Trade Policy Presentation

STRATEGIC TRADE POLICY FRAMEWORK 2009 - 12 TRADE POLICY 2009

Ministry of Commerce – July 27, 2009

Scheme of Presentation 2

    

Policy Statement Trade Review Challenges & Opportunities Synopsis of Strategic Trade Policy Framework Proposed Trade Policy Initiatives Over arching  Sector Specific  Trade Diplomacy 

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 

Policy Statement 4

The Ministry of Commerce’s endeavor is to provide 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

Trade Review Imports and Exports 2008-09

Exports 6



Exports 07-08 US$ 19.1 Billion



Export Target 08-09



Actual Exports 08-09 US$ 17.8 Billion*



Export Growth - 6.7% • WTO estimated a 9% shrinkage in •

US$ 22.1 Billion

global trade Pakistan is less hurt than competitorsExport growth in China declined by 24%, India by 31% and Bangladesh by 14%

* Provisional

Exports Review 7



Exports were 6.7% less than 2007-08 due to Exogenous factors - demand shrinkage, financial crisis and ensuing protectionist policies.  Domestic Factors - Power shortages/outages, high financial cost, bad law & order situation and competitiveness erosion 



Traditional sectors like textile (- 9.5%), Leather (- 29%) declined, whereas Rice (8%), Engineering goods (26%), Jewelry (35%) recorded growth in exports

Exports – Historical 8

Year

Value (FOB $ Billion)

Change (%age)

2000-01

9.2

-

2001-02

9.1

-0.7

2002-03

11.2

22.2

2003-04

12.3

10.3

2004-05

14.4

16.9

2005-06

16.5

14.3

2006-07

17.0

3.2

2007-08

19.2

13.2

2008-09 (P)

17.8

- 6.7

9

Export of Major Commodity Groups (US$Billion)

Export Profile 2008-09 10

Export Destinations 11

Import Review 12





Imports were US$ 34.8 billion in 2008-09 as 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 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%)

Imports – Historical 13

Year

Value (C&F US$ Billion)

Change (%age)

2000-01

10.7

2001-02

10.3

- 3.6

2002-03

12.2

18.2

2003-04

15.6

27.6

2004-05

20.6

32.1

2005-06

28.6

38.8

2006-07

30.5

6.9

2007-08

40.0

30.9

2008-09(P)

34.8

- 13.0

Import of Major Commodity Groups 14

(US$Billion)

Balance of Trade 15

(US$ Billion)

Challenges 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.

Challenges 17

2/3 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  Large Scale Manufacturing growth declined by 7.7% (Jul-Mar) as against increase of 4.8% in 2007-08

Challenges 18

3/3 Sliding Down the Competitiveness Index (Ranking among 131 countries)

Indicator

Ranking 2007- Ranking 200808 09

Overall Competitiveness

92

101

Infrastructure

72

85

113

121

Financial Market Sophistication

65

71

Technological Readiness

89

100

Innovation & Sophistication Factors

78

85

Labour Market Efficiency

Source: Global Competitiveness Report 2008-09, World Economic 18 Forum

Opportunities 19

Favourable market access owing to bilateral trade agreements  Potential of doubling the value- addition of cotton of which Pakistan is the 4th largest producer  Strong resource base in many sectors (food, building stones, gems & jewelry, leather, rice, cement, light engineering)  Growing Services Sectors 

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 :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 

21

Strategic Trade Policy Framework 2009- 12

Main Features 22

   

Three years strategic framework Review mechanism Well-defined business processes Shift from Comparative Advantage to Competitive Advantage

Trade Policy Objectives 1/2

23

People centric : Poverty alleviation and employment generation through export led growth

Enhance the competitiveness of Pakistan’s exports

1.

Increase the sophistication level of Pakistan’s exports by increasing the technology component and value addition. Trade Facilitation

a) b) i. ii.

c) d)

Process Improvement Aligning Tax Reform with Trade Facilitation with the aim to reduce the cost of doing business

Address supply side constraints – power shortage & high financial cost Reduce anti-export bias

Trade Policy Objectives 2/2

24

2. 3. 4.

5.

6.

Reducing Cost of Doing Business Protection and promotion of SMEs Slide 94 Focus on products with higher sophistication potential Promote agricultural development through exports Enable Pakistani exporting companies overcome the negative effects of global demand contraction

25

Services Develop and implement a comprehensive export plan

Textiles Focus Sectors of STPF 2009 Support to initiatives in - 12Textile Policy Focus Sectors     

 

Pharmaceuticals Leather Gems & Jewelry Engineering Goods Surgical. Medical, Dental, Beauty care instruments Agriculture & food Halal Products

Policy Thrusts 



 



Increasing overall competitiveness Moving up the sophistication ladder SMEs Cluster development Creating supply and demand side linkages Improving Domestic Commerce in these sectors

Strategic Trade Policy Framework 2009-12 26

Linking Trade Policy 2009-12 with other development strategies by synergising the ‘’Functional Linkages’’ between trade  trade  trade  trade  trade 

and and and and and

industry; investment; education; science & technology; social protection policy

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 Greening of Exports Connecting Supply and demand better

28

Trade Policy Formulation Process 

 



   

Invitation of Proposals from all Chambers & Association registered under TO Ordinance, Ministries, Provincial Governments, Departments, Academia Meeting of the Advisory Council 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 Submission to the Cabinet Issuance of SRO’s and notifications subject to approval

29

Breakup of Proposals Considered Organization Federation of Pakistan Chambers of Commerce & Industry

No. of Proposals 57

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

Targets Indicator

Target 2012

30

Merchandise Exports (US$

From 17.8 to 23.5

Billion) Competitiveness Ranking Engineering Sector Export-Share

Value – addition of Cotton

From 101 ≤ 75 From 1.5% ≥5%

From US$ 1000/bale to 1500/ bale

Expansion of Regional Trade

From 17% ≥25%

31

Strategic Trade Policy Framework 2009-12 Proposed Initiatives

Proposed Trade Policy Initiatives Required to be Funded Estimated Cost: Rs. 35.22 Billion Period : 2009-12

33

Addressing Supply-Side Constraints New Initiatives

34

Financing at Reasonable Markup 



Businesses need short to medium term certainty in the interest rate for investment. Currently, there is no policy instrument provided by the government or 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 



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 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. The agreements should have punitive and compensation legally enforceable clauses; the compensation could be in the form of electricity charges credit etc.

36

Insurance Cover for Visiting Buyers 



Purchasers, inspectors and sourcing agents of overseas 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 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.

Trade Facilitation Existing Initiatives to be Continued

38

Facilitating Presence in International Markets 

To encourage local firms to have international presence and thereby increase the profitability following initiatives were taken in previous trade 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

Warehousing Facility 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 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.

Support for Compliance Certification In the previous three years government announced 

40



50% subsidy for various quality, environmental and social certifications. To encourage further, the 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

Sector Specific New Initiatives

42

Compensating Inland Freight Charges 



Extra cost on inland transportation erodes export 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, light engineering, leather 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 



All final use products do require continuous research and development for enhancing competitiveness either by technology upgradation, skill 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 Instruments, Sports goods & Cutlery 



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 like advertisement in recognized trade journals, certification cost.

* Term Surgical includes surgical, medical, dental, veterinary, beauty care (manicure/ pedicure etc.) and like instruments

45

Product Development and Marketing Fund for Light Engineering 

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 sector.

46

Enhancing Sophistication in Surgical Instruments – Center of Excellence 





Shortage of well-trained skilled manpower is impeding growth of surgical instruments manufacturing industry. It is proposed that Ministry of Industries and Production may establish a center of excellence for catering to the training, designing, research & development needs of surgical instrument*s sector at Sialkot * Term Surgical includes surgical, medical, dental, veterinary, beauty care (manicure/ pedicure etc.) and like instruments

47

Enhancing Sophistication in Leather Apparel 



Leather apparel industry needs to adapt to changing trends for which they need expert input for improving quality and efficiency. It is proposed that use of EISF may be allowed for: Providing

on the floor expert advisory / consultancy services to leather apparel manufacturers cum exporters.  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 Food 



Live sea food fetch very high prices in international markets as compared to frozen products, minimum 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 



Raw and semi-processed agricultural produced being 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 is proposed that processed food exports may be 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 



Good Agricultural practices are essential to ensure food safety both locally and in export markets and thereby a better acceptability; our agricultural sector is lacking recognized agricultural practices 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 



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 Sector Exports – 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 flaying machines.  It is therefore proposed that EISF may be used for providing matching grants to district governments for installing flaying machines. 

53

Improving Supply Chain of Leather Sector Exports – 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 production processes and creating trendy finishes. There is a need to encourage tanneries to upgrade production and designing facilities and to facilitate them for complying with international standards. 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. 

54

Services Export Development Fund 



Services sector has immense potential for earning foreign exchange however high pre-project costs are a deterrent to 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 established to provide assistance in the form of reimbursable grants, to Pakistan service exporters for Tendering or negotiating for international projects and for conducting prefeasibility or feasibility studies for international projects.

55

Halal Products - Cost sharing of Certification 



Halal Products (Food & non-food) is an over trillion dollar market. Pakistan despite being a Muslim country is being left behind and one of the major 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%.

56

Compliance with Safety Standards Safety Standards Certification by Underwriters Laboratories (UL) increases the level of acceptability of manufactured products particularly domestic electrical appliances in international markets.  It is proposed that 50% cost of UL certification may be subsidized. 

57

Sector Specific Continuing Initiatives

Cluster Development 58





It was decided in last years Trade Policy that Trade Development Authority of Pakistan(TDAP) will establish 11 new clusters such as surgical/sports wear/gloves/leather etc to facilitate small units.  Since export clusters are essential 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 



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 June 2010.

Pharmaceutical 60

Pharmaceutical sector was given following incentives 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 and Paddy Dryers 





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 to high cost. It is proposed that matching grants may be given to farmers / rice millers for purchase of paddy harvesters and paddy dryers.

62

Zero Rating of Exports and Adhoc Relief @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, cutlery, onyx products, electric fans, furniture, autoparts, handicrafts, jewelry and pharmaceuticals

63

Assistance to Horticulture Sector 



It was decided in trade policy 2008-09 that a farm to port cool chain will be established, till completion of cool chain, support for cool chain and cold 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.

64

Miscellaneous New Initiatives

Greening of Industry 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 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

Trade Policy Initiatives Process Re-engineering

Reducing Cost of Doing Business

Import of Used Drilling Rigs 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. 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 



There are various restrictions on import of specialized machinery and transport equipment e.g. Concrete Transit Lorries, Concrete Pumps, Crain Lorries, Concrete PlacingTrucks, Dump Trucks, Waste Disposal 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 they fulfill emission standards and have sufficient productive life irrespective of the age.

Trade-in of Machinery 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 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, refurbished or upgraded machinery may also be allowed.

71

Advance Remittance for Expeditious Imports 



State Bank of Pakistan has discontinued the facility to remit US$ 10,000 per invoice, as advance payment, for import of spare parts, consumables/ raw materials etc. The discontinuation of the facility 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 



Import of secondary quality iron and steel sheets/plates / coils is allowed provided the sizes are over 48" (length) x 20“ (width). The size restriction is irrational and difficult to 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.

Reducing Cost of Doing Business Sector Specific

74

Reducing Cost of Doing Business –Gems & Jewelry Sector 



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 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. 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.

75

Pharmaceuticals Exports Facilitation 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 Units 



Currently, units that export 100% of their production 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 be allowed this facility on export of 80% of their production.

Export Related

Export of Edible Oil in Bulk 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 export 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.

Export of Pulses 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 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 be waived off.

Enactment of G.I Law 80





Absence of sui generis law on Geographical Indication (G.I) has exposed Pakistani G.I products particularly Basmati rice to infringements. The draft G.I law is under preparation. It is proposed that G.I law may be enacted on fast 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.

Import Related Regulatory

82

Controlling Import of Poppy Seeds 



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 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 Plastics 



Presently import of waste, parings and scrap of polyethylene and polypropylene is restricted to industrial consumers while import of other plastics is allowed on commercial basis. To regulate import of such scrap, it is proposed to 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 



At present old and used computers and peripherals thereof are freely importable but the import of used components (RAM, Casing, Motherboard, 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 Monitors 



Second hand Cathode Ray Tubes (CRT) monitors are being imported and used as televisions thereby posing a threat to local television industry; excessive 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 Local manufacturing of vaccines is of strategic importance and now local companies have started venturing into this high tech segment. Unhindered import of vaccines is a discouraging factor.  It is proposed that to encourage local manufacturing, import of vaccines may be allowed only from World Health Organization (WHO) approved plants. 

87

Trade Policy Initiatives Import Facilitation

88

Import of Donated Ambulances 



Only such used ambulances (not more than 15 years old) that are donated by "reputable organizations" are allowed for imports by charitable organizations/ trusts/ hospitals. It is proposed that import of used ambulances that 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 Motorized Wheel Chairs 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 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 persons to use locally assembled cars limits the choice to few makes; there have been persistent complaints of non-availability of customized vehicles among the local makes. Previously duty free import of customized cars by disabled persons was allowed. To facilitate disabled persons to actively participate in economic activity, the facility to import duty free customized cars, not above 1350cc of engine capacity, may be allowed.

91

Import Related Liberalization

92

Transfer of Residence (TR) Rules - Amendment 



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 release of such vehicle. It is proposed that vehicle imported by a overseas Pakistani, under TR rules, may be released to legal heir(s) in case of his / her death.

94

Pakistan's low degree of Structural Transformation and Diversification

95

Pakistan's exports ranked by sophistication and share in total exports. All of them RCA>1 Commdity

Sophistication

1985

1990

1995

2000

2005

2006

Medical Instruments and appliances, nes other sporting goods and fairground amusements, etc Cotton fabrics, woven, bleached, dyed, etc, or otherwise finished

20814.00 15712.00 11214.00

1.23 1.22 3.46

0.95 1.87 4.11

0.89 2.00 6.02

0.88 1.85 3.61

0.97 1.76 4.78

1.00 1.94 4.48

Leather of other bovine cattle and equine leather Clothing accessories, knitted or crocheted, nes Fabrics, woven, less 85% of discontinuous synthetic fibres Womens, girls, infants outerwear, textile, not knitted or crocheted;

10168.00 9429.00 8683.00 8585.00

2.21 0.23 0.10 1.24

2.04 0.36 2.49 2.59

1.31 0.73 3.09 1.90

0.92 0.90 4.00 2.44

1.17 1.65 3.48 2.59

1.14 1.95 3.17 2.77

other outer garments of textile fabrics, not knitted, crocheted Other made-up articles of textile materials, nes Outerwear knitted or crocheted, not elastic nor rubberized; jerseys,

8359.00 8199.00

0.89 0.16

0.93 1.16

1.60 1.65

2.86 3.79

2.79 3.23

2.72 3.05

pullovers, slip-overs, cardigans, etc Articles of apparel, clothing accessories of leather Outerwear knitted or crocheted, not elastic nor rubberized; other,

8176.00 8119.00

2.11 0.28

4.49 0.96

4.80 1.63

4.61 1.70

2.96 2.18

2.73 2.17

7,345

3.66

5.45

5.94

9.30

12.63

13.38

7,122

1.00

2.27

4.27

3.62

3.55

3.87

6,798

0.28

0.64

1.25

2.75

2.96

3.15

5,728 5,309 5,060 4,578

10.32 4.57 8.63 5.07 46.70 7231.00

16.91 3.86 4.64 5.15 60.90 7693.00

18.91 1.82 5.55 6.88 70.20 8268.00

13.21 2.33 5.71 6.16 70.60 8362.00

10.14 1.93 5.82 5.15 69.70 8833.00

10.53 1.74 6.46 5.20 71.50 8,72a

clothin• accessories non-elastic knitted or crocheted Linens and furnishing articles of textile, not knitted or crocheted Under-garments, knitted or crocheted; of cotton, not elastic nor rubberized Men's and boys' outerwear, textile fabrics not knitted or crocheted; trousers, breeches and the like Cotton yarn Carpets, carpeting and rugs, knotted Rice, semi-milled or wholly milled Cotton fabrics, woven, unbleached, not mercerized Sub-total (%) Sophistication at the country level

SITC R2, Aggregate 4

Slide 24

* Other Manufactures

US$

Million 96

Slide 09