1. STRATEGIC TRADE POLICY FRAMEWORK
2009 - 12
TRADE POLICY 2009
Ministry of Commerce – July 27, 2009
2. Scheme of Presentation
2
Policy Statement
Trade Review
Challenges & Opportunities
Synopsis of Strategic Trade Policy Framework
Proposed Trade P li Initiatives
P d T d Policy I i i i
Over arching
Sector S ifi
S Specific
Trade Diplomacy
3. In line with Manifesto of Pakistan Peoples Party, the
Trade Policy Aims at
3
Growth with Equity
Greater Opportunities for Gainful Employment
Sound Marco-economic Framework for Trade
Environment
Concern with Poverty Eradication and Environmental
Protection
Investing in Human Resource
Targeting Poverty Alleviation
Promoting Private Sector as Engine of Growth
Focus on Small Scale Sector Particularly Agriculture
4. Policy Statement
y
4
The Ministry of Commerce’s e deavo is to provide
e M s y o Co e ce s endeavor s o p ov de
medium term policy framework with focus on improving
supply side to achieve sustainable export growth.
The policy thrust would be to enhance quality, improve
business processes through structural transformation and
transferring resources to achieve production and export
of a more sophisticated and diversified range of products
5. 5
Trade R i
T d Review
Imports and E
I d Exports 2008-09
2008 09
6. Exports
p
6
Exports 07-08
07- US$ 19.1 Billion
19 1
Export Target 08-09
08- US$ 22.1 Billion
Actual Exports 08-09 US$ 17.8 Billion*
08-
• WTO estimated a 9% shrinkage in
Export Growth
•
global trade
- 6.7%
Pakistan is less hurt than competitors-
Export growth in China declined by
24%, India by 31% and Bangladesh by * Provisional
14%
7. Exports Review
p
7
Exports were 6.7% less than 2007-08 due to
p
Exogenous factors - demand shrinkage, financial crisis and
ensuing protectionist policies.
Domestic Factors - Power shortages/outages high financial
shortages/outages,
cost, bad law & order situation and competitiveness erosion
Traditional sectors like textile (- 9.5%), Leather (- 29%)
declined, whereas Rice ( %), Engineering g
, (8%), g g goods (26%),
( %),
Jewelry (35%) recorded growth in exports
10. Export Profile 2008-09
p
10
Other Mfg. Others
Group
G 4%
20% Food
17%
Petroleum
5%
Textile
54%
11. Export Destinations
p
11
0.9%
0 9%
008-09
6.2%
22.3%
20
26 3%
26.3%
44.3%
0.9%
0 9%
2007-08
5.9%
23.1%
28.5%
28 5%
41.5%
Oceania Africa Americas Europe Asia
12. Import Review
p
12
Imports were US$ 34.8 billion in 2008-09 as
2008 09
compared to US$ 40 billion in 2007-08 , a
decrease of 13 %
Lower imports are attributed mainly to demand
shrinkage of items in Transport Group (-41%), and
g p p( )
Textile Group (-29%) whereas imports of Petroleum
decreased by 17% due to drop in international
prices of crude oil; imports of fertilizer were lower
both in terms of value (39%) and quantity (45%)
16. Challenges
g 1/3
/
16
External Factors:
Economic downturn in our major markets:
Consumer confidence erosion in USA and its ripple effects in EU;
Economic slowdown
Buyers’ perception of Pakistan as a supplier of low
quality products and inability to deliver in bulk and in
time.
Negative travel advisories.
17. Challenges
g 2/3
/
17
Domestic Factors
High cost of finance
Energy Crisis (Electricity and Gas)
Law and Order
Lack of International Competitiveness
Investment declined to 19.7% of GDP as against
22.0% of last year
% y
Large Scale Manufacturing growth declined by 7.7%
(Jul-Mar) as against increase of 4.8% in 2007-08
18. Challenges
g 3/3
/
18
Sliding Down the Competitiveness Index
(Ranking among 131 countries)
Indicator Ranking 2007-08
g Ranking 2008-09
g
Overall Competitiveness 92 101
Infrastructure 72 85
Labour Market Efficiency 113 121
Financial Market Sophistication 65 71
Technological Readiness 89 100
Innovation & Sophistication 78 85
Factors
Source: Gl b l Competitiveness Report 2008 09 World Economic Forum
S Global C titi R t 2008-09, W ld E i F
18
19. Opportunities
pp
Favourable market access owing to bilateral
19
trade
t d agreements t
Potential of doubling the value- addition of
cotton of which Pakistan is the 4th largest
f
producer
Strong resource base in many sectors (food,
building stones, gems & jewelry, leather, rice,
cement, light engineering)
Growing Services Sectors
g
20. Inference
20
Pakistan is fortunate to be less hurt by global
recession and this has placed Pakistan in a position
to take “rebound opportunity” if :-
pp y
Supportive & Targeted policies are adopted to help
export sector increase competitiveness & improve
product sophistication
Supply side constraints like power shortages and high
cost of finance are removed
Law & Order situation is improved
22. Main Features
22
Three years strategic framework
Review mechanism
Well-defined
Well defined business processes
Shift from Comparative Advantage to Competitive
Advantage
23. Trade Policy Objectives
y j 1/2
/
23
People centric : Poverty alleviation and employment
generation through export led growth
1.
1 Enhance the competitiveness of Pakistan’s exports
Pakistan s
a) Increase the sophistication level of Pakistan’s exports by
increasing the technology component and value addition.
b) Trade Facilitation
i. Process Improvement
ii. Aligning Tax Reform with Trade Facilitation with the aim to reduce
the cost of doing business
g
c) Address supply side constraints – power shortage & high
financial cost
d)
) Reduce anti-export bias
p
24. Trade Policy Objectives
y j 2/2
/
24
2. Reducing Cost of Doing Business
3.
3 Protection and promotion of SMEs Slide 94
4. Focus on products with higher sophistication potential
5.
5 Promote agricultural development through exports
6. Enable Pakistani exporting companies overcome the
negative effects of global demand contraction
25. Services
Textiles
Focus Sectors of STPF 2009 - 12
Support to initiatives
pp
Develop and implement a
comprehensive export
h i t
in Textile Policy
25 plan
Focus Sectors Policy Thrusts
Pharmaceuticals Increasing overall
Leather competitiveness
titi
Moving up the
Gems & Jewelry
sophistication ladder
p
Engineering Goods SMEs Cluster development
Surgical. Medical, Creating supply and
Dental,
Dental Beauty care demand side linkages
d d id li k
instruments Improving Domestic
Agriculture & food Commerce in these sectors
Halal Products
26. Strategic Trade Policy Framework 2009-12
26
Linking Trade Policy 2009-12 with other
development strategies by synergising the
‘’Functional Linkages’’ between
Functional Linkages
trade and industry;
trade and investment;
trade and education;
trade and science & technology
technology;
trade and social protection policy
27. Overarching Goals of Strategic Trade Policy
Framework 2009-12
27
Ensuring sustainable energy supply
Reducing cost of capital
Reforming domestic commerce
Promotion of Trade in Services
Consolidating gender sensitive trade policies
C lid i d ii d li i
Greening of Exports
Connecting Supply and demand better
28. Trade Policy Formulation Process
y
28
Invitation of Proposals from all Chambers & Association
registered under TO Ordinance, Ministries, Provincial
Governments, Departments, Academia
Meeting of the Advisory Council
g y
Short listing of Proposals received in response to invitation
or in the Council meeting
Firming up the proposals in consultations with major
Chambers/ Associations and relevant ministries
Drafting of the Policy
Presentation to the Prime Minister
P i h P i Mi i
Submission to the Cabinet
Issuance of SRO’s and notifications subject to approval
j pp
29. Breakup of Proposals Considered
p p
29
No. of
Organization
O i ti
Proposals
Federation of Pakistan Chambers of Commerce 57
&I d
Industry
Chambers of Commerce & Industries 219
Trade Associations 202
Pakistan’s Missions Abroad 147
Provincial Governments 140
Ministries/ Federal Government Departments 397
Miscellaneous (Industrial Units/ Individuals)
( / ) 80
TOTAL 1242
30. Targets
30 Indicator Target 2012
Merchandise Exports (US$ Billion) From 17.8 to 23 5
17 8 23.5
Competitiveness Ranking From 101 ≤ 75
Engineering Sector Export-Share From 1.5% ≥5%
From US$ 1000/bale
Value – addition of Cotton
to 1500/ bale
Expansion of Regional Trade From 17% ≥25%
FTAs EU, USA
Operational ROZs 7
31. 31
Strategic Trade Policy Framework
2009-12
Proposed Initiatives
P dI ii i
32. Proposed Trade Policy
oposed ade o cy
Initiatives
Required b F d d
R i d to be Funded
Estimated Cost: Rs. 35.22 Billion
Period : 2009-12
33. 33
Addressing Supply-Side
Supply Side
Constraints
New Initiatives
N I ii i
34. Financing at Reasonable Markup
g p
34
Businesses need short to medium term certainty in
the interest rate for investment. Currently, there is no
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policy instrument provided by the government or
p y g
private sector for providing finance at fixed interest
rates for a short to medium term
It is proposed that a fund may be created to hedge
markup rate hikes. The fund shall be managed by
an organization (TDAP/ NIC) of the Ministry of
Commerce and shall be financed from EISF.
35. Reliability of Electricity Supply
y y pp y
35
The electricity shortages is an irrefutable fact and is
adversely affecting industrial productivity. While little
can be done, in short term, to increase the quantum of
supply there is possibility for introducing an element of
pp y p y g
predictability of power supply.
It is therefore proposed that Electricity Distribution
Companies (DISCOs) being bodies corporate should
enter into agreements with clusters of industries
whereby electricity is supplied at mutually agreed
times.
times The agreements should have punitive and
compensation legally enforceable clauses; the
compensation could be in the form of electricity charges
credit etc
etc.
36. Insurance Cover for Visiting Buyers
g y
36
Purchasers, inspectors and sourcing agents of overseas
, p g g
buyers are reluctant to travel to Pakistan and the
exporters have to meet them in other countries. This
increases cost of doing business. It has been learnt that
business
apart from travel advisories that stop the
purchasers/importers from coming to Pakistan but also
the fact that the insurance companies refuse to cover
the period of stay in Pakistan on usual rate of premium.
A scheme may be launched for picking up the full cover
for stay in Pakistan for valid insurance policy of visiting
buyers/ buyers’ representatives.
37. Trade F ili i
T d Facilitation
Existing I i i i
E i i Initiatives to be C i d
b Continued
38. Facilitating Presence in International
38
Markets
M k t
To encourage local firms to have international
presence and thereby increase the profitability
following initiatives were taken in previous trade
g p
policies:
Support for Opening Exporters Offices Abroad
Support for Opening Retail Sales Outlets Abroad
It is proposed that the above initiatives may be
allowed to be continued throughout the period of
STPF 2009-12
39. Warehousing Facility
g y
39
To make inroads into non-traditional markets and /
or to introduce non-traditional products in
traditional markets a warehouse scheme was
launched and a warehouse was established in
l h d d h bli h d i
Kenya. The changing patterns of trade require
direct to store deliveries and thereby need of
warehouse even in traditional markets.
It is proposed that the warehousing scheme may be
continued and its scope expanded to include
traditional markets and traditional products.
40. Support for Compliance Certification
40
In the previous three years government announced
50% subsidy for various quality, environmental and
social certifications. To encourage f h the
l f further, h
subsidy was progressively increased to 100% of the
cost of certification when a manufacturing units gets
four of the specified certifications*.
It is proposed that the initiatives may be continued
in the Trade Policy 2009 and list of certifications
may be expanded by TDAP in consultation with the
Industry.
* (i) ISO 9000, (ii) ISO 140001, (iii) OHSAS 18001, (iv) SA 8000, (v) WRAP, (vi)
EKOTEX, (vii) BSCI, (viii) BRC
42. Compensating Inland Freight Charges
p g g g
42
Extra cost on inland transportation erodes export
p p
competitiveness of a range of developmental
products.
It is proposed that a scheme may be launched to
compensate inland freight cost to exporters of
cement,
cement light engineering leather garments,
engineering, garments
furniture, soda ash, hydrogen peroxide, sanitary
wares including tiles, finished marble/ granite/
/ /
onyx products. The scheme may be funded from
Export Investment Support Fund
43. Technology, Skill and Management Up-
gradation Fund for Value Added Products
43
All final use products do require continuous research
and development for enhancing competitiveness
either by technology up-gradation, skill
y gy p g ,
development or by improved management systems.
A fund dedicated to support these activities is
required.
It is proposed that a Technology, Skill and
Management Up-gradation fund of Rs. 3 billion
may be established.
44. Brand Promotion Support for Surgical
44
Instruments, Sports goods & Cutlery
I t t S t d C tl
The manufacturing in these sectors is largely done under
the brands of foreign companies, and that result in
lower prices for manufacturers in these sectors.
It is proposed that surgical instruments*, sports goods &
cutlery sector may be granted 25% subsidy on brand
promotional expenses lik advertisement in recognized
i l like d i i i d
trade journals, certification cost.
* Term Surgical includes surgical medical dental veterinary
surgical, medical, dental, veterinary,
beauty care (manicure/ pedicure etc.) and like instruments
45. Product Development and Marketing Fund
for Light Engineering
45
Engineering sector is dynamic and resilient but it is
fragmented. This sector has shown promising growth
during 2008-09 with an export growth of 32.1%.
In order to increase the sophistication level & realize
true potential of this sector, it is proposed that a special
fund of Rs 2.5 Billion may be created for product
development & marketing for light engineering sectorsector.
46. Enhancing Sophistication in Surgical
46
Instruments – C t of Excellence
I t t Center f E ll
Shortage of well-trained skilled manpower is
well trained
impeding growth of surgical instruments
manufacturing industry.
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It is proposed that Ministry of Industries and
Production may establish a center of excellence for
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catering to the training, designing, research &
development needs of surgical instrument*s sector
at Sialkot
* Term Surgical includes surgical, medical, dental, veterinary,
beauty
b t care ( (manicure/ pedicure etc.) and lik instruments
i / di t ) d like i t t
47. Enhancing Sophistication in Leather
47
Apparel
A l
Leather apparel industry needs to adapt to changing
pp y p g g
trends for which they need expert input for improving
quality and efficiency.
It i
I is proposed that use of EISF may b allowed for:-
d h f be ll df
Providing on the floor expert advisory / consultancy
services to leather apparel manufacturers cum exporters.
pp p
Matching grant to establish design studios or design centers
in their factories.
Establishing R&D Centers in Karachi and Sialkot by PLGMEA
for providing Research & Development support to Leather
Garments & Leather Goods Exporters.
48. Freight Subsidy on Export of Live Sea
48
Food
F d
Live sea food fetch very high prices in international
markets as compared to frozen products, minimum
p
price ratio is 1.10. In fact, maximum value addition
,
is through export of live sea food. This product
offers immense potential in export markets.
It is, therefore, proposed to grant 25% freight
subsidy if live seafood products are exported by
air. This will also compensate exporters to overcome
losses incurred due to mortality.
49. Support on Export of Processed Food
pp p
49
Raw and semi-processed agricultural produced being
semi processed
currently exported can get higher values if exported as
processed food. However, TBTs on processed food
require compliance to more sophisticated standards
and thereby higher cost of production
It i
I is proposed that processed food exports may be
d h df d b
supported initially by reimbursing R&D cost @ 6% of
the exports; the quantum & mode of support to be
adjusted after a detailed study but not later than May
2010.
50. Introduction of PAKGAP Standard
50
Good Agricultural practices are essential to ensure
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food safety both locally and in export markets and
thereby a better acceptability; our agricultural
sector i l ki recognized agricultural practices
is lacking i d i l l i
standards.
It is proposed that PAKGAP (Pakistan Good
Agricultural Practices) standards initially for five
major horticultural exports (citrus, mango, date,
potato and onion) may be worked out by MoST and
implemented by MINFA in collaboration with PHDEB.
51. Conversion of PHDEB into a company
p y
51
Pakistan Horticulture Development & Export Board
is a EDF funded project of the Ministry of
Commerce. Due to its undefined status it can neither
seek international assistance which is otherwise
available nor contribute fully to the development of
the sector. It has therefore being changed into a
corporate body.
It is proposed that, on incorporation, O&M expenses
of PHDEB may be funded for a period of three
years.
52. Improving Supply Chain of Leather
52
Sector E
S t Exports – Fl i M hi
t Flaying Machines
It is estimated that a minimum of 25% hides
and skins are rendered useless from butcher
cuts. There is an imminent need to introduce
flaying machines in abattoirs but local
governments have limited resources to install
and run f flaying machines.
It is therefore proposed that EISF may be used
for
f providing matching grants to district
d h d
governments for installing flaying machines.
53. Improving Supply Chain of Leather
53
Sector E
S t Exports – Fi i h d L th
t Finished Leather
Finished leather is one of the major export products &
an intermediate product in which substantial value
addition can be achieved by adopting modern
p
production processes and creating trendy finishes. There
p g y
is a need to encourage tanneries to upgrade production
and designing facilities and to facilitate them for
complying with international standards.
py g
It is therefore proposed that EISF may be allowed to be
used for:-
Sharing 25% financial cost of setting up of design centers
and labs in the individual tanneries.
To provide matching grant for setting up of effluent
treatment plants in individual tanneries
tanneries.
54. Services Export Development Fund
p p
54
Services sector has immense potential for earning foreign
exchange however high pre-project costs are a deterrent to
g g p p j
its expansion. Support to Services Sector in tendering
process and preparing prefeasibility / feasibility studies
shall be instrumental in helping the sector to achieve its
potential.
It is proposed that a Services Export Development Fund may
be
b established to provide assistance in the form of
bli h d id i i h f f
reimbursable grants, to Pakistan service exporters for
Tendering or negotiating for international projects and for
conducting pre-feasibility or feasibility studies for
international projects.
55. Halal Products - Cost sharing of
55
Certification
C tifi ti
Halal Products (Food & non-food) is an over trillion
non food)
dollar market. Pakistan despite being a Muslim
country is being left behind and one of the major
y g j
reason is lack of recognized halal standards. MoST
is charged with working out the standards and
setting up a Halal Certification Board.
It is proposed that till the time the Halal
Certification Board is setup, the government may
subsidize the cost of certification by internationally
recognized bodies by 50%.
i d b di b 50%
56. Compliance with Safety Standards
p y
56
Safety Standards Certification by Underwriters
Laboratories (UL) increases the level of
acceptability of manufactured products
particularly domestic electrical appliances in
international markets
markets.
It is proposed that 50% cost of UL certification
may be subsidized
subsidized.
57. 57
Sector S ifi
S Specific
Continuing Initiatives
C i i I ii i
58. Cluster Development
p
58
It was decided in last years Trade Policy that Trade
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Development Authority of Pakistan(TDAP) will
establish 11 new clusters such as surgical/sports
wear/gloves/leather etc to f ili
/ l /l h facilitate small units.
ll i
Since export clusters are essential f d l
Si l i l for development
promotion of non-traditional products, it is proposed
to continue with this initiative in current trade policy
to gain maximum benefit from the establishment of
these clusters.
59. Support on Export of Motorcycles
pp p y
59
Export of Motorcycles was facilitated through R&D
support of US$ 50 (Rupee Equivalent)/ Unit.
However the disbursement was started in end of FY
2008-09.
It is proposed that the support may be continued till
p p pp y
June 2010.
60. Pharmaceutical
60
Pharmaceutical sector was given following incentives
g g
in previous years:
Support for hiring medical representatives abroad
Support for registration of pharmaceutical products
abroad
Support for bioequivalence certification
The sector has responded well
It is proposed that the above initiatives may be
allowed to be continued throughout the period of
STPF 2009-12
61. Matching Grant for Paddy Harvesters
61
and P dd Dryers
d Paddy D
A large number of export consignments of rice are
being rejected due to aflatoxin infestation; a condition
attributed to high moisture contents of paddy.
The possibilities of aflatoxin infestation can be
minimized by introducing paddy harvesters and paddy
dryers which the farmers are reluctant to procure due
d hi h h f l d
to high cost.
It is proposed that matching grants may be given to
farmers / rice millers for purchase of paddy harvesters
and paddy dryers.
p y y
62. Zero Rating of Exports and Adhoc
62
Relief
R li f @1%
Exporters are forced to export indirect taxes, estimated to be around 9%
of the cost of production. Trade Policy 2008 proposed a study to calculate
the burden of these taxes and pending that to give interim relief to
fourteen sectors in shape of additional duty drawback @1% of export
value. Though the proposal was approved by the Cabinet, FBR did not
allow additional duty drawback.
It is proposed that the exports may be completely zero rated and till such
time the decision to give additional duty drawback to specified sectors may
be implemented as an interim relief measure in Trade Policy 2009; the
sectors are tents & canvas, electric machinery, carpets, rugs and mats, sports
goods, footwear, surgical/ medical/ veterinary/ beauty care instruments,
d f t i l/ di l/ t i /b t i t t
cutlery, onyx products, electric fans, furniture, autoparts, handicrafts, jewelry
and pharmaceuticals
63. Assistance to Horticulture Sector
63
It was decided in trade policy 2008-09 that a farm
2008 09
to port cool chain will be established, till completion
of cool chain, support for cool chain and cold
, pp
storages for horticulture will be given at 8% or
50% of the markup, which ever is lower.
It is proposed that this facility for horticulture may
be continued.
65. Greening of Industry
g y
65
Energy efficiency of the boilers being used by our
industries can be enhanced by 30% thereby reduce
the cost of production. Service providers for
p p
conversion of boilers are available but are reluctant
to come to Pakistan.
To encourage conversion of boilers for increasing
efficiency the government should underwrite the
agreement between service providers and the
industry.
66. 66
Trade Policy Initiatives
T d P li I i i i
Process R
P Re-engineering
i i
68. Import of Used Drilling Rigs
p g g
68
Oil and gas and petroleum sector companies are
allowed import of second hand plant and machinery
equipment required for their project in Pakistan subject
to pre-shipment certification to the effect that such
plant, machinery and equipment are in good working
condition and are not older than 10 years
years.
Since drilling rigs usually have a useful life of around
20 years it is proposed that the age limit for them may
be enhanced to 20 years subject to PSI certification.
69. Import of Specialized Machinery
p p y
69
There are various restrictions on import of specialized
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machinery and transport equipment e.g. Concrete
Transit Lorries, Concrete Pumps, Crain Lorries, Concrete
PlacingTrucks,
PlacingTrucks Dump Trucks, Waste Disposal Trucks,
Trucks Trucks
cement bulkers and Prime Movers. These conditions
include age restrictions, actual use etc.
It is therefore proposed that Import of specialized
machinery/ transport equipment by actual users
(construction companies etc ) in used condition provided
etc.)
they fulfill emission standards and have sufficient
productive life irrespective of the age.
70. Trade-in of Machinery
y
70
There is a possibility for Industrial Users to trade-in new,
refurbished or up-graded machinery with their obsolete
machinery. Current import and export regimes do not
p
provide for trade-ins whereas if allowed it could
reduce the expenditure on BMR.
It is therefore proposed that Industrial importers be
allowed to import new, refurbished and upgraded
machinery on the basis of trade-in with their old,
obsolete machinery. Likewise export of their
old/obsolete machinery for trade in with new new,
refurbished or upgraded machinery may also be
allowed.
71. Advance Remittance for Expeditious
71
Imports
I t
State Bank of Pakistan has discontinued the facilityy
to remit US$ 10,000 per invoice, as advance
payment, for import of spare parts, consumables/
raw materials etc. The di
i l Th discontinuation of the facility
i i f h f ili
has increased the cost and time to effect urgent
imports.
It is proposed that facility to remit US$ 10,000 per
invoice, as advance payment, for import of spare
parts, consumables/ raw materials etc may be
restored by State Bank of Pakistan.
72. Waiver of Size Restrictions on Import of Secondary
Quality Iron & Steel Plates/ Sheets/ Coils
72
Import of secondary quality iron and steel
p yq y
sheets/plates / coils is allowed provided the sizes
are over 48" (length) x 20“ (width). The size
restriction is irrational and diffi l to i l
i i i i i l d difficult implement.
The industrial users face difficulties in getting
clearance of unsorted scrap which adds to cost of
doing business.
It is proposed that minimum size restrictions on
import of secondary quality iron and steel
sheets/plates / coils may be waived off.
73. Reducing Cost of Doing Business
R d C fD B
Sector S ifi
S Specific
74. Reducing Cost of Doing Business –Gems
74
&JJewelry Sector
l S t
To promote Gems and Jewelry sector, the Cabinet in
Trade Policy 2008, approved waiver of customs duties
and sales tax on import of Gold, Diamonds, Silver,
Platinum ,Palladium and p
, precious stones. The waiver was
not extended to pearls and other synthetic or
reconstructed precious or semi precious stones though
these are increasingly being used in jewelry production.
gy g j yp
Further FBR didn’t comprehensively implement the
decision.
It is proposed to exempt natural pearls and other
synthetic or reconstructed precious or semi precious
stones from customs duty and sales tax. Implementation
of Cabinet decision may be expedited
expedited.
75. Pharmaceuticals Exports - Facilitation
p
75
Marketing of pharmaceutical products involve
number of complexities in the international
territory including need for extensive sampling
at product launching stage.
It is therefore proposed that limit for
physicians' samples may be enhanced to 20%
(current limit 10%) at the time of launch with
first shipment
76. Special EOU Status to Engineering
76
Units
U it
Currently, units that export 100% of their production
y, p p
enjoy the status of Export Oriented Units and the
benefits thereof. Since, engineering industry,
particularly auto motive parts manufacturing industry
has vast export potential but cannot export all of its
production in initial stages it needs special treatment.
It is proposed that engineering units may be allowed
EOU facility on export of 50% of their production for
the first three years After that engineering units should
years.
be allowed this facility on export of 80% of their
production.
78. Export of Edible Oil in Bulk
p
78
At present export of edible oil from Pakistan is
allowed in retail packs. The permission for export in
Bulk should be allowed. There have been exportp
demands for domestic edible oils like sun flower,
canola and cotton seed.
It is therefore proposed that export in bulk of these
oils (sun flower, canola and cotton seed) may be
allowed.
79. Export of Pulses
p
79
Currently exports of all types of pulses is banned
due to domestic supply reasons. There is a growing
international demand for this item. Opportunities
pp
exist for exporting pulses obtained on processing of
imported inputs.
It is proposed that exports of pulses obtained on
processing of imported inputs may be allowed
subject to necessary safeguards against export of
indigenous pulses. Regulatory duty on such exports
may b waived off.
be i d ff
80. Enactment of G.I Law
80
Absence of sui generis law on Geographical
Indication (G.I) has exposed Pakistani G.I products
p
particularly Basmati rice to infringements. The draft
y g
G.I law is under preparation.
It is proposed that G.I law may be enacted on fast
p p y
track basis and Trade Development Authority of
Pakistan (TDAP) may be given the mandate to
apply for and to hold G.I registration of Pakistani
products.
82. Controlling Import of Poppy Seeds
g p ppy
82
Presently there is no restriction on import of Poppy
seeds as far as the origin is concerned. Single
convention binds the signatories to import poppy
g p p ppy
seeds only from the countries where it is legally
produced.
In view of the international commitments it is
proposed that source of import of opium poppy
seeds may be restricted to the countries where it is
legally produced.
83. Controlling Import of Scrap/Waste
83
Plastics
Pl ti
Presently import of waste, parings and scrap of
polyethylene and polypropylene is restricted to
industrial consumers while import of other plastics is
p p
allowed on commercial basis.
To regulate import of such scrap, it is proposed to
g p p p p
restrict import of all types of plastic scrap to
industrial consumers only and strictly in accordance
with the Provisions of the Basel Convention.
84. Import of Used Computer Components
p p p
84
At present old and used computers and peripherals
thereof are freely importable but the import of
used components (RAM, Casing, Motherboard,
p ( , g, ,
Processors etc) is banned. Thereby depriving the low
income strata of computer use.
In order to encourage use of computers by low
income segment of population, it is proposed that
import of old & used computer components may be
allowed.
85. Restricting Import of Used CRT
85
Monitors
M it
Second hand Cathode Ray Tubes (CRT) monitors are
being imported and used as televisions thereby
p g
posing a threat to local television industry; excessive
y;
import of first world’s e-waste is also a threat to the
environment.
It is therefore proposed that import of CRT monitors
may be disallowed unless imported alongwith used
computers.
86. Protecting Local Vaccine Producers
g
86
Local manufacturing of vaccines is of strategic
importance and now local companies have
started venturing into this high tech segment
segment.
Unhindered import of vaccines is a
discouraging factor
factor.
It is proposed that to encourage local
manufacturing,
manufacturing import of vaccines may be
allowed only from World Health Organization
(WHO) approved plants
plants.
87. 87
Trade Policy Initiatives
T d P li I i i i
Import F ili i
I Facilitation
88. Import of Donated Ambulances
p
88
Only such used ambulances (not more than 15 years
old) that are donated by "reputable organizations"
are allowed for imports by charitable
p y
organizations/ trusts/ hospitals.
It is proposed that import of used ambulances that
p p p
fulfill certifiable standards and have minimum 10
years of useful life may be allowed when donated
by any organization / individual to charitable or
non-profit organizations, trusts or hospitals.
89. Disabled Persons – Import of
89
Motorized Wheel Chairs
M t i d Wh l Ch i
Secondhand / used motorized wheel chairs are
presently importable only by charitable
institutions and hospitals whereas actual users
cannot do so.
To facilitate disabled persons it is proposed
that import of one Secondhand / used duty
free motorized wheel chair may be allowed to
actual user.
90. Disabled Persons - Import of Duty Free
90
Cars
Disabled persons are allowed waiver of import duty
which is in excess of 10% on CKD kits that are imported
for assembling of car for them. Restricting disabled
p
persons to use locally assembled cars limits the choice to
y
few makes; there have been persistent complaints of
non-availability of customized vehicles among the local
makes. Previously duty free import of customized cars
y y p
by disabled persons was allowed.
To facilitate disabled persons to actively participate in
economic activity, the facility to import duty free
activity
customized cars, not above 1350cc of engine capacity,
may be allowed.
91. 91
Import R l d
I Related
Liberalization
Lib li i
92. Transfer of Residence (TR) Rules -
92
Amendment
A d t
In case a passenger who brings/imports vehicle
under TR scheme dies before the issuance of TR,
there is no provision in Import Policy Order for
p p y
release of such vehicle.
It is proposed that vehicle imported by a overseas
p p p y
Pakistani, under TR rules, may be released to legal
heir(s) in case of his / her death.
93.
94. Pakistan's low degree of Structural
94
Transformation and Di
T f ti d Diversification
ifi ti
95. Pakistan's exports ranked by sophistication
95
and share in total exports. All of them RCA>1
Commdity Sophistication 1985 1990 1995 2000 2005 2006
Medical Instruments and appliances, nes
pp , 20814.00 1.23 0.95 0.89 0.88 0.97 1.00
other sporting goods and fairground amusements, etc 15712.00 1.22 1.87 2.00 1.85 1.76 1.94
Cotton fabrics, woven, bleached, dyed, etc, or otherwise finished 11214.00 3.46 4.11 6.02 3.61 4.78 4.48
Leather of other bovine cattle and equine leather 10168.00 2.21 2.04 1.31 0.92 1.17 1.14
Clothing accessories, knitted or crocheted, nes 9429.00 0.23 0.36 0.73 0.90 1.65 1.95
Fabrics, woven, less 85% of discontinuous synthetic fibres 8683.00 0.10 2.49 3.09 4.00 3.48 3.17
Womens, girls, infants outerwear, textile, not knitted or crocheted; 8585.00 1.24 2.59 1.90 2.44 2.59 2.77
other outer garments of textile fabrics, not knitted, crocheted
Other made-up articles of textile materials, nes 8359.00 0.89 0.93 1.60 2.86 2.79 2.72
Outerwear knitted or crocheted, not elastic nor rubberized; jerseys, 8199.00 0.16 1.16 1.65 3.79 3.23 3.05
pullovers, slip-overs, cardigans, etc
Articles of apparel, clothing accessories of leather 8176.00 2.11 4.49 4.80 4.61 2.96 2.73
Outerwear knitted or crocheted, not elastic nor rubberized; other, 8119.00 0.28 0.96 1.63 1.70 2.18 2.17
clothin• accessories non-elastic knitted or crocheted
Linens and furnishing articles of textile, not knitted or crocheted 7,345 3.66 5.45 5.94 9.30 12.63 13.38
Under-garments,
Under-garments knitted or crocheted; of cotton, not elastic nor
cotton 7,122
7 122 1.00
1 00 2.27
2 27 4.27
4 27 3.62
3 62 3.55
3 55 3.87
3 87
rubberized
Men's and boys' outerwear, textile fabrics not knitted or crocheted; 6,798 0.28 0.64 1.25 2.75 2.96 3.15
trousers, breeches and the like
Cotton yarn 5,728 10.32 16.91 18.91 13.21 10.14 10.53
Carpets, carpeting and rugs, knotted 5,309 4.57 3.86 1.82 2.33 1.93 1.74
Rice, semi-milled or wholly milled 5,060 8.63 4.64 5.55 5.71 5.82 6.46
Cotton fabrics, woven, unbleached, not mercerized 4,578 5.07 5.15 6.88 6.16 5.15 5.20
Sub-total (%) 46.70 60.90 70.20 70.60 69.70 71.50
Sophistication at the country level 7231.00 7693.00 8268.00 8362.00 8833.00 8,72a
SITC R2, Aggregate 4 Slide 24
