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Commerce ministry yet to notify Strategic Trade Policy Framework

Commerce ministry yet to notify Strategic Trade Policy Framework

ISLAMABAD: The Ministry of Commerce has yet to notify the Strategic Trade Policy Framework 2020-25 despite a lapse of more than a month.

The framework — approved by the federal cabinet on Nov 9 after a delay of more than two years — envisages measures to enhance Pakistani enterprises’ capacity to produce, distribute and sell products more efficiently than their competitors.

The file of the policy was pending in Prime Minister Secretariat for the last one month, a well-placed source told Dawn, adding: “The file was sent the very next day after the cabinet’s meeting.”

This is the fourth strategic framework announced by the government since 2009. It allocates Rs45 billion to be spent in the next five years on giving subsidies and taking other support measures for non-textile sectors.

Unlike the past frameworks, the government this time has not announced an export target linked with the support being given to the sectors.

According to another source, the textile division had sent the textile and clothing policy to the Economic Coordination Committee of the federal cabinet for approval. This policy has also been submitted several times but is yet to be approved.

Earlier, the commerce division notified three policy frameworks — for 2009-12, 2012-15 and 2015-18 — but none of them could achieve its objectives, especially the export targets, due to various reasons. The previous frameworks also failed to alter the export paradigm.

The draft Textile and Apparel Policy 2020-25 is laden with cash subsidies and lower rates on utilities to boost the production and export of value-added textile products. The support for the textile sector runs in billions of rupees, especially under the head of subsiding utility costs.

Another scheme —regarding the payment of drawback of local taxes and levy — is also awaiting the federal cabinet’s approval. The scheme is simply a cash subsidy on export proceeds from the country.

The State Bank of Pakistan will also offer hefty incentives to entrepreneurs and the scheme will be made part of the textile policy. It has been proposed to allocate a hefty amount for the Export Finance Scheme and Long-Term Financing Facility.

The focus of the policy framework 2020-25 will be on geographical and product diversification, the reduction of manufacturing costs through tariff rationalisation, the pursuit of regional connectivity, the ‘Look Africa’ policy, and enhancement of market access through free trade and preferential trade agreements.

The framework will also focus on facilitating logistics and tracking under the International Road Transports (TIR) Convention and enhancing regional connectivity for access to Central Asian countries, Turkey and Iran, and through them to Europe and Russia.

Published in Dawn, December 15th, 2021

Source: Dawn News

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