NEWS COVERAGE PERIOD FROM DECEMBER 28TH TO JANUARY 3RD2015
WTO PACKAGE: A MIXED BAG
Dawn, Business & Finance weekly, December 28th, 2015
HUSSAIN H. ZAIDI
THE Nairobi package, representing the outcome of the 10th WTO Ministerial Conference held in the Kenyan capital two weeks back, is a mixed bag.
Arguably the most significant part of the package relates to agricultural export subsidies. The Agreement on Agriculture (AoA) prohibits export subsidies unless they are specified in a member’s schedule of commitments. In the 2005 ministerial conference in Hong Kong, the members had agreed to phase out export subsidies by 2013. The commitment, however, was not honoured.
At Nairobi, the developed countries agreed to remove these subsidies, except for those on processed and dairy products, with immediate effect. Meanwhile, the cut-off date for developing countries to do so is end-2018. However, these countries may continue to maintain export subsidies on marketing and transport costs until the end of 2023.
The least developed countries (LDCs) and net food importing countries may continue to grant such subsidies until the end of 2030.
Since export subsidies inherently distort trade, their removal will contribute to further liberalisation of farm trade. The million-dollar question is whether WTO members, particularly the developed countries, will honour their word.
Another important decision adopted by the ministers relates to the provision of domestic support for food security. The AoA classifies domestic subsidies into those that stimulate production and thus distort trade, and those which do not have such effects. The former have to be scaled down.
The total trade distorting domestic support provided by a country, called the Aggregate Measure of Support (ASM), must not exceed the corresponding annual or final-bound commitment level undertaken by that country. If it does, other WTO members can file a complaint against that member.
Developing countries like India, which provide substantial domestic support in the name of food security (thus exceeding their reduction commitments), have been demanding that they be provided permanent exemption from having to fulfil this commitment. Such an exemption would require an amendment in the AoA.
At the 2013 ministerial conference in Bali, it was agreed that until a permanent solution to the problem was reached, WTO members shall temporarily refrain (until 2017) from invoking the dispute settlement mechanism if any developing country failed to meet its AMS obligations in the name of food security. In Nairobi, the ministers reiterated the Bali decision, resisting, once again, attempts by nations like India to make the exemption permanent.
The AoA also provides that in the event of a rapid surge in imports, countries can impose additional duties even if serious injury is not being caused to the domestic industry. This is called the Special Safeguard Mechanism (SSM). The AoA further provides that the SSM shall remain in force for the duration of the reform process that is currently underway in farm trade.
The 2005 ministerial conference had agreed that developing nations would be entitled to SSM on a permanent basis. This, again, would entail an amendment to the AoA. At Nairobi, the ministers reaffirmed the Hong Kong decision and agreed to thrash out the modalities for a new SSM.
Also at Nairobi, members representing major exporters of information technology (IT) products agreed on a three-year timetable (2016-19) for implementing the agreement to eliminate tariffs on 201 IT products. The decision would drive up trade in IT products. However, the major beneficiaries will be mega exporters of IT products.
The Nairobi package contains a lot to make the LDCs happy. To begin with, the ministers extended for another 15 years (till end-2030) the waiver that allows non-LDC members to grant preferential treatment to LDCs’ services and service suppliers.
As per the WTO’s MFN principle, importing countries cannot discriminate among services or service suppliers on the basis of their country of origin. Already, merchandise exports from LDCs enjoy duty-free and quota-free access in the markets of developed nations.
Another ministerial decision will facilitate the LDCs’ preferential market access to developed and developing countries by providing detailed directions on simplified rules of origin for products originating in the LDCs. The Nairobi decision builds on a similar decision made in Bali two years ago. Since some LDCs, like Bangladesh, are Pakistan’s direct competitors (notably in textiles), the decision may undercut the interests of Pakistani exporters.
The Nairobi package, however, fails to effectively address most of the thorny issues that underlie the current Doha Round stalemate. For instance, it fails to address the issue of tariff escalation for both agricultural and industrial products.
Economies across the globe have highly protected sectors that are reluctant to liberalise. Developed countries have a highly protected and heavily subsidised agricultural sector, while developing countries by and large have highly sensitive industrial sub sectors. Regrettably, the deal struck in Nairobi has not looked into the issue of tariff escalation. This may be dubbed its single largest failure.
Similarly, the issue of domestic support to agriculture has not been addressed. Developed countries, particularly European Union members, dole out heaps of subsidies to their farmers at the expense of those from poor countries.
SAYING GOODBYE TO TRADE-DISTORTING SUBSIDIES
Dawn, Business & Finance weekly, December 28th, 2015
THE World Trade Organisation’s long-awaited decision to abolish agricultural export subsidies, which are accused of distorting international trade, will enable the developing countries to better integrate themselves into the global market.
The unexpected decision, which took an extra day of intense negotiations at the 10th biennial ministerial meeting in Nairobi, has been welcomed by all WTO members, including the developed countries, which are generally viewed as responsible for misusing the subsidies.
The decision, which may bring the Doha talks nearer to a solution, was described as ‘a turning point for the WTO’ by US Trade Representative Michael Froman and as ‘remarkable and historic’ by Australian trade minister Andrew Robb. Pakistan’s ambassador at the WTO, Dr Tauqir Shah, says the decision will go a long way in providing a level-playing field for Pakistani farmers and exporters of agricultural produce.
WTO Director General Roberto Azvedo termed it the “most significant outcome on agriculture in WTO’s history”. He said WTO members, especially the developing countries, had consistently demanded action on this issue due to ‘the enormous distorting potential’ of these subsidies for domestic production and trade. “[This] decision tackles the issue once and for all.”
Export subsidies are seen as the most destructive form of assistance provided for numerous agricultural commodities. These include sugar, beef, pork, lamb, dairy, wheat, rice, wine, fruit, vegetables, processed foods and cotton.
Rich nations, according to a Reuter report, are spending $250bn annually to subsidise their agricultural sectors to the detriment of farmers of poor nations, as they artificially lower prices for some crops and block market access for growers from these countries.
Subsidies from the 31-member Organisation for Economic Cooperation and Development (OECD), a group of wealthy countries, include direct payments to farmers, trade barriers for food imports from poor countries, and mandates for biofuels.
According to the WTO, the legally-binding decision would not only eliminate the subsidies but also prevent governments from reverting to trade-distorting export support in the future. The developed members have given a commitment to remove the subsidies immediately, except for those on a handful of agriculture products, while the developing countries will do so by 2018.
However, the developing members will keep the flexibility to cover marketing and transport costs for agriculture exports until the end of 2023, and the poorest and food-importing countries would enjoy additional time to cut their export subsidies.
The ministerial decision contains disciplines to ensure that other export policies are not used as disguised forms of subsidies. These disciplines include terms to limit the benefits of financing support to agriculture exporters, rules on state enterprises engaging in agriculture trade, and disciplines to ensure that food aid does not negatively affect domestic production. Developing countries have been given a longer time to implement these rules.
The Nairobi package contains six ministerial decisions on agriculture, cotton and issues related to the least-developed countries. Apart from the decision to abolish subsidies for farm exports, the other decisions cover public stockholding for food security purposes, a special safeguard mechanism for developing countries, and measures related to cotton.
In a statement, Commerce Minister Khurram Dastgir Khan said “cotton is the economic lifeline of Pakistan. Once the subsidies are removed, the entire increase in the value of cotton will be reflected in both the textile and clothing sectors”.
The ministerial decision on cotton includes three elements: market access, domestic support and export competition. The decision calls for cotton from least developed countries (LDCs) to be given duty-free and quota-free access to the markets of developed countries and to those developing countries which say they are able to do so, from January 1, 2016.
The domestic support part of the decision acknowledges the members’ reforms in their domestic cotton policies and stresses that more efforts need to be made. On the export competition for cotton, the decision mandates that developed countries prohibit cotton export subsidies immediately and the developing countries do so at a later date.
According to the WTO, the decision on public stockholding for food security purposes commits members to find a permanent solution to this issue in the next ministerial conference in 2017. Under the Bali ministerial decision of 2013, developing countries were allowed to continue food stockpiling programmes, which were otherwise at risk of breaching the WTO’s domestic subsidy cap.
A decision on a special safeguard mechanism (SSM) gives developing members the right to temporarily increase tariffs in case of import surges by using SSMs.
According to the commerce ministry, the Pakistani delegation claims to have successfully nullified an Indian move to convert the 2013 decision into a permanent solution. As a result of lobbying with likeminded members by Pakistan, the issue of interim order on public stockholding was deferred until the 2017 ministerial meeting.
Speaking at the plenary session, Khurram Dastagir said the public stockholding proposal in its current form already had serious and adverse unintended consequences for Pakistan’s economy.
According to the BBC, the final declaration adopted in Nairobi said “many members reaffirmed their full commitment to conclude” the Doha Development Agenda goals. But it added: “other members do not reaffirm the Doha mandates as they believe new approaches are necessary to achieve meaningful outcomes in multilateral negotiations.”
EXPORTERS ASKED NOT TO HEED TO SPECULATION ABOUT CONTINUITY OF GSP PLUS
The News, January 01, 2016
ISLAMABAD: The Ministry of Commerce has advised exporters to continue exporting their high quality products to the EU without indulging in any kind of speculation about the continuity of GSP Plus in the coming years.
A statement issued by the Ministry of Commerce here on Thursday said over the past few weeks it had received some queries about the continuity of preferential duties granted by the EU under GSP Plus Scheme to Pakistan post 01.01.2016.
The ministry would like to clarify that the preferences under GSP Plus Scheme given to Pakistan since 01.01.2104 are valid for the whole GSP Plus Scheme period i.e. from 01.01.2014 to 31.12. 2023 subject to a satisfactory implementation of 27 UN Conventions by Pakistan.
Under the GSP+ framework, the EU and Pakistan have engaged into a very open and constructive programme to share information on sustainable development issues such as labour rights, environmental protection or good governance.
The EU has recognized so far the good cooperation with the Pakistan authorities and progress towards the implementation of the relevant international Conventions.
Pakistan has gradually put in place institutions designed to respect, protect and promote human rights, such as the GSP+ Treaty Implementation Cell, headed by the Special Assistant to Prime Minister on Law and Justice, at the federal and provincial level, a recently established National Commission for Human Rights, establishment of Human Rights Cells at the High Courts throughout the country etc. A National Framework on Human Rights is at an advanced stage of finalization. Furthermore, in October and November 2015 respectively, Pakistan has submitted its own country reports to the relevant UN Treaty Bodies responsible for the UN Human Rights Conventions.
The European Commission is preparing a technical report for the European Parliament and the EU Member States (Council) to present trade data linked to the usage of GSP+ instrument and developments in the field of human rights and labour laws by the end of January 2016. Pakistan is confident that such a report will highlight the good, comprehensive partnership with the EU on these issues.
Pakistan will continue to work together with the EU in the next years to deliver concrete and positive changes on the ground for the people.
The Ministry of Commerce, the focal ministry in case of GSP Plus, would advise exporters to continue exporting their high quality products to the EU without indulging in any kind of speculation about the continuity of GSP Plus in the coming years.’’
‘IMPORT OF SUBSTANDARD LPG’
The News, January 02, 2016
LAHORE: The LPG traders have expressed their concern on the rise of import of substandard LPG through state owned companies.
“The Oil & Gas Regulatory Authority has strict specifications for import and sale of LPG, which are being flouted by LPG Importers” said Farooq Iftikhar, the Chairman of LPG Association of Pakistan.
“Taking advantage of the dearth of LPG supply in the international market due to historically low prices, importers have been purchasing distressed cargoes of low quality product and selling the same to LPG marketing companies,” he added. LPG is a mixture of propane and butane and is typically imported in the ratio of 60 percent butane and 40 percent propane. Iftikhar said recently cargoes of pure butane have been imported, which have been misdeclared as LPG, thereby evading custom and import duties.
“LPG companies have been duped into believing they were purchasing quality product, whereas they have been receiving butane, which is a low pressure product” he added.
Iftikhar said another worrisome trend that has emerged is the connivance of some LPG importers with SSGC LPG in reserving exclusive space at the latter’s terminal making it difficult for other importers to offload their product.
PAKISTAN, SRI LANKA TO SIGN MOUS FOR TRADE AND TRAINING
The Express Tribune, January 2nd, 2016
ISLAMABAD: Pakistan and Sri Lanka are going to sign two memoranda of understanding (MoUs) for promoting trade and providing training services during Prime Minister Nawaz Sharif’s visit to Colombo next week.
The prime minister along with a delegation will be on a trip to Sri Lanka from January 4 to 6 where two MoUs will be inked for deepening trade and investment ties between the two countries.
“First agreement will be between the Trade Development Authority of Pakistan and the Sri Lankan Export Development Board in a bid to promote trade and exchange delegations between the two sides,” a senior official in the Ministry of Commerce told The Express Tribune.
The second MoU will be between the Pakistan Institute of Fashion Design and the Sri Lankan Gems and Jewellery Training and Research Institute for imparting training to Pakistani students.
The Sri Lankan institute has expertise in gems cutting and polishing and many Pakistani students will benefit from this expertise.
Pakistan wants to increase quota for rice exports to Sri Lanka from 6,000 to 10,000 tons. In exchange, Sri Lanka is seeking to enhance export of tea and rubber to Pakistan.
During the PM’s visit, the sixth secretary-level technical talks will be held between trade officials of the two sides on various technical and trade-related matters.
They have already a free trade agreement (FTA) in place, but are eager to further liberalise the partnership in order to expand scope of the FTA from goods to services and investment.
They will also talk about enhancing business-to-business partnership. In this regard, Pakistani traders will organise a single-country exhibition in Colombo from January 15 to 17, which will showcase the commodities produced in Pakistan. Similarly, Sri Lankan businessmen will also hold a trade show in Pakistan.
The FTA with Sri Lanka has a significant importance because it was the first trade accord Pakistan signed with any country. Apart from this, Colombo is one of the closest business partners of Islamabad among regional nations as ties with India and Bangladesh often turn sour and hurt the trade relationship.
At present, the volume of trade between Pakistan and Sri Lanka is $350 million, which they want to increase to $1 billion by expanding its scope.
“Sri Lanka has an edge in export of finished and made-up garments whereas our strength is in fabrics and textile products,” the commerce ministry official said.
“It will be a big breakthrough if they succeed in including services and investments in the FTA,” the official said.
PM CONSIDERING APPOINTMENT OF 41 TRADE OFFICERS
The News, January 03, 2016
ISLAMABAD: After seeking clarifications on certain observations from authorities concerned on appointment of 41 trade officers abroad, Prime Minister Nawaz Sharif is considering approving a summary for selection of officers to boost dwindling exports.
“Earlier, the PM Secretariat has sent back summary with certain observations and sought clarifications on inclusion of a few officers into the list of those who passed examinations as well as interviews but those were called back from their foreign posts without completing their tenures and inquiries against them were underway,” official sources confirmed to ‘The News’ in background interviews here on Friday.
There are officers in the list of passed candidates who were sent back from Sweden and China without completing their tenure of foreign postings. Inquiries against them are underway so how the ministry has inserted their names into the fresh list, vying for foreign posting again, the PM Secretariat questioned.
Now Ministry of Commerce has again forwarded a summary to PM Secretariat after incorporating its viewpoint on observations by explaining the process that the renowned institution, LUMS took written test from candidates and finally Special Selection Board (SSB) conducted interviews for finalising list of potential candidates. However, the competent authority will take the final decision, said the sources.
This scribe made attempts to contact Secretary Commerce Muhammad Shahzad Arbab and sent him SMS on his mobile to get his viewpoint on foreign posting of trade officers but got no reply from him.
However, according to the sources, the new policy devised for appointment of trade officers at different foreign countries under which the written examination was given wheitage of 80 percent and interviews having weightage of 20 percent for selection of suitable officers for this assignment.
The process is underway for selection of 41 trade officers stationed abroad with 9 posts in grade-18, 26 posts in grade-19 and 6 posts in grade-20.
For public sector candidates, officers working in BS-18, BS-19 and BS-20 having served for 3-5 years on relevant positions in the following divisions and departments of the federal government: commerce and its attached departments; finance; economic affairs; revenue; privatisation, planning, development & reform; textile industry; industries & production; board of investment; or in the following departments of provincial governments: commerce; planning and development; finance; and industries, were eligible to apply.
For private sector candidates, the minimum qualification required was Master’s degree (16 years of education) or its equivalent from a recognised Pakistani or foreign university in Business Administration, Economics, Commerce, Trade Law, International Law, Economic Development, Banking, Finance, Public Administration and having 5 years of relevant experience for posts in BS-18, 10 years for BS-19 and 15 years for BS-20 (with 5 years at a senior position) in the field of International Marketing and International Trade, Sales, Finance, Economics, Export/Import and trade related sectors in banking.
For Posts in BS-18 upper age limit was 40 years, for posts in BS-19 upper age limit is 48 years and for posts in BS-20, upper age limit was 55 years.
The role of a Pakistani Trade Officer stationed abroad is to increase the foreign exchange earnings of Pakistan through promoting and facilitating the expansion of Pakistan’s exports.
The principal responsibilities are enhancement of Pakistan’s reputation as a reliable trading partner, promoting favourable commercial relations between trading enterprises in Pakistan and his post territory, ensuring that relevant governmental bodies, commercial organisations and the Pakistani export community have up to date knowledge of trading conditions and export prospects and opportunities in his place of posting.
In addition, the trade officer is supposed to attract foreign investment into Pakistan, encourage Pakistan’s participation in major projects abroad; and stimulate tourist interest in Pakistan
DELAY IN TRADE POLICY CAUSING UNCERTAINTY FOR INDUSTRIES
The Express Tribune, January 3rd, 2016.
KARACHI: Lasbela Chamber of Commerce and Industry (LCCI) President Maqsood Ismail has criticised the inordinate delay in announcement of the industrial and trade policy framework and the exporter package, saying the uncertainty is creating problems for industries and exporters.
“Although the prime minister promised the announcement of the Strategic Trade Policy Framework (STPF) a few days ago, the government fails to understand urgency of the matter,” he said, adding delays in taking decisions often cost much to the people and economy.
“The industry is in a really bad shape, particularly the export-oriented industry that is struggling for survival,” he added.
Comparing the country’s exports worth $24 billion to Bangladesh’s $31 billion and Vietnam’s $97 billion, he said the world would not wait for Pakistan to announce its trade policy.
“The top export category for both these economies is textile. Foreign buyers have made it clear to us that they will not wait for us to announce the STPF,” he said.
“We are working in a highly competitive international environment and our peers are occupying the available space in international trade each passing day, leaving little for Pakistani companies.”
He lamented that the industrial sector was facing multiple issues and suggested that any policy or package should give special treatment to the sectors that provided employment to a large number of people.
Ismail praised the Khyber-Pakhtunkhwa (K-P) government for announcing the industrial policy and giving incentives to the industrial units.
“Other provinces should follow in the footsteps of the K-P government and come out with a clear-cut industrial policy and give investors every possible incentive and assistance.”
He also drew attention of the newly elected chief minister of Balochistan towards announcing a trade and industrial policy and called for opening up new avenues for industrialisation in the province.
NEWS COVERAGE PERIOD FROM DECEMBER 21st TO DECEMBER 27th 2015
EU ASKED TO CONTINUE PAKISTAN’S GSP+ STATUS
Dawn, December 23rd, 2015
ISLAMABAD: The National Commission for Human Rights (NCHR) has asked the European Union (EU) to continue the GSP+ status for Pakistan after first review in January next year as the scheme has been significantly contributing to the revival of country’s economy as well as serving as an international instrument for improvement in human rights situation in the country.
In a statement released here on Tuesday, NCHR Chairman retired Justice Ali Nawaz Chowhan made the request to the EU during his recent weeklong visit to Germany.
NCHR has been established around six months back with the aim to assisting the government in fulfilling its international obligations, particularly in reporting to treaty bodies, more accurately and regularly.
“We are a new body and with very limited resources but we have made significant progress and are constantly monitoring human rights situation in the country.” Justice Chowhan told German officials.
During his official visit to Germany Mr Chowhan was accompanied by Zulfiqar Shah, Team Leader of Democracy Reporting International.
Compliance to 27 UN conventions are attached to GSP+ conditionality and Pakistan has already started putting in place institutional mechanisms. But, the government maintains that more time is needed for change.
The EU granted GSP plus status to Pakistan in January last year, allowing duty-free access to Pakistani products in European markets.
GSP + scheme, currently granted to 13 developing countries, is a trade preference scheme described as ‘Special Incentive Arrangement for Sustainable Development and Good Governance’.
As a result of economic benefits of GSP +, Pakistan’s exports to EU rose by 21 per cent in the first year of the scheme, but the GSP Plus mechanism also bounds Pakistan to introduce more democratic and human rights reforms.
The preferential access to EU market is, hence, conditional to Pakistan maintaining ratification and effective implementation of the key international conventions concerning human rights, including civil and political rights, labour rights or environmental protection.
Justice Chowhan said: “The role of newly established NCHR was highlighted in Germany and there was learning from German experience of achieving high degree of human rights.”
“The German government is very sympathetic towards Pakistan and wants to see Pakistan build strong human rights protection mechanism,” he added.
He said German officials and parliamentarians were concerned over executions after lifting of moratorium on death sentences and establishment of military courts in Pakistan.
“We had to explain that these are temporary measures to deal with extra ordinary terrorism threats that Pakistan has been facing over the past few years,” the NCHR chairman said, adding that “as soon as situation become normal we will revert to normal procedures”.
Pakistan’s first GSP+ review report is ready and will be tabled in the European Parliament early next month.
Establishment of NCHR has already been acknowledged as an encouraging development. However, there are certain areas where the country needs to make significant improvements.
PAKISTAN ACCELERATES SOYBEAN OIL IMPORTS AMID PRICE TUMBLE
The News, December 25, 2015
KARACHI: Pakistan imported significant quantity of soybean oil in the last five months (July-November 2015) since it was available at lower prices due to oversupplies at world markets, while freight charges all the way from North America and Brazil cost less than half of what they were last year, industry officials said.
“Soybean oil was available at a discount of $100/ton this year,” said A Haseeb Khan, a representative at an agent firm of importers in Pakistan.
Pakistan has imported soybean oil at 95,384 tons (worth $85.52 million) in the five months. The import quantity is over 160 percent higher than 36,506 tons (worth $35.59 million) imported in the same five months last year (2014), reported Pakistan Bureau of Statistics (PBS).
Khan said importers also benefited from the tumbled crude oil prices at world markets (WTI Spot at $36-37/barrel as on Wednesday). Soybean oil exporters in North America and Brazil, who have booked ships for one-year or so, offered the importers here a freight charge which was less than half of what it was last year. “This was an additional benefit to the (soybean) oil importers,” he said.
Khan said manufacturers blend soybean oil with palm olein oil to produce a good quality cooking oil and ghee. “Soybean oil is always a better choice and substitute of banola oil and mustard oil for blending,” he said.
Shaikh Amjad Rasheed, former chairman of Pakistan Vanaspati Manufacturers Association said it was more interesting to note that cost of the imported soybean oil came less than the locally produced banola oil and mustard oil.
“The landed cost of soybean oil comes at Rs3,800-4,000/40kg as compare to locally produced banola oil at Rs4,000-4,200/40kg…similar is the case with mustard oil,” he said, adding this was off-season for banola and mustard oil in Pakistan.
“Manufacturers should blend 30 percent soybean oil to produce better quality cooking oil and ghee, but many blend around 10-20 percent or less,” he said.
Rasheed said one can see more imports of soybean oil next month (December 2015). And from January onwards, its import would decline gradually.
Khan, however, is of the view that Pakistan would again place import orders for soybean oil from March 2016 onwards when North America and Brazil would throw new supplies of the oil into the world markets.
“Price of soybean oil would remain low next year as well due to downward trend in crude oil and problems in world economies, including China and India,” he said.
Hanif Motlani, an importer of soybean oil said, Pakistan has placed import orders for soybean oil at $690-675/ton in the said five months (July-November 2015) as compared to $740-745/tons in 2014.
“Pakistan has imported huge quantity of the oil after several years…there was a time when Pakistan used to import high quantities of soybean oil, but the country had reduced imports due to spike in its price,” he said.
He said soybean oil carries a unique property which other blending oils lack. “This (soybean oil) does not freeze in low temperature seasons,” he said.
Besides, Pakistan is estimated to import around 2.5 million tons palm and palm olein oil from Malaysia and Indonesia this year. The imported oil would meet around 75 percent local needs. Remaining 25 percent need would be met through locally produced banola and mustered oil, or imported soybean oil.
The PBS reports that the country has imported 1.17 million tons (worth $720.38 million) in the said five months which is 18 percent higher than 991,213 tons ($797.32 million) imported in the same five months in 2014.
ECONOMIC COOPERATION ORGANIZATION: MEET-UP DISCUSSES WAYS TO INCREASE TRADE
The Express Tribune, December 27th, 2015.
ISLAMABAD: In a key Economic Cooperation Organization (ECO) business meet-up held in Ankara, Turkey, participants stressed the need for furthering mutual trade and economic cooperation within the ECO member countries.
The speakers were attending the 20th Executive Committee and 14th General Assembly meetings of ECO Chamber of Commerce & Industry (ECO-CCI). The meetings were hosted by Turkey’s Union of Chambers and Commodity Exchanges.
President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the current President of ECO-CCI, Mian Muhammad Adrees headed the eight-member delegation from Pakistan.
The meetings were also attended by envoys of ECO member countries. Pakistan’s Ambassador to Turkey Sohail Mahmood was also present.
In his address, Adrees highlighted FPCCI’s efforts for promoting increased connectivity including early operationalisation of ECO container train as well as implementation of the TIR Convention.
Adrees noted that the ECO region had yet to achieve its full economic potential and lagged behind when compared to other regional economic blocs such as EU and NAFTA. As such, there was an imperative need for ECO member countries to remove impediments in the way of increased trade, simplify customs and visa procedures and take other requisite steps for greater economic integration of the region, he added.
FPCCI president urged member countries to increase intra-regional trade by focusing on the implementation of ECO Trade Agreement, establishment of customs union, signing of bilateral investment treaties, linking of proposed Gwadar-Kashgar motorways, and harmonisation in business and financial regulations.
Turkey’s Union of Chambers and Commodity Exchanges President Rifat Hisarciklioglu underlined the need for urgent steps by ECO countries to seize the historic opportunity before them to upgrade their position in global development.
Turkey’s Minister for Development Cevdet Yilmaz, in his address as the chief guest, said that the ECO region had a strategic location and a vital role to play. “The focus of economic activity was shifting from the west to east and the emerging economies of Asia would become even more important,” he added.
NEWS COVERAGE PERIOD FROM DECEMBER 14th TO DECEMBER 20th 2015
EXPORTS: IS ANYONE IN CHARGE?
Dawn, Business & Finance weekly, December 14th, 2015
EVERYONE agrees that export growth is vital for the country’s precarious balance of payments position. Loans (from multilateral lenders and donors, eurobonds), ‘one offs’ (from 3/4G license auctions, gift from a friendly country, off-loading of equity holdings), and lucky breaks (Coalition Support Fund, bonanza of weak oil and commodity prices) seem to have run their course.
Furthermore, no ‘import management strategy,’ as employed of late, can compensate for anemic export growth, which appears to have become our new normal.
But does everyone agree under whose remit export growth is, and if this apparition is both competent and sufficiently empowered? Does it have a clue, beyond tired alibis, about why the export volumes are stubbornly refusing to budge? Will the six-month overdue Strategic Trade Policy Framework 2015-18 (cleared by a committee headed by the finance minister, of course) make us any the wiser?
The Ministry of Commerce (MoC), who we are told has the mandate, faces a shrinking policy space. Either it doesn’t have what it takes or the interventions are too powerful to contend with. It can’t do much about the held-up refunds that have seriously affected exporters’ cash flows. It is a silent spectator when it comes to the tariff policy. We doubt if it ever cautioned against the recently announced ‘mini budget’.
The dictum ‘tax on imports is a tax on exports’ may be arguable, but if your exports have high import content, as should be the case with Pakistan (if you wish to diversify away from cotton textiles), surely it will affect your competitiveness.
The commerce ministry has no say in matters of the exchange rate — the quintessential lifeboat our competitors use in times of stress. It can only give a bemused look when, instead of looking at the real effective exchange rate to maintain export competitiveness, the State Bank of Pakistan chooses to accuse ‘analysts’ if the rupee weakens.
The ministry has little control over even trade facilitation and it is unable to incentivise exports, as the lock is in.
So what does the MoC do?
Trade fairs, trade offices, Export Development Fund (EDF). And, yes, free trade agreements. It also pretends to have something to do with domestic commerce, happily oblivious to the fact that it is now a provincial subject.
Trade fairs:The only way to find out if trade fairs are worth it is by getting an independent cost-and-benefit evaluation done.
Trade offices: Lets take a huge leap of faith here and assume that all our trade officers are chosen on merit alone. But can one of them honestly say what his job is, and if he was trained for it? If his job is trade diplomacy, why can’t it be done by the better trained ambassador, with necessary backstopping from the MoC?
And why do we have trade officers in all those lovely European capitals when EU trade policy matters are handled in Brussels? If their job is marketing, do they know the products? Can they really be expected to have sufficient knowledge about the hundreds of products that are exported to their jurisdictions?
Or, is their job facilitating B2B partnerships? For that, they would need an intimate knowledge of Pakistani suppliers and value chains, distribution channels and the respective aspirations of the potential partners.
One commerce secretary wished to have a proper evaluation of the trade offices done. A scheme to do so was approved by the EDF Board, but the secretary quit the government before it could be implemented. It is now languishing.
Could it be that the mandarins who covet these foreign postings feel threatened, as a proper evaluation could come up with a recommendation to drastically reduce the number of trade offices, besides instituting more robust selection criteria and training requirements?
The EDF is funded by exporters for use by exporters. However, collections into the EDF flow through the finance ministry, which siphons off a large chunk for budgetary support.
Whatever is left is divvied up among the members of the EDF Board for their pet projects. In most cases, there is hardly any link between these projects and export growth. It defies logic, for instance, that how building offices for chambers of commerce will help exports grow.
A classic illustration of the disconnect between intent and outcome is the manner in which the proposal to establish overseas offices of trade associations was neutered by the MoC. We had submitted that the way forward was state-of-the-art research, technological diffusion, innovation and ‘partnerships’ — with buyers, suppliers of knowhow and technology, and trade bodies. This required our presence abroad.
The EDF Board agreed to sanction funds for the FPCCI and two associations to open their offices abroad. Excited, we proceeded, full throttle, to locate the office premises, select the team and meet the juridical and banking requirements of the host country. We knew all this would cost money and time. We were prepared for it.
What we were not prepared for was the bureaucratic ringer at home. We resisted the ‘shakedown’ efforts of some, agreed to all the (legitimate) procedural requirements of the government, and ourselves proposed a proper disbursement and audit regime.
But after two years of arduous effort, we went back to the EDF Board to say we would rather withdraw than put up with the MoC’s intransigence. It did not take the board’s chairman more than a minute to allow our withdrawal. No sign of remorse, no inclination whatsoever to look at the causes of our surrender.
One test of the efficacy of an organisation is if it will be missed if it was not there. This is something that the MoC’s engineer superintending has to ponder over. We, on our part, like to think it is too early to read the last rites. It may be the triumph of hope over experience, but we feel the MoC can make a difference. If only it could get its act together.
PAKISTANI, IRANIAN ENTREPRENEURS URGED FOR JOINT VENTURES
The News, December 15, 2015
LAHORE: Former senior vice president of the Lahore Chamber of Commerce and Industry (LCCI) Mian Nauman Kabir has urged the Pakistani businessmen to expedite the process of joint ventures with their Iranian counterparts, as the two countries have huge potential to touch the staggering figure of $10 billion trade.
Talking to a group of exporters on Monday, Kabir said that Pakistan and Iran not only have common border, but also share a glorious history.
The two countries have close cultural affiliations and remained steady trading partners, as well, but in the recent years, the momentum of trade has been seriously affected, he said.
Pakistan and Iran have the potential to cater to each other’s needs provided the businessmen have the exposure to the available opportunities, he said, adding that Iran is ready to start barter trade with Pakistan to facilitate the businessmen and to jack-up the volume of two-way trade.
The business communities of the two countries would have to increase interaction to share their experiences in the larger interests of the people, Kabir said.
The volume of mutual trade between the two countries does not match their respective potentials, the former LCCI official said, adding that the chambers of commerce in the two countries would have to focus on expansion of trade by holding single-country exhibitions and through trade delegations to each other’s country.
Dissemination of sector-specific and trade-related information would go a long way in achieving the goal. Both the countries should share their experiences in the field of science and technology also.
Agriculture, tourism and metal industry of Iran have investment opportunities; therefore, Pakistani businessmen should come forward.
Kabir expressed the hope that the Iranian trade planners would ensure greater role to be played by Iran, particularly in regional trade.
It is a fact that the economic prosperity lies in integration with the neighbouring countries.
Pakistan is eagerly looking forward to expanding trade relations with Iran, he said.
“It should be a matter of concern for both the sides that in 2014, the volume of bilateral trade has decreased to $229 million, which is a record low in this decade.”
“In 2009 and 2008, our two-way trade was as high as $1.21 billion and $1.16 billion, respectively, Kabir added.
He said that although imports from Iran to Pakistan are witnessing increasing trend, but Pakistan’s exports to Iran are constantly dropping.
For example, Pakistan had exported goods to Iran worth $142 million in 2012, which dipped to $43 million in 2014, while Pakistan imports from Iran in 2012 were that of $120 million, which inched up to $186 million in 2014.
He stressed the need to find ways to increase the volume of two-way trade, adding that Pakistan is already exporting meat to Iran.
Dairy sector can be another area to be explored for this purpose.
The potential of two-way trade between Pakistan and Iran is estimated to be over $2 billion, but it can only be materialised by making all-out efforts, he said, adding, “Our governments and respective private sectors should collaborate with each other on a regular basis.”
The former LCCI official expressed the hope that work on Pakistan-Iran Gas Pipeline project will be expedited. It will not only play a significant role in addressing the energy crisis of Pakistan, but further augment the trade relations between the two countries, he said, adding that import of electricity from Iran can also be a good venture.
“We have deliberated much to allow the businessmen of both the countries for trading in local currencies, but a lot is desired to be done at the government level to formalise it, he said.
“The close interaction between our institutions can play a pivotal role in obtaining the desired objectives.” “We will appreciate to have trade inquiries through your good offices,” he added.
US CALLS FOR OVERHAUL OF DEADLOCKED WORLD TRADE TALKS
Dawn, December 15th, 2015
PARIS: The United States called on Monday for a fresh start to break a 14-year deadlock in negotiations to free up world trade in goods and services worth some $23 trillion (21tr euros).
On the eve of a World Trade Organisation conference in Nairobi, US Trade Representative Michael Froman said talks to lower barriers to trade that began in Doha in 2001 have drifted ever since and have little prospect of success.
“Getting it unstuck begins with acknowledging that Doha was designed in a different era, for a different era, and much has changed since,” he wrote in an opinion piece published in the Financial Times. “It is time for the world to free itself from the strictures of Doha.” The trade talks that began in Doha have been riven by a rich-poor split.
They never recovered from a collapse in negotiations in Geneva in 2008, notably because of a dispute over a provision that allows developing countries to erect protective import tariffs on farm goods.
“Now, some emerging markets are the biggest providers of agricultural subsidies but would be exempt under Doha from cuts. If you are a poor farmer facing a global market distortion it does not matter where the subsidies causing it came from. Artificial distinctions between developed and emerging economies make no economic sense,” Froman wrote.
WTO director-general Roberto Azevedo has said one of the pivotal questions facing member nations when they gather in Nairobi is whether or not to carry on negotiating under the current system, with both the United States and Europe believed to be keen for talks to start again from scratch.
The latest WTO annual report says that in 2014 annual exports in goods was worth $18tr and trade in services some $4.9tr more.
But with global economic growth slowing as China steps down a gear, trade has a more significant role to play in spurring activity, analysts say.
With Doha talks stalled, many countries have pressed ahead with one-on-one or regional trade agreements covering Asia, the Americas, or the Europe-North America pact now under negotiation, all of which threaten to make the WTO irrelevant if the body cannot revive talks on a global scale, they say.
PAKISTAN WILL NOT SUPPORT ANY ‘ANTI-FARMER’ DECISION AT WTO
Dawn, December 16th, 2015
ISLAMABAD: Pakistan will not support any policy decision on agriculture that will go against the farmers of developing countries, Commerce Minister Khurram Dastagir Khan said on Tuesday on the sidelines of the 10th World Trade Organisation (WTO) ministerial conference in the Kenyan capital Nairobi.
The four-day Nairobi meeting comes two years after ministers from WTO member countries reached a landmark deal in Bali on overhauling global customs procedures.
An official statement of the commerce ministry said Mr Dastagir attended three back-to-back meetings of G-33, G-20 and the Cairns Group — the three biggest and most influential interest groups in agriculture.
“Agriculture is of enormous value to Pakistan, which cannot be just measured in dollar terms… It’s a matter of (our) national survival and security,” the statement quoted him as saying.
Pakistan considers it unjust that some countries want to ensure their food security at the cost of others, he said.
The heavy subsidisation on part of developed countries and misuse of some provisions of Agreement on Agriculture by some developing countries is already hurting the agriculture sector of small economies like Pakistan, he added.
In the country’s position paper, which is available with Dawn, Pakistan is not undermining the importance of stockholding for a country’s food security policy, and there are provisions in the agreement to deal with this issue.
“We restate the fact that public stockholding programme for food security is at our heart. It is critically important to millions of poor farmers thriving on subsistence agriculture,” the paper further says, adding that in its current form, it will be a hard sell to our constituents; it has serious adverse unintended consequences impacting our economy.
According to Pakistan’s position, addressing food security is a complex subject and requires much more than stockholding. “The proposed permanent solution has elements that undermine our farmers’ livelihoods — hence in our view it is not a solution; it is a problem.”
Local stakeholders agree that market price support programmes of one country have a negative effect on the food security of other countries. It works as a production incentive, not only inducing unsustainable production, but eliminating smaller exporters in third country markets.
In post-Nairobi negotiations, Pakistan proposed that members work towards developing comprehensive food security initiatives, while keeping in mind the in-built complexities of food security and its linkage with domestic and international trade.
Special safeguard mechanism is one element of the total market access pillar, therefore, solution has to be developed in the context of full pillar. New proposals on the eve of ministerial meeting have created a practical difficulty in finding any suitable solution, the paper further said.
Domestic support and market access pillar require serious conversation among members on the basis of current realities, it further said. “We are disappointed with the fact that up till now we do not have any landing zone in the export competition pillar. The WTO has a longstanding agenda to reform export subsidies,” the paper added.
Pakistan is one of those countries that have already eliminated exporting state trading enterprises (STEs), and has zero commitment in the export subsidies schedule of commitment.
The available provision for subsidy is used rarely, only when we have serious market failures and small farmers economic survival is at stake, the paper said, adding that Pakistan therefore urged members to resolve their differences in export competition pillar with a view to finding a solution.
The commerce minister also participated in a ministerial panel on Trade Facilitation Agreement (TFA) organised by UNCTAD (United Nations Conference on Trade and Development). Pakistan has recently ratified the TFA which was widely appreciated by the member countries.
The minister said that TFA can act as an external stimulus to tackle public sector inefficiencies systematically. The minister also met International Trade Centre (ITC) Executive Director Arancha Gonzalez and witnessed the signing of a letter of intent between the ITC and the Ministry of Commerce.
The minister also participated in the consultative meeting of the Islamic Development Bank of OIC member countries on the eve of WTO ministerial conference. He said that for OIC member countries the road to influence WTO is through intra-OIC Trade Preferential System.
He emphasised that intra-OIC trade and technical assistance should be enhanced to make any noticeable mark in international trade. He was of the view that WTO requires eternal vigilance, regardless of the pace and outcomes.
PAKISTAN STRIVING TO BECOME THE ECONOMIC HUB FOR CENTRAL ASIA
The News, December 16, 2015
ISLAMABAD: The China-Pakistan Economic Corridor (CPEC) coupled with accelerated movement in Central Asia for WTO accession and Trade Facilitation Agreement (TFA) ratifications will give a new stimulus to regional trade integration.
Commerce Minister Khurram Dastagir said while addressing the WTO Summit in Kenyan capital Nairobi, according to a message delivered to The News.He highlighted the CPEC and said Pakistan is envisioned to be the economic and trade hub for Central Asia and South Asia. “With accession of Afghanistan and Kazakhstan, the CPEC will get a further boost,” he said.
The minister said ratification of Transports Internationaux Routiers (TIR-International Road Transports) conventions, revised Kyoto Protocol, Afghan-Pakistan Transit Trade Agreement and the quadrilateral transit trade agreement among China, Kyrgyzstan, Kazakhstan and Pakistan for facilitating traffic in transit, coupled with TFA and recent accessions of Central Asian countries and CPEC provides a solid systemic and infrastructural basis for regional economic bloc of global proportions.
Khurram Dastagir said that the CPEC will go a long way in materialising the vision of making Pakistan a regional economic hub as well as a critical partner with a view to realising the strategic trade objectives, giving confidence to international corporations and entities with an overarching role to play not only at the regional but also at the global level. It will also accelerate and facilitate the economic benefits envisioned through facilitating regional and international trade.
He said the CPEC, needs to be seen in a perspective, is linked with two larger infrastructure projects embracing the whole of Asia and designed to establish new trade and transport links between China, South Asia, Middle East, Central Asia and beyond.
The CPEC is vital link between Silk Road Economic Belt and the 21st-Century Maritime Silk Road – the ‘Belt and Road Initiative’, he said.The minister said this $46 billion initiative spread over 15 years has all the vital elements of economic development, like transport, highways, railways, ports, industrial zones, IT, last but not least energy, its considerable part being renewable comprising hydro, solar and wind.
He said the CPEC is going to be a game changer for Pakistan and the region and will be a bridge between three engines of growth, China, South Asia and Central Asia, thus giving a stimulus to a deep regional economic integration and creating a trading bloc of 3 billion people, nearly half of the planet.
“Mind you these also include half of world’s extreme poor. The deepening of economic integration will lower trade costs, essential for ending poverty. Trade is a critical enabler of growth, opening up opportunities of new and better work for the poor.”
Khurram Dastagir said Pakistan is the sixth most populous nation on the globe with 70pc of them being below 30 years. “We have 4,000 to 5,000 MW energy deficit, which is 25pc of our total generation capacity; it is costing us 2pc of GDP growth. This development deficit needed an initiative of ‘Big Bang Scale’, like CPEC. It is a set of 55 projects – 75pc of funding is for providing 17000 MW of energy, over next ten years.”
The minister said that the hallmark of the initiative is the North South Highway and rail link, designed to connect Arabian Gulf coast of Pakistan in South to North Western Chinese Region of Xinjiang and Kashgar, thus reducing the distance of China’s North West from Arabian Gulf from 14,000 kilometers to 2,500 kilometers, thus transforming the trade cost for whole region.
The CPEC, he said, will result in increase in trade, investment and financial flows, bringing peace and prosperity to the region through enhancement in the competitiveness of the economies and reduction in trade cost. The CPEC epitomises South-South trade at its best, he added
SWEDEN KEEN TO BOLSTER TRADE TIES WITH PAKISTAN
The Express Tribune, December 18th, 2015.
KARACHI: Sweden – the world’s Scandinavian gem – has expressed the need to make collective efforts to eradicate knowledge barriers regarding Pakistan’s potential.
Sweden’s Ambassador to Pakistan Tomas Rosander has said that the countries should work together to woo foreign companies to work in Pakistan. “We have been encouraging Swedish companies to visit Karachi, Lahore and Islamabad,” he said while referring to substantial improvement in the security situation of Pakistan.
During his visit to Karachi Chamber of Commerce and Industry (KCCI), he advised the business community of Karachi to focus on diversifying their exports as there was plenty of room for improving Pakistan’s trade with Sweden.
Swedish ambassador further said that they recognise Karachi as a hub of economic activities thus, the input provided by the business and industrial community is very important to Sweden.
He also stressed the need to increase visits of trade delegations to both countries, besides organising seminars and other trade promotional activities on a regular basis.
KCCI President Younus Muhammad Bashir, touching upon Pakistan-Sweden trade and economic relations, pointed out that during fiscal year 2014-15, Pakistan exported goods to Sweden of worth $149.56 million compared to $138.94 million in fiscal year 2013-14, up 7.6%.
NEWS COVERAGE PERIOD FROM DECEMBER 7TH TO DECEMBER13TH, 2015
SRI LANKANS FOR JOINT EFFORTS TO BOOST MUTUAL TRADE
The News, December 08, 2015
LAHORE: A high-level 17-member Sri Lankan delegation on Monday held meetings with their Pakistani counterparts at the Lahore Chamber of Commerce & Industry.
The delegation was headed by Prasanna Jayasinghe while LCCI President Sheikh Muhammad Arshad, Vice President Nasir Saeed and Executive Committee Members also spoke on the occasion. LCCI President Sheikh Muhammad Arshad and Sri Lankan delegation agreed to make joint efforts to enhance exiting trade volume.
Leader of the Sri Lankan delegation Prasanna Jayasinghe said that there was a vast scope for the expansion of two-way trade between Pakistan and Sri Lanka in the presence of Free Trade Agreement (FTA) between the two countries to further strengthen their multifaceted and multi-sectoral cooperation in the fields of herbal medicine, gems and jewellery, culture, commerce & trade, science and technology and tourism.
He was full of praise for Pakistan government and people for their moral support to Sri Lanka on every issue. He, however, said that except for trade, everything else was fine between Pakistan and Sri Lanka. He said that Sri Lanka offers huge opportunities in gems and jewellery, rubber, garments, hospitality, services and there was a need to take advantage by liberal trade policies of the Sri Lankan government.
LCCI President Sheikh Muhammad Arshad said that the ideal and friendly relationship between Pakistan and Sri Lanka is based on historical and cultural links as well as common understanding on a wide range of bilateral, regional and international issues.
He said that Pakistan and Sri Lanka are members of Saarc and are enjoying cordial relations. He said that both the countries are old trade partners and Sri Lanka ranked 19th in the export destinations of Pakistan.
He said that the existing trade volume is not at par with the potential of the two countries. He said that Pakistan’s exports to Sri Lanka have declined to $266 million in 2014 from $316 million in 2013.
“Pakistan and Sri Lanka are lucrative investment locations for each other’s exporters as on the one hand Pakistan is a gateway to resource-rich Central Asian States while on the other Sri Lanka enjoys easy access to huge European and Indian markets,” the LCCI President added.
TRADERS URGED TO WORK OUT PROCEDURES FOR AVAILING SAFTA
Dawn, December 8th, 2015
ISLAMABAD: Evolving standard trade procedures is the only way to increase trade volumes and reap the benefits of South Asia Free Trade Agreement (Safta), speakers at the 8th South Asia Economic Summit stressed on Monday.
The two-day conference, titled ‘Regional Cooperation of Sustainable Development in South Asia’ has been organised by the Sustainable Development and Policy Institute (SDPI).
Experts criticised the policy makers and political leadership of the region for stagnant trade volumes in South Asia which have hovered around five per cent for years.
Federal Minister for Planning and Development Ahsan Iqbal said there was hope that relations between India and Pakistan will improve following the meeting between the two prime ministers at COP21 earlier this week.
On the occasion, he highlighted the reasons for which 80pc of China-Pakistan Economic Corridor’s $46 billion investment was focused on power and energy projects.
Speakers highlighted that mega projects including the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline and Central Asia and South Asia Electricity Transmission and Trade Project were given highest priority by Pakistan and they would eventually help in the development of the whole region. It was stressed that Safta will become operational by 2020.
United Nations Economic and Social Commission for Asia and Pacific (UNESCAP) India’s Nagesh Kumar stressed the need for cooperation.
While most speakers highlighted growth opportunities in the region and the options for collective growth in South Asia, a guest from Nepal criticised the political leaderships of India and Pakistan.
“Saarc has become a casualty due to the nature of relations between India and Pakistan,” said Dr Rajan Bhattarai, Member of Constituent Assembly and Legislative Parliament, Nepal.
He highlighted the role of economy in terms of sustainable development and enhanced cooperation in the South Asian context. He stressed that policy making in the region remains guided by other issues and not economic growth.
Suraj Vaidya, President-In-Charge of Saarc Chamber of Commerce and Industry, called for immediate removal of trade barriers, especially between India and Pakistan, for meaningful progress.
UNESCAP-Bangkok’s Economic Affairs Officer, Rajan Sudesh Ratna emphasised the need to reduce duties in Safta to zero and liberalise services and investment for economic integration of south Asia.
SDPI Executive Director Dr Abid Qaiyum Suleri said that South Asia was a region with multiple interstate and intrastate conflicts. Finding an opportunity for public thought leaders to objectively discuss the regional issues is a big success, he added.
TRADE CONSIGNMENTS’ CLEARANCE SLOW IN PAKISTAN: ADB
The News, December 09, 2015
Tariq Ahmed Saeedi
KARACHI: Clearance of trade consignment in Pakistan is one of the slowest in South Asia, says an Asian Development Bank (ADB) study on Tuesday, suggesting that the country needs to improve its trade facilitation processes.
Documents processing, customs procedures and inland transportation in the country consumed average 5.9 days as time to export and 12.3 as time to import in 2015, showed the data in the Asian Economic Integration Report 2015.
The ADB data showed that the lowest time consumption for export was in Bhutan (0.2-day) and highest in Afghanistan (12.1-day). It took the same average 0.2 number of days for import in the Buddhist kingdom on the Himalayas’ eastern edge, while in the neighbouring Afghanistan time to import was recorded at 18 days.
The ADB study said time to export (import) data measures the number of days required to export (import) by ocean transport, including the processing of documents required to complete the transaction It covers time used for documentation requirements and procedures at customs and other regulatory agencies as well as the time of inland transport between the largest business city and the main port used by traders.
The study, however, found that Pakistan was posting an improvement in different logistics performance indicators over the last three years.
The country’s score on the bank’s logistics performance index (LPI), taking European Union (EU) as the benchmark, rose to 73.1 percent from 66 percent in 2010.
In South Asia, India, however, scored some notches above at 79.7 percent, the highest in the region, in efficiency of border control and customs process; transport and trade-related infrastructure; competitively priced shipments; ability to track and trace consignments; and timeliness of shipments.
However, export and import from India is getting difficult as its logistics performance decelerated from 81.2 percent in 2010.
The ADB report, stressing on the development of special economic zones (SEZs), said they, “can be a driving force for increased trade, investment, and economic reform in Asia at a time the region is experiencing a slowdown in trade, provided the right business environments and policies are put in place.”
“The expansion in the number of SEZs from about 500 in 1995 to over 4,300 in 2015 shows the strong and rising interest to this form of policy experiment, though the success record is somewhat mixed,” said ADB Chief Economist Shang-Jin Wei, in a statement.
The report, citing different studies, said Pakistan faced challenges in establishing SEZs for various reasons, including, “political instability and lack of state support and local partnerships at the macro level; a weak package of incentives; an inadequate legal framework; and absence of a single window clearance facilities at the micro level.”
NETHERLANDS TO HELP STRENGTHEN TDAP
Dawn, December 10th, 2015
ISLAMABAD: Pakistan and Netherlands on Wednesday signed a memorandum of cooperation for institutional building of the Trade Development Authority of Pakistan (TDAP) and capacity building of other business support organisations in Pakistan and to provide export coaching programme to Small and Medium Enterprises (SMEs) to meet the requirements of GSP+.
The agreement was signed between the TDAP and Centre for Promotion of Imports from developing countries (CBI) in The Hague, Netherlands, said a message received here. Federal Minister for Commerce Khurram Dastagir Khan attended the signing ceremony.
During his meeting with the Dutch Minister for Trade and Development Cooperation, Ms Ploumen in Amsterdam, Dastagir urged Dutch companies to invest in dairy, horticulture and agriculture and livestock research.
The minister also attended the ceremony to launch the Netherlands-Pakistan Business Facilitation Forum (NPBFF).
The purpose of the forum is to facilitate and create awareness among the Dutch trade and investment sectors with regard to opportunities created in the wake of GSP+ and China-Pakistan Economic Corridor.
Addressing another seminar on global value chains, the minister presented Pakistan’s case especially in the textile sector.
He apprised the gathering regarding efforts of the government to improve working conditions in the country.
He said that with the grant of GSP+ to Pakistan, there is a growing urgency amongst the businessmen to know and implement good manufacturing practices to make workplaces safer and accountable.
The Pakistan government and ILO have been partnering for many years to bring meaningful measures into the place.
Pakistan reluctant to include India in APTTA
Dawn, December 10th, 2015
ISLAMABAD: While India is ready to join Afghan-Pakistan Transit Trade Agreement (APTTA), Islamabad is reluctant to include a third country in the arrangement.
Pakistan recently turned down a suggestion of including India in transit trade agreement with Afghanistan and Tajikistan.
“We have conveyed our stance to the Afghan government in this regard,” an official of the commerce ministry told Dawn.
According to the official, inclusion of a third country in a bilateral arrangement does not make sense anyways but more so in case of India. “There is a pro-Indian lobby in Afghanistan which wants Islamabad to allow Indian goods transport via Wagah border” the trade officer said anonymously.
Indian External Affairs Minister Sushma Swaraj on the sidelines of Asia summit said that India was ready to join the APTTA. She said India has created facilities to receive Afghan trucks coming through Pakistan.
Indian demand for joining the treaty is based on the perception that it will allow India to export goods via Wagah border to Afghanistan but for obvious reasons Islamabad is not inclined to grant the facility at the movement.
As an alternative India is investing in port project at Chabahar in Iran for access to Afghanistan market but Wagah is the most economical route for it for exports to Afghanistan and onward to Central Asian States.
With the support of Asian Development Bank, Pakistan has initiated a project to establish three land port authorities at Wagah, Landi Kotal and Chaman border points.
Once these land ports are established, trade on land route will be facilitated, the official in the commerce ministry said.
Meanwhile, Finance Minister Ishaq Dar received Owen Jenkins, British Prime Minister’s Special Representative on Afghanistan-Pakistan affairs, here on Wednesday.
Jenkins was accompanied by British High Commissioner, Philip Barton and Head of UK’s Department for International Development (DFID) Joanna Reid.
During the meeting, they expressed unanimity of views on efforts for peace and development in Afghanistan which would help achieve stability and progress in the whole region.
They also agreed that the Asia Conference would play a contributing role towards achieving this objective.
The visiting team appreciated the progress Pakistan and Afghanistan have made in the CASA-1000 energy project.
The finance minister shared with Jenkins the details of important developments in the Pakistan-Afghanistan economic cooperation. He apprised Jenkins of the headway made during the recently concluded Joint Economic Commission meeting, especially in the realm of trade facilitation.
He said that Pakistan has undertaken Kabul-Jalalabad highway project which is progressing well as it wants to promote regional connectivity with Afghanistan.
NEWS COVERAGE PERIOD NOVEMBER 30TH TO DECEMBER 06TH, 2015
CHINA’S MOST POWERFUL WEAPON IS TRADE
Dawn, Business & Finance weekly, November 30th, 2015
THIS ought to have been an excruciatingly embarrassing time for Najib Razak, Malaysia’s scandal-engulfed prime minister, to meet the leaders of the free and not-quite-so free world. The development fund he helped set up, 1Malaysia Development Berhad, is linked with multiple international probes into suspicious transactions. Weighed down by $11bn in debt, it is fighting to stay afloat.
Instead, Mr Najib, fresh from the glow of finding $700m from an unnamed Middle Eastern donor in his personal bank account, appeared to relish the chance of hosting the US president and Chinese premier, both of whom were in Kuala Lumpur last week to attend regional gatherings.
As well he might. Barack Obama, who badly needs Mr Najib to support a broad agenda, from counter-terrorism to free trade, went decidedly easy on a leader who stands accused of misappropriating state funds on a massive scale. Among other things, Mr Obama praised Malaysia as being ‘extraordinarily helpful’ in fighting Isis with a counter-narrative of moderate Islam. He also acknowledged Malaysia’s importance as a signatory of the Trans-Pacific Partnership, a trade pact that Washington hopes will bind it to the world’s most dynamic region and complement its much-discussed (though not-so-much enacted) military pivot to the Pacific.
Li Keqiang, the Chinese leader, went one better. He showered Mr Najib with gifts — as if $700m was not enough. State-owned China General Nuclear Power Group coughed up $2.3bn to buy energy assets belonging to 1MDB, thereby relieving its debt misery. Mr Li talked glowingly about the potential for other big Chinese investments, including a planned high-speed rail link from Kuala Lumpur to Singapore. The two traded purchases in each other’s debt as lovers might trade poems.
The usual view of China’s rise is that it presents Asian countries with a tough choice. How, for example, should Australia balance its commercial interests with China, by far its biggest trading partner, against its deep security interests with the US? The answer is that it is not always easy. Australia, whose 24 years of recession-free growth owes much to China’s hitherto voracious demand for commodities, has a sometimes tetchy relationship with its economic benefactor. Sydney has been wary about Chinese investments in farmland, telecommunications and minerals.
Yet for less well-off countries there may be an alternative: play one off against the other for the best possible deal. A case in point is Pakistan. An on-again, off-again ally of Washington, Islamabad has consistently stuck close to Beijing. It has been rewarded with the promise of huge investments in its rickety power and transport sectors. China has talked grandiosely of building an 1,800 mile-long corridor linking Pakistan’s deep-sea port at Gwadar to its own restless Xinjiang region. If even a fraction of the $46bn Beijing has flashed comes good, it could be transformative.
Indonesia, too, has been canny. Recently, it played off China against not the US but Japan. After years of talking to Tokyo about a $5bn bullet train, at the last minute Jakarta took the Chinese shilling. Beijing offered a financing deal too good to pass up. Wrongfooted Japanese diplomats promised to redouble efforts to win the Kuala Lumpur-Singapore rail link also in Beijing’s sights.
This sort of soft commercial tussle, though less headline-grabbing than scraps over artificial islands in the South China Sea, may turn out to be more significant. If Washington has the TPP, Beijing has the Regional Comprehensive Economic Partnership. The US has the World Bank and Asian Development Bank. Now Beijing has the Asian Infrastructure Investment Bank, which could start funding projects next year.
Beijing’s trump card may be its One Belt, One Road plan to link China to Europe and the Middle East via railways, roads and ports spanning central Asia and the Pacific and Indian oceans. For the multiple countries that lie along those routes, from Myanmar and Kazakhstan to Indonesia and Sri Lanka, there is money and concrete to be had. And money talks. Even the UK is not immune to the pull of China’s red dollar.
Money can only buy you so much. Myanmar, Sri Lanka and the Philippines have each resisted the gravitational pull of China. Myanmar’s political reform and overtures to Washington were driven by the generals’ fear of being beholden to Beijing. Sri Lanka’s voters kicked out former president Mahinda Rajapaksa because he was seen to have cosied up too closely to China. And the Philippines has put its security concerns ahead of its economic ones, risking Chinese wrath (and banana boycotts) by taking Beijing to international court over a sovereignty dispute.
Yet the battle is on for the hearts and minds of Asia. It will be won as much by engineers as by military strategists.
TRADE ROUTE WITH TAJIKISTAN URGED
Dawn, December 3rd, 2015
ISLAMABAD: The Ministry of Commerce on Wednesday urged the Gilgit-Baltistan (GB) government to build a road to explore Tajikistan’s markets for Pakistani goods and further link it to the China Pakistan Economic Corridor (CPEC) so that the region could avail economic opportunities.
In a meeting with GB Chief Minister Hafiz Hafeez-ur-Rehman, Commerce Minister Khurram Dastagir Khan said that already a jeep track, which runs through Ghizer district to the Wakhan border, connects Pakistan to Tajikistan and has been used by traders for a long time.
“In order to facilitate trade between Pakistan and Central Asia, a new route linking GB with Tajikistan through the narrow Afghan belt of Wakhan should be opened,” he said.
He also offered technical facilitation for establishing Gilgit Industrial Zone. “This will be the first meaningful incentive in GB to establish industries in that region,” he said.
Trade relations: President talks trade with Brazil
The Express Tribune, December 3rd, 2015.
ISLAMABAD: Relations between Pakistan and Brazil are marked by cordiality and there is a considerable potential to boost trade between the two countries, said President Mamnoon Hussain on Wednesday.
Talking to ambassador-designate of Pakistan to Brazil S M Burhanul Islam at the Aiwan-e-Sadr, the president underscored the need to translate the existing goodwill in building solid trade and commercial ties. The president advised the envoy-designate to focus on increasing Pakistan’s exports to Brazil and attracting Brazilian investment for joint ventures.
He said that the completion of China-Pakistan Economic Corridor (CPEC) would open up immense business and trade opportunities not only in China and Pakistan but the entire region and the whole of Middle East. He suggested that Brazil can enter into joint ventures with Pakistan for exporting their products to the emerging market.
PAKISTAN TO ENHANCE DEFENCE EQUIPMENT PRODUCTION, TAP GLOBAL MARKET
The Express Tribune, December 4th, 2015.
ISLAMABAD: Federal Minister for Defence Production Rana Tanveer HUSSAIN has said the government was committed to enhancing defence production in the country and export surplus quantity to help them meet their needs.
He said this while addressing a two-day seminar on Public-Private Partnership in defence production and export on Wednesday.
He added that the purpose of the seminar was to provide a platform for entrepreneurs, financial experts, engineers, policymakers and academics to share views and make recommendations for developing a draft policy framework for promoting public private partnership in the defence industry and export of Pakistani equipment.
He also commended the Defence Export Promotion Organization (DEPO) and Center for International Strategic Studies (CISS), Islamabad, for organising the first national level seminar on the subject. “The seminar was organised on the direction of Prime Minister Nawaz Sharif and it was his vision to re-structure the whole domain of defence productions by enhancing public-private partnership,” said Hussain.
“It is very satisfying to note that representatives from private and public defence industry, research organisations, universities and government departments are participating in the seminar,” said the minister, adding that the recommendations will be compiled in the seminar report before a defence production and export policy is developed.
“The seminar will keep in view the long term defence needs of Pakistan as well as needs of the states to which we would like to export our defence equipment. A comprehensive defence production and export policy framework will hopefully help enhance indigenous defence equipment’s production and export,” the minister remarked.
POLITICAL MATURITY MUST FOR IMPROVING PEACE, TRADE
Dawn, December 5th, 2015
LAHORE: Peace is only possible in the region when Saarc countries’ leadership shows political maturity and promotes mutual trade and relations among member states, said Minister of Commerce Khurram Dastagir on Friday.
He was speaking to reporters after the inauguration of 12th Saarc Trade Fair and 9th WEXNET at Expo Centre.
“Pakistan’s leadership has given a positive response to maintaining peace and promoting trade activities in the South Asian region and it expects others, especially India, to reciprocate in the same manner.”
He said a conference involving regional peace and prosperity was taking place in Afghanistan next week. “Pakistan would welcome role of other regional countries as peace in Afghanistan was a major priority.”
He said Pakistan wanted good relations on equal footing with India, adding that South Asian Association for Regional Cooperation (Saarc) countries needed to establish trade blocs.
“Although relations between Pakistan and India are tense but we shall continue efforts to maintain peace and prosperity on basis of equality, integrity and independence. Pakistan has always proved to be a matured state and is now awaiting India’s reply,” he noted.
To a question, Dastagir said he was unable to speak about visa problems between Pakistan and India as the ministries of interior and foreign affairs were responsible for issuing visas.
He said the Indian government could better tell the reason why foreign minister Sushma Swaraj was not coming to Pakistan. He hoped she would attend the upcoming Saarc Exhibition.
Responding to another question, the minister said Afghanistan and Maldives did not participate in the trade fair owing to many reasons.
Speaking on the occasion, Saarc Secretary General Arjun Bahadur Thapa said they had been waiting for the last three years to participate in Saarc trade fair. He thanked all international trade bodies and chambers for the purpose. He bemoaned that mutual trade volume among Saarc countries was only five per cent of their total trade which was very less and needed to be enhanced.
This year, the Trade Development Authority of Pakistan combined the Saarc fair and WEXNET. Around 350 stalls from Pakistan, 24 from India, 12 from Sri Lanka, six from Bangladesh, three from Nepal and one from Bhutan attracted good number of people.
GOVT TO ALLOW IMPORTS OF NEW PRODUCTS
Dawn, December 6th, 2015
ISLAMABAD: The government has decided to make changes in the import regime to allow imports of new products.
The proposed regulatory measures include allowing import of new restricted products, while putting a ceiling on certain facilities.
The changes will be made in the import order through the proposed Strategic Trade Policy Framework (STPF), an official in the commerce ministry told Dawn on Saturday.
The ministry has sent a summary to the prime minister secretariat, while these measures were already approved by a cabinet committee on production and exports, headed by Finance Minister Ishaq Dar.
“The same will be submitted to the cabinet for final approval,” the official said.
Despite repeated requests to get an official version on the proposals, the ministry did not respond.
However, a draft of the STPF showed that the commerce ministry has proposed to allow import of three-wheelers for disabled persons. It is also proposed to put the condition of Euro-II compliance for import of two- or three-wheelers.
The government is considering allowing the imports of five years old specialised vehicles subject to pre-inspection in the exporting country.
It is also under consideration to lift a ban on import of poultry from South Korea, Russia, Kazakhstan, Mongolia, Turkey, Greece, Croatia, Italy, Azerbaijan, Ukraine, Iraq, Bulgaria, Slovenia, Austria and Bosnia, subject to certification from respective veterinary authority of the exporting country.
In the telecom sector, it has been proposed to ban import of digital enhanced cordless phone. While, terminal equipments such as mobile handset and tablets import may not be allowed without PTA’s approval.
Imports of mercury and mercury compounds have been restricted to industrial consumers having valid environmental approval.
In the import of ozone depleting substances, the ministry of climate change will determine the quota.
Import of 3D printers will be subject to NOC from the ministry of interior, while for aerial vehicles and night-vision goggles NOC will be mandatory from ministry of defence.
The ministry proposed that no conditions will be linked to the import of plastic scrap for the units importing for the first time. Pyrolysis plants were also allowed to import used tyres. At present the facility is only available to industrial consumers.
Raw materials in the restricted list may also be allowed to be imported by manufacturer-cum-exporters under the DTRE scheme, Temporary Importation Scheme, Bonded Warehouses, Common Bonded Warehouses and Export oriented schemes, which will be subject to conditions.
It is also proposed to allow import of pesticides inter-alia subject to pre-shipment inspection (PSI) certification.
TPP DEAL WORRIES BANGLADESH TRADE LEADERS
Dawn, OCT 12, 2015 06:02AM
REFAYET ULLAH MIRDHA
ECONOMISTS and leaders of trade bodies fear that Bangladesh is set to lose its competitive edge in the global apparel business as trade ministers of 12 Asia Pacific nations last week struck a deal in Atlanta.
The hard-won landmark Trans-Pacific Partnership (TPP) agreement to create the world’s largest free-trade area, encompassing 40pc of the global economy, came after five days of round-the-clock talks.
But local exporters will face uneven and tough competition as the TPP has created the preferential trade zone between 11 countries including Vietnam, Bangladesh’s direct competitor in the global apparel market, and the US, the country’s single largest garment export destination.
At present, Bangladesh pays 15.62pc duty on its garment exports to the US, whereas Vietnam pays 8.3pc. The deal will make Vietnam’s garment exports to the American market completely duty-free.
Bangladesh’s competitiveness in the US market will erode, said Mustafizur Rahman, executive director of the Centre for Policy Dialogue, key civil society think tank in Bangladesh.
Furthermore, Bangladesh’s duty advantage on garment exports to some other TPP nations — Canada, New Zealand, Japan, Australia and Chile — will also take a hit.
“The deal has created an opportunity for Vietnam to get zero-duty benefit to enter markets in Japan, Australia, New Zealand and Chile. Bangladesh as a Least Developed Country has long been enjoying the same benefits in the same markets,” Rahman said.
The TPP is a mega regional trade deal, completely apart from the World Trade Organisation (WTO). So it will have an important implication for Bangladesh, as the country is a strong player in the world apparel business, he added.
“Investment decisions by entrepreneurs will also be affected by the trade agreement, making Vietnam a stronger candidate as a preferred destination, due to zero-duty access to other TPP nations, which control about 40pc of global economy,” Rahman also added.
“So, we should reduce the cost of business to maintain our competitiveness in international trade. We should also prepare to join such a mega deal, as some other countries are also planning for the agreement,” he said.
Bangladesh should also explore the issue of benefitting from the deal even without being a member of the TPP, and raise the issue at the upcoming 10th WTO ministerial meeting scheduled to be held in Kenya in December, he said.
The duty difference between Bangladesh and Vietnam — about 16pc for apparel export to the US — creates too much pressure, which the TPP will increase, said Matlub Ahmad, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
“So, we should focus not only on the US market, but also on the other countries where Bangladesh enjoys duty benefit. We should also diversify our apparel items for more value addition.”
“We should increase productivity in the factories to cushion ourselves against the probable losses in garment exports,” Ahmad said.
“If we see Bangladesh suffering massively, we will sit together and find solutions to the issue,” Ahmad added.
Vietnam will be a big beneficiary from the deal, said Ahsan H Mansur, executive director of Policy Research Institute, even though he could not quantify how much Bangladesh will lose every year as a result of it.
If Bangladesh had been a strong player in raw material exports such as yarn, fabrics and fibres, it would have benefited slightly from the deal, Mansur said. “But we do not export garment raw materials.”
He also said Bangladesh should liberalise its tariff structure as some other countries might also join the TPP in the near future, he said.
The average tariff in Bangladesh is 55pc, which limits the economy’s openness to business.
Pacific trade ministers including the US, Australia and Japan have reached a deal on the most sweeping trade liberalisation pact in a generation, which will cut trade barriers and set common standards for 12 countries, an official familiar with the talks said on Monday, the Guardian said in its report just after reaching the mega deal.
More than 18,000 taxes imposed by various countries on US products will be eliminated thanks to the partnership.
The deal could reshape industries and influence everything from the price of cheese to the cost of cancer treatments.
THE ‘ANYONE BUT CHINA’ CLUB NEEDS A GATECRASHER
Dawn, Business & Finance weekly, October 12th, 2015
THROUGHOUT the years of arcane and secretive talks that culminated in this week’s Trans-Pacific Partnership agreement, participants have brushed aside the notion that the TPP was designed to exclude China. This was not, its advocates protested loudly, an ‘anyone but China club’. Perhaps too loudly.
Those assertions strained credulity. When their guard slipped, the TPP’s cheerleaders often spoke of the new pact not in terms of economics but of geopolitics.
The TPP in its realpolitik guise was the economic complement to Washington’s military pivot to Asia, a means of binding the US more closely to its Asian allies in the face of a resurgent China. In a much-discussed recent paper for the Council on Foreign Relations, Robert Blackwill and Ashley Tellis wrote that the TPP should be seen as part of ‘grand strategy’ to push back against China’s rise.
By signing preferential trade deals with allies, Washington could help stop China from freeriding on the international trading system and counter what they called Beijing’s ‘geoeconomic power’. Even this week, Barack Obama, the US president who has pinned much hope on the TPP’s legacy-burnishing effects, could not resist a dig at Beijing. “We can’t let countries like China write the rules of the global economy,” he said.
Now that the TPP framework has been agreed, if not yet ratified, member states should make good on their word that their club is not barred to Chinese entry. They should invite Beijing to join. China should go one better still. It should call everyone’s bluff by starting negotiations to do just that.
The idea is not as outlandish as it sounds. From Beijing’s perspective, there are good reasons to be inside the TPP tent. True, the TPP — less of a trade pact and more of a behind-the-borders exercise in protecting investments and standardising regulations — has faults aplenty. It goes too far in strengthening corporate clout by allowing companies to sue sovereign powers accused of eroding their profits.
True, too, the TPP contains provisions against state exercise of economic power that seem almost designed with China in mind. Even so, the aims of the TPP and those of China’s hoped-for economic transformation are roughly aligned. In the late 1990s, Zhu Rongji, then premier, led China’s last great economic overhaul by using its 2001 accession to the World Trade Organisation to push domestic change. Today the TPP could play a similar role.
Take the TPP’s prohibition of preferential treatment of state-owned enterprises. China falls short of that standard, supplying its behemoth SOEs with everything from cheap credit to cheap electricity. Yet Beijing has explicitly said it wants to stop such practices by forcing its mostly inefficient SOEs to operate on a more commercial basis.
Similarly, the TPP has strict provisions on intellectual property covering trademarks, copyrights and patents, all areas flouted by Chinese companies. Yet China’s leaders know this has to change too. As their own companies, some of them heavy spenders on research and development, move up the value chain, Beijing will want to protect their innovations rather than encourage a promiscuous attitude towards intellectual property.
The TPP has environmental provisions to prevent countries from attracting investments through trashing their own ecosystem. Again, China is moving gingerly in this direction as it seeks to clean up the environmental wreckage its early-stage industrialisation has caused. On labour issues too, China’s domestic reform agenda and TPP provisions are in sync. China wants to see a higher proportion of output in the pockets of its workers, who would then have more money to spend.
Certainly, Beijing would be wary of unleashing genuinely independent trade unions. But it may at least be able to pay lip service to the idea of collective bargaining in the country’s own economic interests. The TPP might be good for China, then, by kick-starting its stalled economic transformation from state-led manufacturing to private-led services. But could it possibly be allowed to join? The hurdles may not be as high as they seem.
Other countries, such as Vietnam, are TPP members. Vietnam is a one-party state with coddled SOEs and an attitude towards intellectual property every bit as cavalier as China’s. If Hanoi can join, surely Beijing can make the grade as well.
Shinzo Abe, Japan’s prime minister, has been one of the most explicit in envisioning the TPP as a geopolitical organisation. Yet this week he appeared to open the door to Chinese membership, saying the TPP would have more ‘significant strategic meaning if China joined’. Mr Abe is right. Without China, the TPP looks like a containment strategy in disguise. With China on board, it could help ease Beijing into a post-WTO world. The TPP might then begin to resemble the forward-looking trade pact its advocates pretend it always was.
‘HOSTILE INDIAN POLICIES ARE WASTING ECONOMIC DEVELOPMENT OPPORTUNITIES’
Dawn OCT 13, 2015
ISLAMABAD: The minister for planning, Ahsan Iqbal, has said India was wasting the opportunity to develop a regional economic hub in South Asia because of their hostile policies.
The minister was speaking at the Institute of Strategic Studies Islamabad (ISSI) on Monday, at a public talk on the ‘Imperatives of Peace and Development in Pakistan’.
Mr Iqbal said the prime minister wanted to adopt a zero conflict policy with the neighbours but “it is unfortunate to see that India is not focused on promoting a regional development agenda”.
He said the escalating tension in the region might be a ploy by the Indian government to move Pakistan’s focus from current development-oriented policies. He added: “Pakistan’s de-escalation policies have been internationally recognised. We want to talk about South Asia and the problems here that are hindering growth and prosperity in the region.”
Govt vision will make Pakistan one of top economies by 2047, says minister
The planning minister said South Asia has the world’s largest poverty mass and that leaders of the region had a responsibility to address the issue.
Mr Iqbal blamed lack of planning by the previous government for the country’s economic problems. He informed the audience about ‘vision 2025’ which is aimed at maintaining economic growth and then transforming it into economic development. He said the government’s strategy, based on seven pillars and policy reforms, would lead Pakistan to become one of the top 10 economies by 2047.
He highlighted the government’s efforts to bring about a ‘knowledge revolution’ in Pakistan but admitted that school -level education across the country was not up to desired standards.
“This is because provincial bureaucracy is not willing to delegate power to district education departments,” he said, adding that “secretary education should not be involved in the hiring, promotion and transfers of teachers and other employees”.
Masood Khan, who is the director general ISSI, said Pakistan’s economy had recovered from setbacks of the past and had flourished, which was evident in the country’s economic ratings by international economic institutions.
He said the country should continue with the current positive outlook and carry on to attain an even higher level of sustainable growth and development.
Khalid Mehmood, chairman board of governors ISSI, said Pakistan should continue working towards a peaceful neighbourhood policy.
He said: “The most serious challenge faced by the region is terrorism and Pakistan’s role in fighting it has been appreciated internationally.”
He added that India had tried to disrupt our fight against terrorism by escalating tension on our Eastern border.
Mr Mehmood stressed on the importance of not losing focus and continuing to work towards development and growth.
‘PUBLIC-PRIVATE PARTNERSHIP TO HELP OVERCOME ECONOMIC CHALLENGES’
The News, October 17, 2015
LAHORE: Lahore Chamber of Commerce and Industry (LCCI) President Sheikh Muhammad Arshad has said that the solution of economic challenges lie in strengthening of public-private partnership.
Talking to the delegations of Auto Air-conditioning Association of Pakistan led by Malik Muhammad Nadeem, Pakistan Auto & Spare Parts Importers & Distribution Association (PASPIDA), Homoeopathic Association led by Saif-ur-Rehman and Hamza Bukhari, All Pakistan Paper Merchants Association (APPMA) led by Senior Vice Chairman Khamis Saeed Butt and All Pakistan Cottage Industry & Small Traders led by Ghulam Sarwar Malik, he said that strong public-private partnership can help surmount economic challenges being faced by the country.
He said that the Lahore Chamber aims to promote trade and investment in the country by enacting the policies of the government and securing a business-friendly environment.
He stressed the need for developing regional, product-specific and target-oriented marketing strategy.
New markets and new products need to be explored to reduce the country’s dependence on a few commodities and countries, he said.
Briefing the participants about the LCCI’s role in the policy making, Arshad said that the LCCI is going to establish more than 100 sector-specific standing committees. These committees would collect private sector feedback and analyse and filter the same through experts.
LCCI Senior Vice President Almas Haider and Vice President Nasir Saeed said that the chamber monitors the budget, identify anomalies and these coupled with revised proposals are again communicated to the relevant policy making departments.
They said that the LCCI also keeps liaison with foreign missions commercial sections and an exchange of information was ensured, especially sector reports.
They also called for the exploration of non-traditional markets to generate the much-needed foreign exchange.
The economy has become the most modern warfare gadget of the present day world and the only economically strong countries would have a role in the coming days, they said.
Lauding the role being played by the Lahore Chamber of Commerce and Industry in removing the bottlenecks in the way of promotion of business, they said that a lot has yet to be done for the economic well-being of the country and its people.
WTO REPRESENTATIVES IN PAKISTAN TO REVIEW TRADE POLICY
The News, October 16, 2015
KARACHI: The World Trade Organisation (WTO) has sent its team of trade policy experts to Pakistan to inform, advice, and educate the government and the private sector stakeholders in the field of trade, said SM Muneer, Chief Executive Trade Development Authority of Pakistan (TDAP) at a seminar on Thursday.
TDAP assisted WTO Geneva, Ministry of Commerce (WTO Wing) to organise “Trade Policy Follow up Review Seminar” at a local hotel, where Arne Klau, counsellor, WTO Secretariat, Geneva and Khilji Usman Ali, Trade Policy Analyst, WTO Secretariat, Geneva were the key speakers.
TDAP chief executive said they were required to know the details of the trade related initiatives of the world body, which were likely to shape and determine the future course of world trade. The objectives of the seminar were to explain the broad details of the trade policy presentation given by the government of Pakistan to WTO, with a view to bring the trade stakeholders on board – both about the current status of the trade policy position of the government of Pakistan, and about the broad outline of the policy priorities of the WTO.
Arne Klau of WTO provided an overview of the Trade Policy Review (TPR) at the WTO, which is undertaken every six years for each WTO member country.
He provided details about the TPR’s objectives, its basic parameters, process, mechanism for dissemination and use of results, and the benefits of the whole exercise.
He provided information on the latest trade policy review for Pakistan completed by the WTO in 2015 during which the main features of Pakistan tariff regime were highlighted along with relevant economic issues and its comparison with the regional countries.
In his presentation Usman Khilji of WTO provided an overview of the economic issues related to Pakistan’s trade policy regime. He pointed out that recovery of taxes and power supply issues were among the major problems being faced by the country. He also mentioned the decline in Pakistan’s trade as a proportion of GDP from over 35 percent in 2007-08 to around 31 percent in 2013-14 and concentration of exports in textile, clothing and agriculture sectors.
Khilji provided a detailed overview on the Trade Facilitation Agreement (TFA) under enactment at the WTO.
The TFA is expected to become operational by the end of 2015 upon its rectification by 2/3 rd of the WTO members.
It is expected to bring in substantial savings in time and cost for international trading transactions by expediting movement, release and clearance of goods, and improved cooperation between customs and other authorities of various countries. Dr Usman Narejo, DG (TDAP) thanked the speakers and the audience.
MANGO EXPORTS INCREASE
Dawn, November 11th, 2015
KARACHI: Pakistan’s mango exports to European countries rose 47 per cent to 6,085 tonnes from 4,132 tonnes a year earlier. Exports to Iran increased to 12,878 tonnes from 12,056.
Pakistan Fruit and Vegetable Exporters, Importers and Merchant Association (PFVA) Chairman Waheed Ahmed attributed the rise to food ministry’s efforts which played a major role in averting a threat of ban by the EU on country’s fruit exports.
He appreciated the government for approving projects like common facility centres and pack houses in Karachi, Peshawar, Lahore and Multan.
Due to efforts of Plant Protection Department, the chairman said, China for the first time had agreed to accept the quarantine certificates of Pakistan for imports of fruit.¬
Government urged for steps to privatise public sector entities
PAKISTAN NEEDS REFORMS TO HARNESS ITS POTENTIAL: WTO
Dawn, October 18th, 2015
ISLAMABAD: In what appears to be a big challenge, Pakistan has to harness its potential through appropriate policies and reforms, said Deputy Director General of World Trade Organisation (WTO) Frederick Yonov Agah.
He referred to a vast pool of natural resources, a strategic geographical position and a large, willing and young labour force as potential, but considered its utilisation a challenge because it requires reforms.
He suggested that the reforms should be broad based, like improving business climate, liberalising trade regime and greater integration into the world economy.
While talking to Dawn during a visit to review country’s trade policy, Agah said that Pakistan faces a myriad of adverse circumstances such as security environment and recurring natural disasters.
“However, Pakistan’s economy has proved to be extremely resilient,” he remarked.
He acknowledged the country’s role in formulation of Bali package for Doha Development Agenda.
Commenting on expected gains this year in Nairobi, where WTO will be celebrating its 20 years, he said much will depend on member countries negotiations. The ministerial enable the members to hold talks on trade issues.
Over Regional Trade Agreements (RTA) and Bilateral Trade Agreements (BTA), Agah said the multilateral trading system exists side-by-side with these agreements.
“Whatever outcomes you get become multi-lateralise for the benefit of all members taking into account the principal of MFN,” he remarked.
He said the key objective of trade review is to assess the set of policy options over time. The information will not be used for any other purposes including dispute settlement.
The WTO secretariat has established an advisory centre which will help the member countries in preparing cases for dispute settlement. However, he suggested that member countries can seek help of the secretariat in getting technical assistance to build domestic capacity on WTO rules and laws.
Applied tariffs have been generally reduced all over the world mostly as a result of unilateral liberalisation, however, non-tariff barriers have increased. Asked whether WTO focusing on behind the border measures that are often used as regulatory mechanisms, he said it is for the members to agree on the agenda.
Agriculture is an unfinished agenda of the Uruguay round because the progress achieved was the maximum outcome possible at that time. He said it will be difficult to strike a balance between agriculture and industrial tariff negotiations.
The issue of the balance is because what is good for developed countries in agriculture is not good for most of the developing countries. The issue is of how to strike a balance which is the mandate of the member countries, he said.
The aid for trade concept was adopted at the Hong Kong ministerial, he said, adding that the concept was to help poor countries to build their capacity to harness their potential.
On a question of role for WTO in the sustainable development goals, he said trade is considered as enabler not means to achieve goals.
“We want the WTO to be considered a development policy tool,” he said and referred the case of China where poverty witnessed substantial decline because of growth in trade.
Regarding trade facilitation agreement, he said it will help developing countries to get maximum benefits.
He cited example of Africa where harmonisation of customs procedure between Kenya, Youganda and Rwanda has reduced transaction costs from $5,000 to less than $1,000 per container. Also it helps to reduce border clearance time from one month to a day.
He said Pakistan can also get benefits from China-Pakistan Economic Corridor after ratifying the agreement.
Plurilateral agreements are increasing such as Government Procurement Agreement, ITA, Environmental Goods Agreement (EGA), Trade in Services Agreement, Transpacific Partnership Agreement. “I think all these agreements are good”.
He said Pakistan should provide overall framework on trade policy which needs to be sequenced and time bound. This will help members to tell where the country is placed in the next review.
CLOUD LOOMS OVER TEXTILE EXPORTS
Dawn, Business & Finance weekly, October 19th , 2015
WITH the implementation of the Trans-Pacific Partnership — the free-trade agreement between 12 countries straddling the Pacific — still awaiting a nod by the US Congress, most non-TPP textile-producing nations have already started to assess the deal’s potential implications on their exports.
The 12 economies forming the TPP collectively represent 40pc of the world’s economic output. Though the deal’s relevant details are yet to be released by the TPP member countries, there is a broad consensus among experts that the “exports of textiles and apparel to the US from most non-TPP countries, including India, Bangladesh, Cambodia and Pakistan, will be hurt after the agreement”.
Vietnam, being a member of the TPP free-trade zone, is being tipped to emerge as the biggest winner from the deal, followed by Malaysia.
It was in anticipation of the conclusion of negotiations on the pact that Vietnam’s textile industry attracted more than $1bn in foreign investment in the first seven months of calendar year 2015.
WTO statistics quoted by foreign writers show that the 12 TPP partners altogether imported $65bn worth of textiles and $154bn worth of apparel in 2013 —accounting for 20pc and 32pc worth of global imports respectively. In 2014, 17pc of US textile and apparel imports of $17.8bn came from the TPP region.
“The impact of the deal on Pakistan’s textile and apparel exports is difficult to predict at the moment because we do not have the exact details of the deal,” M.I. Khurram, a major knitwear exporter, said.
A textile ministry official agreed, saying the ministry had so far not done any study on the possible impact of the TPP on the country’s textile and apparel exports.
“But the duty-free access that Vietnam will get to the American market will definitely affect us as it will erode our competitiveness in our second-biggest market after the European Union,” added Khurram.
Indeed, Islamabad has been pressing Washington for granting duty-free access to its textile and apparel exports in the large American market for some years now. But the efforts have so far not produced any result.
“We have long been urging the (Pakistan) government to vigorously pursue the issue of market access for our textile exports to the US in anticipation of the conclusion of the TPP deal,” asserted Shahzad Azam Khan, chairman of the Pakistan Knitwear Association.
“We wouldn’t have to worry about the impact of the TPP on our exports to the US if we had made serious efforts and secured duty-free access to the American market in exchange for our frontline role in the war on terror. Unfortunately, the economy is nowhere on the priority list of the government,” he argued.
With the domestic textile industry nearly on the verge of collapse because of various internal and external factors, many exporters insist that the conclusion of the TPP deal would not ‘damage them much’.
“Our competitiveness has already been eroded because of energy shortages, high electricity prices, taxes on exports and the import of subsidised textiles and apparel from India and China. What difference will it make to us if Vietnam or any other country gets greater market access to the US,” asked the frustrated chief executive of a major vertically-integrated company on the condition of anonymity.
The textile industry gets electricity at a rate of around Rs13 a unit, compared to Rs8-9 per unit in rivals Bangladesh, India, Vietnam and Sri Lanka. Besides, it faces a tax burden of over 12pc on its exports. And many exporters, especially the small and medium ones, are facing a liquidity crunch because the government is delaying their tax and other refunds.
Pakistan’s textile exports tumbled by over 10pc during the last financial year and by 14pc in the first quarter of this year.
He said some textile producers had already sold their factories and many have put them on the market for sale. “At least 35 spinning and weaving factories in Punjab have already closed down owing to losses. Others are running just one to two shifts per day. The TPP may only make our fight for survival a bit more difficult,” he contended.
PACIFIC PARTNERS RELEASE TRADE PACT DETAILS
The News, November 06, 2015
WASHINGTON/SYDNEY: The long-awaited text of a landmark U.S.-backed Pacific trade deal was released on Thursday, revealing the details of a pact aimed at freeing up commerce in 40 percent of the world’s economy but criticized for its opacity.
If ratified, the Trans-Pacific Partnership (TPP) will be a legacy-defining achievement for U.S. President Barack Obama and his administration’s pivot to Asia, aimed at countering China’s rising economic and political influence.
China has responded with its own Regional Comprehensive Economic Partnership (RCEP), a proposed 16-nation free-trade area including India that would be the world’s biggest such bloc, encompassing 3.4 billion people.
But TPP, which will set common standards on issues ranging from workers’ rights to intellectual property protection in 12 Pacific nations, was kept largely from public scrutiny, angering transparency advocates concerned over its broad implications.
It is opposed by labor unions and many of Obama’s fellow Democrats, including presidential candidate Hillary Clinton, who backed the developing trade pact when she was secretary of state during Obama’s first term.
Some pro-trade Republican lawmakers are also wary of the deal, heralding a tough fight to get the deal through Congress, although this is not expected before March.
Republican White House contender Donald Trump has labeled it a “disaster.”
The deal does not include measures demanded by some U.S. lawmakers to punish currency manipulation with trade sanctions or set monopoly periods for next-generation biologic drugs at 12 years.
Agreement on the pact, which was more than five years in the making, was trumpeted a month ago after intense talks in Atlanta broke a deadlock over trade in dairy products, pharmaceuticals and autos.
The fine print will be important. Details on local content thresholds for the auto industry are sketchy, for example, and U.S. footwear importers are waiting to see how long duties will stay.
The TPP would be a boon for factory and export economies like Malaysia and Vietnam. Anticipated tariff perks are already luring record foreign investment into Vietnamese manufacturing and both countries are expected to see increased demand for their key exports, from palm oil and rubber to electronics, seafood and textiles.
That could put pressure on several of Asia’s major developing economies, including the Philippines and Indonesia, which have recently expressed interest in signing up to the pact.. Thailand said it was studying the deal and may consider joining.
Japan has pledged to ease trade barriers on imported French fries and butter – products which have been in short supply in the Asian market – while Malaysia will eliminate tariffs on all imported alcohol for the first time in a trade agreement.
Other firsts cited by the partners – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam – include the first commitments to discourage imports of goods produced by forced labor and to adopt laws on acceptable working conditions, and the first prohibition on harmful fisheries subsidies.
JAPAN, US TO SET RULES FOR GLOBAL ECONOMY UNDER TPP DEAL
Dawn, November 7th, 2015
TOKYO: Prime Minister Shinzo Abe on Friday hailed a huge Pacific Rim free-trade deal, saying it showcased a bid by Japan and the United States to set rules for the global economy.
His comments come a day after the long-secret text of the Trans-Pacific Partner¬ship (TPP) was made public.
The massive document, posted online by several governments, offered the first detailed look at the world’s biggest free trade area, which aims to break down barriers to commerce and investment between a dozen countries comprising about 40 per cent of the global economy.
The US and Japan are the proposed bloc’s two biggest economies.
“Rules should not be something that are imposed on you — you make them,” Abe told an economic forum in Tokyo.
“The TPP is the structure where Japan and the US can lead in economic rule-making.”
Abe also said he would “enthusiastically welcome” South Korea and Indonesia, which have signalled interest in joining, into the zone, so long as they “accept the rules” that Tokyo helped write.
The pact, agreed a month ago, aims to break down trade and investment barriers among participating nations Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.
The deal now awaits legislative approvals in each one of the dozen members — a potentially contentious and lengthy process.
Abe and many Japanese experts have long supported the TPP, which should give greater foreign market access for “Japan Inc.”
But politically connected farm lobbies and some consumer groups have passionately opposed the zone, fearing it would destroy Japan’s agriculture by opening a floodgate for cheap foreign imports and altering Japan’s rules for consumer protection.
TRANS-PACIFIC PARTNERSHIP DETAILS SPARK FRESH DEBATE
Dawn, November 8th, 2015
WASHINGTON: President Obama proclaimed that the 12-nation Pacific Rim free-trade pact made public on Thursday is the “highest-standard trade agreement in history,” but opponents seized on specific provisions to argue that the final deal does not live up to promises.
The administration hoped that the full release of the thousands of pages of the Trans-Pacific Partnership (TPP), after years of negotiations behind closed doors, would help persuade wavering lawmakers to support the president’s effort to rewrite the rules of trade and investment in a sprawling region to benefit the US economy.
But a wide range of critics — from Ford Motor Co to environmental groups — said on Thursday that seeing the entire text of the deal for the first time only confirmed many of their worst suspicions. The continued opposition of these groups underscores the steep challenge Obama faces in order to win the pact’s ratification in Congress before his term expires.
“I know that past trade agreements haven’t always lived up to the hype. That’s what makes this trade agreement so different, and so important,” Obama wrote in a blog post. “If you take a look at what’s actually in the TPP, you will see that this is, in fact, a new type of trade deal that puts American workers first.”
The next step is for congressional leaders to schedule a vote, but even Republicans who have been supportive of Obama’s trade push reacted cautiously Thursday and gave few clues as to when the deal might be considered.
“Enactment of TPP is going to require the administration to fully explain the benefits of this agreement and what it will mean for American families,” House Speaker Paul D. Ryan (R-Wisconsin) said in a statement.
“I continue to reserve judgement on the path ahead. But I remain hopeful that our negotiators reached an agreement that the House can support because a successful TPP would mean more good jobs for American workers and greater US influence in the world.”
Shortly after the text was released, Obama formally notified Congress of his intent to sign the agreement, but he must wait 90 days before doing so under the terms of the “fast-track” trade powers that lawmakers granted him in the spring. This authority allows the deal to be considered without threat of amendments or filibuster.
White House aides said they were fearful that any delays could jeopardise the carefully negotiated agreement with countries, including Canada, Mexico and Australia, that account for about 36 per cent of the world’s gross domestic product.
The political climate around the 2016 presidential campaign — with several leading candidates on both sides publicly opposing the deal — could persuade lawmakers to delay a vote until after the general election or even until a new president takes office.
“We don’t believe that Congress should wait a year before acting,” White House press secretary Josh Earnest said, “but we are respectful of the need to give time to Congress and to the American public to consider the details.”
Obama has said the deal includes the strongest and most enforceable provisions to protect workers and the environment of any trade deal in history and is far stronger than past US deals such as the North American Free Trade Agreement in 1993.
For example, the agreement calls for a phase-out of subsidies some governments now give operators in fisheries that are either overfished or overcapacity, as well as an end to subsidies for vessels engaged in illegal fishing. The parties to the treaty account for a quarter of the global seafood trade, and countries such as Japan have traditionally helped offset the cost of fishing for their domestic industry.
Azizullah Goheer, secretary of the Pakistan Textile Exporters Association (PTEA), agreed with the view. “The TPP isn’t a major threat for Pakistan’s value-added textile exports (to the US) in the near term, but our industry’s eroding competitiveness is.”
His argument that the TPP did not pose an immediate challenge for Pakistan was based on two factors. First, the deal will not be implemented unless the US Congress sanctions it, and this may take longer than anticipated by the pro-TPP forces in Washington.
And two, the rules of origin provided in the deal say only the products made from yarn and fabric produced in one of the TPP countries can qualify for duty-free access under the pact.
“These two factors give our government enough time to put in place policies that will help our textile industry stand back on its feet and to make efforts to secure duty-free market access to the US market,” he insisted.
“It will be a shame to see Vietnam capture a much larger share of the global textile market without even producing cotton (like Bangladesh).”
PAKISTAN TO HAND OVER 2,281 ACRES OF GWADAR’S FREE TRADE ZONE TO CHINESE
The Express Tribune, November 10th, 2015.
By Peer Muhammad
ISLAMABAD: In a landmark ceremony, Pakistani authorities will formally hand over 2,281 acres of Gwadar Port’s free trade zone to the Chinese Oversees Ports Holding Company Ltd (COPHCL) on November 11 on a 43-year lease.
The ceremony will be held in Gwadar on Wednesday and will be attended by the Chinese delegation headed by Vice Chairman of National Development and Reform Commission Wang Xiaodao, who has already arrived in Pakistan.
The Chinese delegation comprises of all top level officials of the Chinese government and leaders of private companies. The Pakistani delegation will be led by Federal Minister for Planning, Development and Reform Ahsan Iqbal.
The event will also be attended by Balochistan Chief Minister Dr Abdul Malik and Federal Minister for Ports and Shipping Kamran Michal, said a senior official of the ministry.The government has already declared Gwadar port a free trade zone for the next 23 years.
The officer said that in this regard, a high level meeting of both authorities will be held in Karachi on November 12 to complete the formalities.
COPHCL will execute the port’s affairs through its three main companies including Gwadar International Terminal (GIT), Gwadar Marine Services Ltd and Gwadar Freezone Company Ltd.
GIT will also be responsible for the port’s operations by handling business related matters.
Gwadar Marine Service Ltd, will look at the port’s operation by providing allied services and Gwadar Freezone Company will look after affairs of the free zone area by developing and providing allied facilities to the investment companies in the free zone area.
After the formal handover of the free trade zone, all business affairs of the port will be carried out by Chinese authorities.
The officer said that Pakistan has delivered its end of the bargain and now it is upto the Chinese authorities to show their commitment.
Additionally, during the ceremony, inauguration of some projects will also be held including inauguration of school and health centres established by the Chinese in Gwadar.
The scheme is part of the China-Pakistan Economic Corridor (CPEC), an ambitious $46 billion investment plan linking western China to the Arabian Sea with infrastructure, energy and transport projects.
Pakistan is also raising a special security force of between 10,000 and 25,000 men to protect the port.
Earlier, Abdul Razzaq Durrani, the director general of Gwadar Port Authority, had said that land acquisition to build the economic zone had cost the Balochistan government around $62 million.
Gwadar port was built in 2007 with technical help from Beijing as well as Chinese financial assistance of some $248 million.