KARACHI, July 22: Business and industry, with a cautious note, appreciated the measures in the Trade Policy 2004-05, announced on Thursday by the Minister for Commerce Humayun Akhtar Khan.
There was consensus that these steps are bound to promote exports, provided implemented in letter and spirit.
The business leaders told Dawn that measures suggested in the new trade policy would be helpful in facing the challenges in the post-quota period starting from 2005. However, it was generally being feared in the last trade policy most of the measures were not implemented.
The president, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Riaz Tata said that there was some good changes in the new trade policy but, he said, he would give his full comments once he went through the entire text.
He said that it was bound to promote exports but he would be in a better position to give is full comments after consulting his colleagues and FPCCI's managing committee members.
"The export target with 12 per cent growth at $13.7 billion is easily achievable particularly when there would not be more quota restriction for textiles, which are our major exports," Dr Ikhtiar Baig, former vice president of FPCCI said.
The chairman, All Pakistan Textile Mills Association (Aptma), Waqar Moonno said that overall the new policy was good but it has not given enough strength to the largest export sector i.e. textile. The reduction in duty drawback on polyester was bound to discourage exports.
Mr Moonno said that around 25 to 30 per cent of textile exports were based on polyester but reduction in drawback rates would also have adverse impact on overall textile exports.
However, Fawad Ijaz Khan, the chairman Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) said, "I feel that most of the measures announced in the Trade Policy 2004-05 are of last year." He said even in the last trade policy there were long-term planning, which could not be implemented.
He said that only those policies should be announced, which could be implemented and are also achievable in a given time-frame. Mr Fawad even doubted that announcing such mega projects as rehabilitation's of existing industrial estates, funding of display centres aboard and subsidising brand names and warehousing would need huge funds.
The minister suggested that most of these projects would be funded from Export Development Fund (EDF), if it was so, he said then what would be the fate of existing and on-going export promotional activities, which are already consuming huge funds from the EDF.
Dr Ikhtiar Baig appreciating the announcement that the government would protect Intellectual Property Rights (IPR) said this would attract foreign investment, which had been reluctant so far because IPR was not defended. He said that assurance in the policy to honour arbitration treaties would also go a long way in attracting foreign investment.
The new trade policy, he said, focused on market access by entering into multi and bilateral agreements. The support to Small and Medium enterprises would give growth to production base and generate employment.
Former chairman Pakistan Bedwear Exporters Association (PBEA) Shabir Ahmed hailed the trade policy and said that permission to import combined effluent treatment plants on 5 per cent duty and in-house effluent plants will help the industry meet the post-quota challenges of social compliance's.
He said the minister had taken care of those issues, the export-oriented industry was going to confront in the WTO regime starting from 2005. Payment up to 6 per cent on mark up from EDF on such plants would lessen the burden on export-oriented industry and help ease its liquidity.
The chairman, Advisory Board of Korangi Association of Trade and Industry (KATI) Manzar Alam said removal of sales tax from cotton was a good measures but suggested that cotton yarn should also be exempted from Sales Tax.
While appreciating the rehabilitation of existing industrial estates from federal and provincial governments, he said the condition of 15 per cent funds to be raised by the industry for the purpose was not acceptable. Manzar Alam said when business and industry pay their taxes, then such payments were unjustified. He said it was the duty of the government to provide infrastructure to the industry.
Former President FPCCI Tariq Sayeed termed the Trade Policy 2004-05 as excellent and said it provides incentives in almost all fields of trade, particularly exports and imports.
He said that it focuses on issues which are going to be confronted by export-oriented industry in the post-quota era from 2005. It provides incentives and concession in form of subsidies to warehousing, display centres abroad and brand names which are essential tool to face the free market challenges.