ISLAMABAD, Aug 9: Pakistan has great potential to benefit from textile and clothing sector to further boost its exports, manufacturing and job market. This was the consensus of the speakers at a seminar on “Implications of phasing out of quota in textiles on Pakistan - a case for human development” organized by the UN Trade Initiative from Human Development Perspective, a joint project of the Ministry of Commerce and UNDP Pakistan, in collaboration with the International Islamic University on its campus here on Tuesday.

The stakeholders shared their experiences for the growth of textile sector in the country particularly with the phasing out of the quota regime early this year.

Joint Secretary Ministry of Commerce Azam Muhammad said the government had realized that textile and clothing sector offered good prospects for diversification away from the traditional commodity exports for entry into the area of manufacturers, for absorption of large pools of manpower, for crossing the big divide between the rural and urban sectors, for poverty alleviation and for gender empowerment.

He said the developed countries heavily protected their textile and clothing trade during the last five decades. He said the developed countries protected their textile and clothing sector through various short and long-term arrangements, which instigated those countries that did not have comparative advantage to develop their textile and clothing sector to benefit from these protection measures.

Now with the phasing out of quota regime, these measures have now been withdrawn which would force these countries to face new challenges in the textile market. At the same time, he said, no country would be ready to lose trade in textile and clothing, as a huge employment was associated with this sector.

Quoting the Philippines, he said though the share of textile and clothing in total exports of the Philippines was around 6 percent, its share in employment was 35 per cent.

Talking about Pakistan’s position after the phasing out of the quota regime since January 2005, Mr Azam said: “Our trade in textile and clothing has increased. It is important to mention that only 35 per cent of the total textile trade from Pakistan is actually governed through quotas, while the rest of the trade is out of the quota regime.”

The major threat to Human Development in Pakistan’s case might not be because of abolition of quota but because of various non-tariff barriers which actually restricting our trade and making us highly non-competitive.

These barriers are related to compliance, security and high protection through tariffs to a certain extent. He said for compliance, the government had introduced various initiatives in the recent trade policy.

He was of the view that free trade and preferential trade agreements could also be the cause of reduction in trade, as ‘we are exporting to the United States on 18 per cent tariff duty, while it is zero for Bangladesh and Sri Lanka’.

Same is the case for European Union market where we did not have Generalised System of Preferences (GSP) status, which India has been enjoying. He said the proliferation of Free Trade Agreements (FTAs) seemed to be a big challenge and that’s why Pakistan supported multilateral trading system.

Replying to a question on the US proposal for zero tariffs in textiles, he said, if proliferation of FTAs remained there then countries such as Pakistan may think of supporting this proposal.