior permission from the Ministry of Interior.
Import of mobile hand-sets and tablets will be subject to type approval certification from the Pakistan Telecommunication Authority (PTA), Pakistan Security Printing Corporation was allowed import security papers without having NOC from Security Papers Limited.
Exporters operating under various schemes like Duty and Tax Remission Scheme (DTRE), Temporary Importation, etc will be allowed to import all items borne on restricted list subject to fulfilment of conditions laid down in Import policy order.
Construction companies will be allowed to import specialised vehicles mounted machinery not older than five years subject to certification from pre-shipment in the exporting country and submission of original equipment manufacturers confirmation that such vehicles are built as specialised mounted machinery.
Import of pesticides will be allowed subject to prior pre-shipment certification issued by recognised pre-shipment and inspection agencies to be notified by the Department of Plant Protection.
Digital Enhanced Cordless Telecommunication 6.0 will not be allowed to ensure compliance with the provisions of the PTA Act, 1969, ban on import of poultry and poultry products from South Korea, Russia, Kazakhstan, Mongolia, Turkey, Greece, Croatia, Italy, Azerbaijan, Ukraine Iraq, Bulgaria, Slovenia, Slovakia, Austria, Bosnia and Herzegovina was lifted subject to certification from respective veteran authority of the exporting country that birds are only from such flocks where no incidence of bird flu has been reported for the last seven years.
Import of plug wrap paper will also be allowed in favour of manufacturers of cigarettes rods duly registered with the FBR. Import of two- or three-wheeler auto vehicles will be subject to compliance with the condition of Euro-II standard.
Import of mercury and mercury compounds will be allowed to industrial consumers having valid environmental approval from the concerned Federal/Provincial Environmental Protection Agency/Department.
Fireworks will now be placed on the restricted list and its import is allowed subject to the conditions of compulsory physical examination by explosives expert. Furthermore, the Department of Explosives of Ministry of Industries will allow import only to the applicants and companies having valid licences under the Explosives Rules, 2010.
Import of air-pistol and slugs was also allowed.
Published in Dawn, March 23rd, 2016