Trade normalisation with India halted, Senate told

trade-with-india

* Pakistan cannot grant NDMA status to India, consultation in progress * Three land ports to be set up in country to facilitate trade with neighbours
November 26, 2014 – By Ijaz Kakakhel –

ISLAMABAD: A Senate committee on Tuesday was informed that Pakistan has not yet given Non-Discriminatory Market Access (NDMA) status to India while trade normalisation process between the two countries halted as political environment is not conducive.

The Senate Standing Committee on Commerce and Textile Industry met on Tuesday in Parliament House with Senator Ghulam Ali in chair. Officials of the Ministry of Commerce informed the committee that the “the ministry of commerce is in the process of consultation with the relevant stakeholders both from public and private sectors to devise a mechanism to ensure provision of level playing field to our agriculture and industry vi-a-vis India. On the completion of this process the issue of granting of Non-Discriminatory Market Access (NDMA) status to India would be submitted for consideration of the cabinet”, ministry officials added.

In the beginning, they said there were 1963 items on the negative list which reduced to 1209, however only 137 items are allowed through Wagah border. The NDMA requires elimination of Negative List on Pakistan’s side and reduction of SAFTA sensitive List from India side. More specifically the NDMA entails treating imports from a particular country at par with imports from other trading partners, in terms of market access and imposition of taxes/customs tariffs.

Commerce Minister Khurram Dastagir Khan told the committee that Afghanistan has withdrawn duties including warrantee and transportation charges on Pakistan items exporting to Central Asia, which would result in increasing country’s export. He further said that there should be a predictable and transparent policy to enhance country export and in this regard government withdrew some SROs in the budget for 2014-15, while more SROs would be withdrawn in next budget.

The committee expressed serious reservations over the non-implementation of most parts of the trade policy (2012-15) to which the ministry informed the committee that Finance Ministry had to release Rs15 billion for the implementation of the policy, however it failed in releasing the required amount. The minister further informed that EXIM bank would be established by the end of current financial year to fill the institutional deficit of a financing body for exporters. The EXIM Bank would provide export credit, credit for technological development and modernization, and issue trade finance guarantees.

The bank has been approved in the budget 2014-15 with allocation of Rs 100 billion as authorized capital with an initial paid-up capital of Rs 10 billion. In this regard a committee headed by the Governor State Bank was constituted with Secretary Finance and Secretary Commerce as its members. Dastagir further said before end of the current financial year, three land ports would be set up in the country to facilitate trade with neighbouring countries. The cabinet approved the creation of Pakistan Land Port Authority (PLPA), as a part of STPF 2012-15, with the objective of integrating the institutional and infrastructure arrangements for the processing of trade at all land borders.

Secretary Commerce Mohammad Shehzad Arbab informed the committee that on the basis of recommendations of Senate Standing Committee on Commerce, Supreme Court of Pakistan’s Suo Moto and in-pursuance of Cabinet decision, draft procedure for the amendment of arms import policy is under submission for vetting before the Law Division. All the existing authorizations have been suspended since July 1, 2014 and will be replaced by Quantity Based Authorization (QBA), devised in the new procedure of arms import after concurrence from Law Division.

The Law & Justice Division made amendments in the draft procedure two times, therefore a revised draft was submitted first on August 27, 2014 and then on October 1, 2014. On November 10, 2014, the Law & Justice Division again returned the file with observation/changes. The draft procedure is being changed according to the proposed amendments and will be submitted to Law Division shortly, the Commerce ministry informed the committee in written reply.

On Duty & Tax Remission for Exports (DTRE) Scheme, the committee was informed that the PM had approved a fiscal relief package to help revive the economic condition of terrorism affected areas of Khyber Pakhtunkhwa, FATA and PATA in 2010 and, accordingly, vegetable ghee was brought back in the ambit of the Scheme. It was previously excluded from the regime because of misuse of the facility.

Once the relief package was approved by the ECC, the FBR issued Notification and allowing export of vegetable ghee under the DTRE Scheme from the provinces of Khyber Pakhtunkhwa and Balochistan. A difference of opinion between FBR and the ghee manufacturers of Khyber Pakhtunkhwa arose in the interpretation of the decision of the ECC regarding time limit of consumption of imported palm oil. In view of the difference of opinions, the FBR, with the approval of the Finance Minister, referred the matter to the ECC of the Cabinet for bringing clarity in the interpretation. The ECC, in its meeting on 21.11.2013 discussed the issue and decided that the interpretation of the FBR is in accordance with the Rules. Hence, the issue stand resolved after the decision of the ECC of the Cabinet. (Daily Times)

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