Nine institutional initiatives have been provided in the Strategic Trade Policy Framework 2012-15 to promote domestic commerce.
Despite having a share of over 30 per cent in GDP, domestic commerce has so far been under weak state focus though foreign trade is built on its strength and efficiency.
The new policy has three major parts. The first part consists of the interventions aimed at strengthening existing trade related institutions and seeking to establish missing institutions. The second part identifies fifteen sectors for cash subsidy and the third relates to easing of doing business.
The policy was delayed and much of its success would depend on how effectively it is implemented. Finance Minister Dr Hafeez Shaikh and Deputy Chairman Planning Commission Dr Nadeem Ul Haq have changed the focus of trade policy from cash subsidies to improving institutional governance, streamlining regulatory framework and strengthening the linkages between international trade and domestic commerce.
After the 18th amendment, the role of provincial government has also become very important specially in the field of domestic commerce. Despite this, provinces were not involved effectively in formulation of the policy framework. However, it has been decided to make appropriate amendment in Rules of Business, 1973 to specifically mandate ministry of commerce to promote domestic commerce in collaboration with other ministries, provincial and local government.
A domestic commerce wing in the ministry of commerce will be set up comprising two units — Domestic Commerce Unit and Trade in Services Unit. The new set up will evolve necessary institutional mechanism and business processes; introduce or leverage necessary domestic commerce regulations such as the wholesale/retail market; framework, insolvency/bankruptcy regulations, framework for construction services, interface of government agencies with business community and coordination between different tiers of government in post 18th Amendment scenario etc.
The wing will also bring out annual report on state of domestic commerce and will re-organise Trade Development Authority of Pakistan (TDAP) export facilitation committee at the federal level. An inter-governmental domestic commerce reform and development committee will also be set up. This will also include representation from provinces besides federal ministries.
The major responsibilities of the committee would be to oversee the introduction of necessary laws and regulations and institutional arrangements to develop domestic commerce and strengthen linkages of domestic commerce with international trade.
Pakistan Land Port Authority (PLPA) will be established to oversee setting up of land ports to facilitate trade with South Asian countries especially with India. Trade with China, Afghanistan and ECO will also be facilitated through land ports. A committee has been established with secretary commerce to chair it. The PLPA will work as a statutory body under the administrative control of the interior ministry.
Another initiative, EXIM Bank, is to provide export credit, supplier’s credit and export credit guarantees. However, now it depends on the SBP governor, who is heading the committee on the subject, to finalise modalities for the establishment of the bank in the next three months.
To tap the enormous potential of export of services, especially to Asia, it has been decided to set up a Services Trade Development Council in collaboration with the relevant sector. A special task force will be constituted for facilitating the development of E-Commerce.
A high level trade committee will be constituted under the chairmanship of commerce minister, with membership from relevant government ministries/departments, provincial governments, business and academia. The committee would be mandated to evaluate our trade performance at least on a quarterly basis and address specific issues hampering foreign trade and competitiveness.
Another committee was proposed to be constituted with membership from the public, private sector and Karachi Dispute Resolution Centre to propose an action plan for setting up an International Trade Dispute Arbitration Council and revamp the existing Commercial Courts to give the country a more efficient, time saving, relatively inexpensive mechanism for trade dispute resolution. The committee was tasked to give recommendation within a period of three months for cabinet approval.
The existing export promotion agencies and trade monitoring committee will be revamped. There is a need to overhaul trade offices abroad and send only competent officers. At the same time, performance of the trade development authority of Pakistan and Horticulture Development and Export Company also needs to be closely monitored.
Other initiatives include rationalising tariff protection policy, creating regulatory efficiencies by strengthening National Tariff Commission
along with creation of a resource management unit in the ministry of commerce. Similarly, strengthening of training and product development institutes also feature in the new policy framework.
Commerce ministry believes that the implementation of these initiatives will begin in the next three months. Past practice shows that many good initiatives only remained on paper and never saw the light of the day. One hopes this time it will be otherwise.