Regulatory duty on steel will be abolished: Pervez Malik
Lahore, April 04, 2018 (PPI-OT): Federal Minister for Commerce and Textile Muhammad Pervez Malik has said that regulatory duty on steel will be abolished while government has differed second phase of FTA with China on demand of the Lahore Chamber of Commerce and Industry.While talking to the LCCI President Malik Tahir Javaid, in an exclusive meeting on Wednesday, Federal Minister said that concrete measures are being taken to boost the country’s exports. Secretary Commerce Mr. Javed, DG Trade Policy Muhammad Ashraf and LCCI Secretary General Shahid Khalil were also present.
Pervez Malik said that new and unconventional avenues are being focused for Pakistani merchandise to yield the desired results. He said that role of business community is important for economic stability of the country which is highest priority of the present regime. He said that government has opened all economic areas to achieve the goals of economic growth. He urged the private sector to becomeproactive to meet international standards and better marketing of products to compete effectively.
Pervez Malik said that businessmen should identify hurdles in the way of value addition of products and share with government to address problems. He urged businessmen to explore the untapped markets of Middle East and Europe which offer good potential for improving trade and exports. He saidbusinessmen should come up with creative solutions for improving tax revenue. He assured thatgovernment would provide infrastructure and play the role of facilitator while entrepreneurs have totake the lead to improve trade and exports and the economy.
The LCCI President Malik Tahir Javaid said that major factors contributing in decline of Pakistan’s exports are high cost of doing business, lack of product and market diversification, low level of technological advancement, non-compliance of international quality standards, underdeveloped human capital and unskilled labour. Following are the recommendations based on our findings to restrict unnecessary imports and enhance exports of value added products:
He said that a value addition (through technological advancement and skilled labour) push is highly recommended. Pakistan has to move from low value-added to technology-intensive high-value-added manufacturing in order to get its share in international trade. The Government must facilitate this process through new industrial reforms and trade facilitations to promote exports of high value added and sophisticated products.
Malik Tahir Javaid said Pakistan existing exports basket (product mix) and exports destinations need to be enhanced. By providing a broader base of exports and diversification, Pakistan can lower instability in export earnings, expand export revenues, upgrade value–addition and enhance growth through many new markets and products.
He said that Pakistan needs to get free or preferential market access in Africa, Latin America, Central Asian Republics (CARs), Russia and Australia etc. As African and Central Asian Republics (CARs) countries are emerging economies and there is immense potential of exports for Pakistan.
The LCCI President said that Pakistan has already signed free trade agreements with many countries like China, Bangladesh, Sri Lanka, Malaysia and some others but in most of the agreements Pakistan is facing trade deficit. There is a need to re- negotiate already signed free or preferential trade agreements of Pakistan by thorough consultation with Pakistan’s business community.He said that timely and adequate banking facilities should be enhanced especially in Africa, Russia, Central Asian States and South America to meet the exports commitments. Exporters should be allowed pre and post-shipment credit at competitive interest rates.
The LCCI President said that Pakistan has to strictly follow the technical standards under Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) standards in order to increase its exports to developed countries. Otherwise Pakistan would not be able to export its products to the developed countries. For instance due to non-compliance of sanitary and phytosanitary standards on fisheries and seafood products, mangoes and other agriculture products Pakistani exporters are facing restrictions by the developed countries.
Pakistan needs to take all possible measures to meet international quality standards and certifications for its exports. He said that Development of human capital and skilled labour is immense important to overcome the problem of low productivity, low value added and thus low exports. He said thatdeveloped and emerging economies of the world have enhanced and added value to their export products through effective usage of research and development. Pakistan must also invest in thepromotion of R and D to achieve export growth especially in high tech products.
“Government should work on priority basis, to improve the ease of doing business ranking. In order to lower the cost of doing business, government should cut down the duties and taxes on raw material. There must be cheap energy supply to the industry and the problem of multiplicity of taxes has to be addressed in order to promote industrial development. Exports of raw materials (e.g. limestone; salt; silica sand, etc.) must be discouraged through imposition of duty or other non-tariff barriers.
Exports of value added products only should be allowed and encouraged”, the LCCI President said and added that complete ban should be imposed on import of high value added manufactured products in order to protect domestic industry. However, inputs which are not produced or available locally should be duty free. For example, to protect and encourage domestic textile industry, import of readymade garments should be discouraged.
Malik Tahir Javaid said that nearly all countries impose standard certification for imports. Pakistan should also impose standardization requirement for discouraging unnecessary and sub-standard imports especially in food, textile, etc. It can be made mandatory for the importer to inspect the factory at the expense of the exporter, which is a lengthy and costly procedure. He said that by lifting regulatory duties on raw material and capital goods, domestic production can be enhanced.
Through increasing domestic production the demand and supply gap can be filled which would also control smuggling. Consequently, some sustainable improvements in balance of trade and balance of payment can be achieved. He also said that there should be coherence between investment, industrial and trade policies, so that Pakistan may achieve desired goal of increasing exports.
For more information, contact:
Lahore Chamber of Commerce and Industry (LCCI)
Lahore -54000, Pakistan