US duty abolition won't benefit Pakistani rug inventories

The planned abolition of import duty on Pakistani hand-made carpets by the United States will not benefit the rug inventories in Pakistan as the existing import duty is only 2 percent.
Sources told Business Recorder here on Friday that Pakistani rugs might get Generalised System Preferences (GSP) concessions in the US.
The US administration is planning to abolish the import duty, which is currently 2 percent only, the sources said.
The proposed zero percent import duty under the GSP will also be available for Afghani hand-made carpets. This step by the US administration is seen as a compensation for Pakistan and Afghanistan, being Washington's frontline allies in war against terrorism.
"This seems to be a cosmetic step," a dealer said. "Most of the firms which are involved in this business are exporting carpets. There must be concessions for industrial carpets too," he urged.
The US Senate, according to sources, has passed the bill after its initial clearance from the House of Representatives. The bill was passed after the US government made certain amendments to the laws governing the import tariff regime.
However, the bill will be voted again by both the houses of the US legislature for final approval, the sources said. The bill's approval is expected in a few months that further undermines the significance of the concession as the WTO's regime, effective from next year, will abolish all restrictions on international trade.
Currently, export of Pakistani carpets to the US is around $ 100 million annually.
Besides Pakistan and Afghanistan, India, Turkey, Azerbaijan, Georgia, Armenia, Turkmenistan, Kazakhstan, Uzbekistan and a few other countries also export hand-woven carpets.
According to figures of the Federal Bureau of Statistics (FBS), Pakistan's carpet exports have registered a fall of 19 percent in value and 25.50 percent in quantity in the aftermath of September 11 attacks.
The carpet exports in 2001-02 stood at $ 233 million (4.75 million square metres) as compared to $ 289 million (6.4 million square metres) in 2000-01, sources said.
Pakistan is one of the main hand-made carpets exporting countries. Pakistan exported carpets worth over $ 200.704 million during 2002-03.
However, carpet export is declining because the government has been refusing to give export rebate on carpets as it made an agreement with the International Monetary Fund (IMF) not to provide rebates on its export, a dealer said.