August 05, 2014
ZAHEER ABBASI – BR Report –
The Ministry of Textile has informed the National Assembly that it is in the process of formulating Textile Policy for the next five years to increase the country’s exports. The ministry further informed the House that the Federal Board of Revenue (FBR) has been issued directives for duty-free import of textile machinery and Rs 28 billion have been disbursed under Textile Policy 2009-14 initiatives.
The Commerce Ministry informed the National Assembly that as Pakistan’s biggest trade partner, the US is a key market for Pakistani textile and apparel exports. The Trade and Investment Framework Agreement (TIFA) provides the framework for co-operation in trade between the two countries. Bilateral trade showed growth in 2013. Exports from Pakistan to the US increased from the first half of 2012 to 2013 by 4 percent whereas imports from the US into Pakistan increased by 10 percent. During the Prime Minister’s visit to Washington DC last year, it was agreed that the two countries would develop a joint action plan to expand trade and investment flows between Pakistan and the United States over the next five years. The 7th meeting of Pakistan-US TIFA Council was held in Washington on 13th May 2014. The Pakistan side was led by Minister of Commerce and the US side by Ambassador Michael Froman. An agreement on a joint action plan to expand bilateral trade and investment flows over the next five years was announced after the meeting. An MoU on joint efforts to empower women and to promote women’s entrepreneurship was also signed, the ministry added.
About trade with India, the National Assembly was informed that with regard to South Asian Free Trade Area (Safta) region, commerce ministers of Pakistan and India held a meeting on January 18, 2014 in New Delhi, India. During the meeting, the two sides, inter-alia, reached an understanding on normalising trade relations and provide Non-Discriminatory Market Access on a reciprocal basis. Recent studies estimate the following benefits to be accrued as a result of normalisation of trade relations with India: (i) Pakistan’s exports to India will increase substantially within three years wherein textiles, manufactured items and agricultural products are expected to post potential export increase; (ii) there would be considerable increase in import bill savings; (iii) GDP growth of Pakistan would be higher; (iv) there would be net increase in employment; (v) the number of poor will decrease as a result of enhanced economic activity; and (vi) there would be significant consumer welfare gains.
The House was further informed by the Minister for Commerce that Pakistan concluded a Free Trade Agreement (FTA) with Sri Lanka on August 1, 2002. Pakistan-Sri Lanka Free Trade Agreement (PSFTA) is operational from June 12, 2005. Under the FTA, Sri Lanka and Pakistan have agreed to offer preferential market access by way of granting tariff concessions on a reciprocal basis. Due to Pak-Sri Lanka FTA exports from Pakistan to Sri Lanka increased from $200.605 million during the year 2006-07 to $327.141 million during 2012-13, whereas exports from Sri Lanka to Pakistan increased from $63,384 million in 2006-07 to $76,569 million in 2012-13. Additionally, besides this, Pakistan is in process of commencing negotiations to conclude FTAs/PTAs with Bangladesh and Nepal.