Commerce Division is expected to propose export target of $46 billion for the next five year Strategic Trade Policy Framework (STPF) whereas imports are targeted to be around $80 billion if current figure of $60 billion is kept in mind. The country''s exports are not showing expected growth despite around 30 per cent depreciation of rupee which is cause of concern for the policy makers. Prime Minister''s Advisor on Commerce, Textile, Industries and Production and Investment, Abdul Razak Dawood has already assured the business community that they would be taken on board in STFP formulation.
Commerce Division, in its letter to Chambers and Associations, has stated that it is undertaking an exercise to improve competitiveness of export oriented sectors. The import tariff e.g. customs duty and regulatory duty on imported inputs play an important role in increasing the cost of production especially of the manufacturing sector. In this context chambers and Associations in consultation with their members have been requested to list proposals for rationalisation of tariff on the new materials/ intermediate goods, which is affecting their competitiveness for consideration in the upcoming exercise for rationalisation of tariffs.
"The new proposals will be incorporated in the already drafted STPF prior to placing before the federal cabinet," the sources said, adding that Chambers and Associations have been given one week''s time for submission of their proposals.
Commerce Division in its initial draft has proposed the following measurers for competitiveness enhancement: (i) cost of doing business; (ii) tariff rationalisation on raw materials; (iii) productivity enhancement-enterprise productivity, skill development, energy efficiency, technology, up-gradation scheme (continuation with improvement; (iv) energy cost and efficiency audit support; and (v) expedited sales tax refunds and duty drawback.
According to Commerce Division, it has already conducted 12 consultative sessions in addition to buyers'' symposium, gender and trade conference and focused group discussion on gender mainstreaming.
In short-term, measures are being suggested for recovering lost exports by restoring competitiveness. In medium-term, leveraging strength of existing sectors, increase in AUP through product sophistication, attracting export-oriented investment and improvement in ecosystem are key measures whereas in long-term structural reforms for product diversification into innovation based sectors will be part of the policy.
Commerce Division will propose competitive valuation of currency, electricity price at Rs 9 per unit (based on direct wheeling) and new electricity connections to industrial units within 30 days and provision of LNG to industrial sector in 30 days.
The mission of new trade policy will be to transform Pakistan from a factor-driven to an efficiency-driven economy integrated into the global and regional value chains in the medium term and innovation-driven economy in the long term.
Commerce Division officials recently informed the Senate Committee on Commerce and Textile that draft STPF is ready to be submitted to the cabinet . Chairman Standing Committee directed Commerce Division to share the draft with the committee members, adding that the committee would call a dedicated meeting once all the members have gone through the STFP in detail.
According to Prime Minister''s Advisor Abdul Razak Dawood, National Tariff Policy was being prepared by the Commerce Division keeping in mind the interests of foreign and local investors, adding that following the approval from the cabinet, it will allow the Ministry to have a greater role in tariff setting.
