KARACHI, March 8: The country would not be able to compete in quota free regime if necessary measures needed towards increasing productivity of textile and clothing sector along with reducing infrastructure and power cost and rationalization of tariff were not adopted.

These and other suggestions have been made by the World Bank in its recent report on "Textile and Clothing Policy Note: Implications for Pakistan of Abolishing Textile and Clothing Export Quotas."

It further stated that Pakistan is more vulnerable to quota regime as more than 60 per cent of the textiles and clothing exports is towards quota countries, therefore, this dependence needs to be directed at the earliest to free trade zones.

This is only possible if the atmosphere needed for such a change as outlined by World Bank study is created. This could be achieved by making immediate moves to increase the productivity of the textile and clothing sector by reducing the cost of infrastructure and power and by improving the situation of law and order.

The WB study goes on to advice that this should be accompanied by industry specific actions. India and China both have a policy to export their materials to those countries posing no threats to their value-added industries.

The WB study states that "on an average, Pakistani producers of these goods currently face lower export tax equivalents than do exporters in competing countries..." The result will be that abolition of quota will make the products of rival countries more price responsive as the removal of quota costs will be lower for Pakistan than other countries which will give them a better margin and ability to compete.

The report states that Pakistan faces tough competition in textile made-ups from China and India apart from Vietnam and Turkey and in some categories the similarity of products goes up to 90 per cent (towels) with China or in case of shirts and trousers 73 per cent with China and 84 per cent with India.