THE Strategic Trade Policy Framework 2015-18, announced by Commerce Minister Khurram Dastgir Khan, sets an ambitious annual export target of $35bn by 2018. He, however, did not explain the eight months’ delay in announcing the policy, why the country missed goals of the last trade policy and a roadmap for an exacting task ahead.

The STPF 2012-15, expired on June 30, 2015, aimed at increasing the exports to $95bn over three-years but realised cumulative export proceeds of $73.5bn in the stipulated period missing the goal by a wide $22bn margin.

Exports increased marginally against annual preceding three-year average of $22.8bn. It inched up to $24.4bn against the target of $31.1bn during the three-year period starting 2012.

Many businessmen reached for comments said they were still assessing the policy but generally liked the tone of the trade policy and termed it ‘supportive’.

Overseas Investors Chamber of Commerce and Industry President Shahab Rizvi acknowledged the challenging environment, sagging global economy and difficult domestic situation in which the trade policy has been announced.

“Boosting exports is a huge task even for developed economies in the wake of global slowdown and plummeting demand for goods and services. The competition grew stiffer posing a huge challenge of controlling the cost of doing business,” he said.

“The strategic guidelines to move from low- to high-end products, support for achieving standards and building brands to increase Pakistan’s share in regional trade are apt logical policy options. With Iran next door opening up, Pakistan stands a good chance of reaping rich benefits if it acts fast and plays its cards well,” Shahab commented over phone.

Rafique Suleman, former chairman of Rice Exporters Association of Pakistan, was not as optimistic as he found the policy favouring big business that is already basking in sun. “The priorities have to be set right and support should be extended to sectors under stress,” he argued.

“The government needs to be pragmatic if it wants exports to expand. No matter what they claim I don’t think exports can rise unless the currency is re-valued,” he considered the rupee value unrealistically high.

Experts, however, were not impressed. They considered the trade policy to be in variance with the global trend of liberalisation, simplification of regime and abstinence from subsidies that breed corruption.

‘Boosting exports is a huge task even for developed economies owing to the global slowdown and falling demand for goods and services’

Dr Manzoor Ahmed, former Pakistan representative at the WTO, was critical. “I wonder how they foresee input cost coming down for exportable goods and services when tariffs and all kinds of levies are increasing consistently over the past three years,” he remarked.

“The drawbacks offered on duties, taxes and levies will be pocketed by the big business as small and medium enterprises lack capacity and scale to manage claims. The subsidies are looked down as anti-competitive measures and can warrant a hostile reaction of trading partners who can clamp anti-subsidy duties,” he argued.

“Only competition forces businesses to innovate and transform, the government concessions have not worked anywhere, neither in Pakistan. No one wins a race with crutches,” another expert said anonymously.

“The perfect domination of the ministry of finance that tries to mask its weaknesses and gaps in resource generation by eroding the space of other ministries and departments leave little scope for others to do much,” he added.

Shabbir Ahmed of Pakistan Bedwear Exporters Association did not support the view. He blamed the commerce minister for falling exports. “It is his job and he is accountable for it”, he said.

Federation of Pakistan Chamber of Commerce and Industry President Abdul Rauf Alam was positive in his tone as he appreciated measures in the trade framework to support modernisation of the industry. “I do not see the policy hitting the target till duty refund issue is addressed to the satisfaction of exporters,” he emailed his spontaneous comment promising to share detailed position of the FPCCI after consulting all stakeholders. He was disappointed over absence of incentives for the textile sector.

Earlier the commerce minister in his press conference spoke of government’s vision of commercial diplomacy anchored on boosting export by improving competitiveness, moving from ‘factor to innovation-driven’ economy and increasing Pakistan’s share in regional trade.

He counted multiple sectors (leather, pharmaceutical, fisheries and surgical) where the government would support innovation by small and medium enterprises.

The policy has flurry of incentives for rewarding businessmen who perform well in global market. For making non-textile value-added products competitive on global markets, exporters of selected sectors would be entitled for drawback for local taxes on FOB [freight on board] value of exports if pushed up by 10pc over the last year.

A total spending of Rs18bn has been projected over the planned period. For the current fiscal year a funding of Rs6bn has already been approved.

The minister stressed local brand building for fetching better returns. He mentioned surgical instruments, sports goods and cutlery manufacturers who have primarily been supplying to foreign brands at low prices.

To cut down on wastages and supplement incomes of farming community by increasing the export potential of agri products a special scheme has been announced under which importers of new plants and machinery will be entitled for 50pc support in cost in general and 100pc mark-up in cases of under-developed regions.

The trade diplomacy will pursue multilateral, bilateral and regional arrangements simultaneously. Rice, horticulture, meat and jewellery are projected as

key products that have high export scope in Iran, China, Afghanistan and the European Union.

Published in Dawn, Business & Finance weekly, March 28th, 2016