Pakistan trade policy despite tumbling exports delayed

Pakistan’s exports are continuously tumbling from last some months due to the lower global commodity prices, weakening external demand, ongoing power shortages, and security and business climate related challenges. Despite all this, the government is yet to announce the strategic trade policy framework to boost the country’s exports.

Pakistan’s exports had come down by 13.42 percent to $6.9 billion during first four months (July-October) of the ongoing financial year 2015-2016 from $8 billion of the corresponding month of the previous year, Pakistan Bureau of Statistics data showed.

The Ministry of Commerce has failed to announce the much delayed Strategic Trade Policy Framework 2015-2018 claimed that STPF is ready and would be presented to the Prime Minister for approval soon.

The government should have announced the trade policy in July or August, as this provides guidelines to the exporters.

Prime Minister Nawaz Sharif in September held a meeting with the heads of chambers of commerce and industries and exporters to take their recommendations for unveiling exports promotion package. However, the government had not announced any package for the exports sector apart from giving some incentives for the textile sector.

The government had announced relief package for textile sector after they observed countrywide strike by imposing a 10 percent regulatory duty on imports of cotton yarn, grey and processed fabric, particularly from India. The government has also decided that the interest rate on the Export Refinancing Facility (ERFF) will be reduced by 1pc to 3.5pc and interest rate of the Long Term Finance Facility (LTFF) has also been reduced from 6pc to 5pc to reduce cost of doing business. However, no incentive package for the other export sectors had announced yet.

According to latest data of Pakistan Bureau of Statistics released on Wednesday, the country’s imports had reduced to $14.6 billion during July-October of 2015-2015 from $16.7 billion of the same period last year, showing decline of 12.76 percent.

Pakistan’s trade deficit, gap between exports and imports, had narrowed to $7.7 billion during four month of the current financial year from $8.8 billion of the corresponding period of previous year with reduction of 12.15 percent.

According to the PBS data, Pakistan’s exports had decreased by 0.17 percent in the month of October 2015, as country exported goods worth of $1.72 billion as against $1.73 billion of September 2015. However, the imports had gone up by 12.65 percent to $3.9 billion in October 2015 from $3.5 billion of September 2015. Therefore, Pakistan’s trade imbalance had registered at $2.2 billion in October 2015 as against $1.8 billion of the September showing an increase of 25.33 percent.

Chief Executive Officer of Trade Development Authority of Pakistan (TDAP) SM Muneer said that a plan has been finalised to boost national exports which will be presented soon to Prime Minister for approval. The plan will help improve GDP, forex reserves and employment rate while reducing current account deficit which dropped from 3.1 billion dollars to $2.6 billion and continue to improve balance of payments.