Expanding trade with India
Pakistan has expanded trade with India by allowing import of seven more items, taking the total tally to over 1,945 goods. The decision was taken at a meeting of the Economic Coordination Committee (ECC) of the cabinet that met under the chairmanship of Finance Minister Dr Abdul Hafeez Shaikh. ECC had amended the Trade Policy Order 2009 to make room for the changes.
The items added to the list were raw material and machinery not manufactured in India, including tools for tapping threads, plant and machinery for extraction and refining of rice, barn oil, laboratory testing equipment, methylisoxazole-sulthamoyl-acetamide for pharmaceutical products, air-brake equipment and spare parts for locomotives, laboratory glassware of all kinds and cotton waste.
Import of such items would also help reduce the cost of imports as the newly added items imported from India would cost less to Pakistani importers — compared with imports from other countries.
It was revealed that after the trade policy consultation with the private sector, approval for import of 40 items of raw materials, semi-finished products, machinery, plants, chemicals and dyes for the textile and leather processing industries, was sought but later it was changed to 7 which was granted by the Prime Minister.
It is worth mentioning here that Pakistan has linked the free trade or Most Favored Nation (MFN) status to India with resolution of Kashmir issue and imports from India are being governed under a positive list that has now expanded to 1945 items. Although Pakistan has signed the South Asia Free Trade Area (SAFTA) agreement, it has limited its tariff reduction benefits for India on items included in the importable items list contained in Appendix-G of the Import Policy Order 2009 and items notified after the issuance of the Import Policy Order 2009.
ECC has also approved 15 other amendments to the trade policy which include measures to enhance the competitiveness of exports, increase trade access to key foreign markets and restrict imports of several items.
The main objective of the amendments is said to be achieving an increase in exports of agricultural products such as grains, fruits, vegetables and meat as well as value-added textile products. The government also banned commercial import of used edible oil under the garb of soap stock. It also banned the import of used lubricants, hydraulic and transformer oils. To curb cigarette manufacturing by unregistered manufacturers, the import of cigarette-making paper will only be allowed to the registered manufacturers. Through another amendment, the government banned the export of poplar wood to Afghanistan.
The amendments are important as the government is eyeing exports worth $22 billion due to rising prices of commodities in the international market this year. In 2010, exports from Pakistan suffered due to the massive floods that had hit the plains of Punjab and Sindh. This year could bring home the estimated revenue if policies remain supportive for the exporters