Trade policy focuses on creating export surplus

http://www.dawn.com/2007/07/20/ebr3.htm

By Mubarak Zeb Khan
ISLAMABAD, July 19: Commerce Minister Humayun Akhtar Khan said on Thursday measures taken in Trade Policy 2007-08 would help achieve the ambitious export target of $19.2 billion set for the current fiscal year.“The focus of the policy is to encourage value addition and more tax holidays for attracting investment to produce exportable surplus,” the minister said while replying to a question at a post-Trade Policy press conference.While defending the role of his ministry, Mr Khan said the if there were no surpluses in industrial production, what will be exported as the growth in the large scale manufacturing (LSM) declined from 18 per cent to less than 10 per cent during the current fiscal year.He suggested for a proactive and balanced policy to encourage industrialisation and create exportable surplus in the country. He said that the government introduced equity fund for brand acquisition, encouraging sanitary and phyto-sanitary (SPS) compliance and provided sectoral investment incentives to trade companies.Answering a question he said despite several challenges and difficulties exports increased from $8 billion to $17 billion in the last five years. However, he said focus of economic policies on revenue generation, reducing debt-to-GDP ratio has resulted in increase in imports but still there was no cause for alarm.He said that growing economies do need imports as there happens to be a strong correlation between higher imports and GDP growth.” However, the highest-ever trade deficit will be bridged through remittances and foreign direct investment.Mr Khan said Pakistan's trade policy was going on right direction adding that the public as well as the private sector can now go to international market and freely raise debt without affecting foreign reserve position.---He said that efforts were afoot to replace the non-recurrent with the recurrent adding that this would help enhance export growth.To a question he said that the current account deficit would not affect the government spending. The government has many ways to generate revenue like one per cent federal excise duty (FED)on imports, which would help generate additional Rs20 billion for the kitty.The minister defended his trade diplomacy, which, he said, had helped in getting preferential market access for Pakistani goods. He said many preferential trade agreements with many East Asian, Middle East and Far East countries are in the pipeline.Answering a question the minister said the legislation of the Reconstruction Opportunity Zones (ROZs) will be passed by the US congress soon. He said that these zones will be established in the entire NWFP, tribal areas and border districts of Afghanistan. The products produced in these zones will be exported to US duty free.He said that the expansion of positive list for trade with India has nothing to do with the trade policy. He said that exports to Afghanistan declined only in the POL products.Mr Khan defended the FTA with Sri Lanka and claimed that the trade with that country had increased. However, he said, that no auto parts are allowed to be imported under FTA from Sri Lanka.He said that major portion of the country’s imports was in oil and telecom sectors adding that the government has been working on a comprehensive strategy to increase exports and decrease the trade deficit.