Pakistan negotiating FTAs with Turkey, Korea and Thailand to boost exporting sectors

Federal Commerce Minister Khurram Dastgir Khan said on Monday after holding a meeting with Pakistan Carpet Manufactures and Exporters Association (PCMEA) and All Pakistaan Textile Mills Association that Pakistan is negotiating free trade agreements (FTAs) with Thailand, Turkey, and Korea to boost exporting sectors including textile.

The commerce minister said that Pakistan is negotiating with governments of these three countries regarding signing of free trade agreements in search of new markets to boost exports.

The export-oriented sector is the bread winner for the country and the government is trying its best to facilitate it. He said that export diversification was widely recognised as a positive trade policy objective in sustaining the economic growth.

The minister said that the government wants to make Pakistan major exporting country and to double the textile export from $13 billion to $26 billion. There should be zero rated tax on textile and other exporting sectors while there should not be any sort of provincial taxes on these sectors.

He said that the Ministry realizes the need to expand export markets and enhance its share in regional trade. Pakistan has signed free trade agreements with China, Sri-Lanka and Malaysia. There are also ongoing Free Trade Agreement discussions with Thailand, Turkey and Korea.

The minister further said that in order to improve transparency, enhance competitiveness and remove anti export bias, the Ministry of Commerce and Federal Board of Revenue (FBR) have undertaken a tariff rationalisation exercise. This is for a coherent and clean tariff structure that would ease doing of business in Pakistan.

Pakistan is also cognizant of the immense potential of the export from the services sector. In this context, Ministry of Commerce has established Trade in Services Council with representatives from public and private sector.

APTMA chairman SM Tanveer said that billions of rupees of textile exporters were blocked in sales tax and customs rebate and other schemes introduced in the textile policy for 2009-14. He added the zero-rating sales tax facility was intended to save them from the hassle of claiming refunds. Pakistan’s textile exports could soar to $25 billion if the government took the stakeholders on board and framed policies in consultation.

Key issues discussed during the meeting were the 50 per cent import duty imposed by Turkey on Pak carpets. PCME SVC Qamar Zia said that the Pakistani carpet manufacturers should have access to new markets like Russia, South Korea and countries of South America other than the existing markets.

He appreciated the efforts of Punjab CM Shehbaz Sharif and PBIT for supporting the industry.

The minister fully supported the issues raised by the PCMEA delegation and said that he would take the matter forward. He also informed the participants of the meeting that first draft of the Free Trade Agreement has already been sent to Turkish side.

The delegation emphasised the need to improve the investment climate and access to finance, with support for creating small and medium enterprises (SMEs), bringing innovation in the production methods, and training the workforce for a forward-looking industry.

The meeting was also attended by its chairman SM Tanveer and Gohar Ejaz while PCMEA meeting was attended by central chairman Usman Ghani, SVC Qamar Zia, Latif Malik and Shahid Hassan Sheikh.