Proposed FTA skewed in favour of Turkey

The Senate Standing Committee on Commerce and Textile Monday termed the proposed Free Trade Agreement (FTA) with Turkey as disastrous for Pakistan, observing that national interests are not protected under the pact. The officials of Commerce Ministry admitted the pathetic situation, saying that Consul General in Istanbul Dr Yousaf Junaid has communicated to the government that unless the issue pertaining to FTA with Turkey is taken at the highest level, the matters are not going to resolve.
The senior joint secretary commerce admitted that Turkey''s lobby, especially the textile lobby, is very strong. These comments were made during the committee meeting which met here with Syed Shibli Faraz in the chair. Faraz said that relations between countries are based on interest and there is no concept of brotherhood. But the case is opposite in Pakistan and national interests are not being protected as professionals are not being appointed for such jobs. The government should develop interest-based trade relationships with other countries, the committee chairman added.
The committee directed the ministry for presenting the details about Dr Junaid, saying he has been sitting in Istanbul for the last 4-5 years. The committee asked the ministry to give Pak-Turkey bilateral trade figures before and after his appointment. The committee also inquired about the relevant experience and qualification of ambassador to the WTO in Switzerland/Geneva, Dr Syed Tauqir Hussain, but the ministry failed to respond to the queries and pleaded that the committee would be informed in the next meeting in this regard.
The committee also discussed the bill to amend the Pakistan Tobacco Ordinance, 1968, ''The Pakistan Tobacco Board (Amendment) Bill, 2017.'' Chairman Pakistan Tobacco Board (PTB), Sohail Altaf informed the committee that amendments have been proposed to broaden the scope of tobacco definition in accordance with the modern day requirements of tobacco industry, broadening the tax net and settling disputes amongst PTB, tobacco dealers, contractors and manufacturers, etc.
According to current definition of tobacco: "Tobacco means the commodity which is made from the leaves of the plant ''Nicotiana Tobaccum'' or ''Nicotiana Rustica'' and is commonly known as tobacco and includes adjacent tender stalks or green tobacco but does not include tobacco waste." According to the proposed definition of tobacco as per the bill, tobacco means the commodity made from any part of the plant "Nicotiana Tobaccum" or "Nicotiana Rustica", used or consumed in the manufacture of cigarettes or any other tobacco products or by-product through any other modes, forms and processes.
The instant amendment is aimed at broadening the scope of tobacco definition in accordance with the modern day requirements of tobacco industry, broadening the tax net and settling disputes amongst PTB, tobacco dealers, contractors and manufacturers, etc. The Supreme Court of Pakistan vide judgment dated 27-04-2015 declared a levy of FTC on Khaka, Karra, Rorh, etc. (products made from the main stalk of Rustica tobacco) ultra vires on grounds that these products are not covered under the definition of tobacco as per section 2(f) of PTB Ordinance 1968.
The Supreme Court through its judgment also directed the PTB to suitably amend section 2(f) of PTB Ordinance through Act of Parliament/Ordinance, if it wanted to levy cess on products not covered under section 2(f). The PTB in pursuance of the judgment of the Supreme Court dated 27.04.20 15 requested the Ministry of Commerce for amendment in Section 2(f) of PTB Ordinance (I of 1968) along with the proposed draft.
The committee chairman said the sale of substandard cigarettes is rampant. Sohail Altaf said that the government of Pakistan has signed an agreement with the WHO on controlling tobacco use. The agreement protocol has been restricting the production, growers and retail sale, and hence it would negatively affect the revenue as well. Due to lack of quorum, further discussion on the bill was deferred till the next meeting.