Govt trying to get GSP-plus status from EU

THE NEWS
Sunday, February 07, 2010
By our correspondent

KARACHI: The government is trying to negotiate with the European Union to get Generalised System of Preferences-plus status for Pakistan which will help exporters to compete in European markets.

In this regard, a booklet and a documentary have been prepared so Pakistan’s case can be well presented in the European Union. It shows how the cost of the war on terror is badly affecting the cost of doing business.

This was stated by Zafar Mahmood, Federal Secretary for Commerce, at the Karachi Chamber of Commerce and Industry (KCCI) on Saturday.

He said the war on terror was affecting industrial sectors of the country and was one of the major factors which was adding up to the cost of manufacturing and doing business. Eighteen factors had been identified including tangible and intangible factors which were adversely affecting the trade, he said.

Owing to the high cost of the war on terror, he said, investment from various sectors was being shifted to the war, which was badly affecting development in different sectors including energy.

He said European and American buyers were pressurising Pakistani suppliers to shift their manufacturing units to other places in order to ensure continuous and timely supply. He said exporters should share such type of information so the government could take up the issue because closure of any industrial unit would lead to unemployment and that in turn would create terrorists. “Unemployment is also one of the reasons for growing terrorism.”

He said a committee had been set up to look into the pros and cons of trade agreements with different countries, adding free trade agreement with China was not benefiting Pakistan though its aim was to provide benefit for both countries. However, “China is benefiting from it.”

He added Pakistani goods’ containers were rejected on technical grounds and no one was providing the details and the issue would be taken up.

He said eight per cent tax to GDP ratio was very low and governments could not sustain on that rate and tax collection had to be increased but systematically.

Regarding the Afghan Transit Trade, he said, a committee had been set up which was negotiating on various issues with Afghan officials.

The secretary said commercial counselors or commercial attaches would be appointed on merit and for this written test had been made mandatory and they would be on contract for two years. They would be given targets to achieve and their contract would be revised subject to their performance in the respective countries, he added.

He said drop in imports was not a good sign which showed that the purchasing power had decreased and production had dropped.

The secretary commerce said the KCCI should put on record the fake trade bodies’ issue and send its suggestions to the National Assembly Standing Committee on Trade and Commerce.

KCCI Acting President Rasheeduddin Rashid, Businessmen Group (BMG) Chairman Siraj Kassam Teli and Adviser to Sindh CM on Investment Zubair Motiwala were also present.

Some major issues were discussed including power and gas crisis, high utility tariffs, textile sector problems, Trade Ordinance 2007 and Afghan Transit Trade Agreement.

Businessmen said textile exports fell sharply as high operational cost and hike in power and gas tariffs affected export activities. Due to the high operation cost, exporters were unable to compete in the global market, they said, adding some concessons must be given to the textile sector in the form of exemptions and relief in taxes.

They said the Afghan Transit Trade Agreement had been massively abused by unscrupulous elements who imported products way above their actual demand in Afghanistan and brought the products into Pakistan.