Strategic Trade Policy Framework: Prime Minister clears amendments proposed by MoC

Prime Minister Yousuf Raza Gilani has cleared all amendments to the Strategic Trade Policy Framework (STPF) 2009-10, in principle, proposed by the Commerce Ministry, allowing the Ministry to submit these changes to the Economic Co-ordination Committee (ECC) of the Cabinet for final approval, official sources told Business Recorder.
Minister for Commerce Amin Fahim and Secretary Zafar Mahmood will brief the media on the adjustments in STPF on Thursday. Sources said that the Commerce Ministry has lodged a serious complaint against Finance Ministry, which had agreed to extend Rs 35 billion to Commerce Ministry, in three years, to implement the STPF, but released only Rs 1 billion. Poor releases disabled the Commerce Ministry in meeting its commitment to exporters, they added.
An official statement issued by Prime Minister Secretariat said that Prime Minister Yousuf Raza Gilani has directed the Ministry of Commerce to immediately constitute Federal Export Development and Promotion Board (FEDPB) and organise its first meeting in March, over which he (PM) would personally preside.
He further directed that leading exporters of Pakistan in various sectors may also be invited to give their proposals and views to further boost exports. He also asked the Ministry of Commerce to make a presentation to the Federal Cabinet on February 9 regarding the Master Plan for export promotion, as envisaged for declaring 2011 as the 'Year of Exports'. The Prime Minister directed the Ministry of Finance to arrange release of funds to reimburse the pending claims of the exporters.
He also stressed upon the exporters to benefit from the trade agreement signed with Afghanistan, particularly utilisation of 13 trade routes leading to Central Asian Republics. He asked the Ministry of Commerce to submit concrete proposals in this regard to ensure implementation of trade agreements.
The Prime Minister, while approving the policy thrust for the promotion of exports, directed that value-added products of agricultural sector should be encouraged. This would not only help in increasing exports but would also substantially support the agriculture sector, which would boost incomes of farmers and growers.
The Commerce Ministry briefed the Prime Minister that changes in regulatory framework were implemented but no funds were released by Finance Division for 2009-10 as against the sanctioned amount of Rs 2.5 billion. For 2010-11, the Finance Division has allocated Rs 2.5 billion. However, it agreed to release Rs 1 billion, for which necessary formalities are being completed. This fund will be utilised to settle the pending claims of different initiatives launched by TDAP, including development initiatives.
According to official documents presented before the Prime Minister, implications of non-release of funds implies that approved STPF could not be launched, which resulted in credibility erosion and errors of costing by exporters.
The Commerce Ministry's proposals in respect of the import policy have been cleared by the Prime Minister, in principle, to accommodate requests of business community. The proposed changes are as follows: (i) allow import of ring blaster/bolder ballistic guns/riveting tools and their cartridges, in favour of industrial users on the recommendations of Ministry of Interior.
These tools are used in industrial processes. The Ministry of Interior has supported the proposal; (ii) to allow permanent retention of all permissible categories of machinery/equipment imported on temporary basis by construction companies by FBR without recourse to MoC, subject to payment of all duties/taxes to be assessed by the customs under relevant laws; (iii) air guns that are currently imported by specified associations and clubs, may be allowed to be freely imported.
Currently, their import is allowed in transfer of residence and personal baggage schemes. The Ministry of Interior has also supported the proposal as these are not lethal/assault guns; (iv) domestic auto sector sends new sample vehicles for trial and testing to their OEM's to ensure quality.
Sometimes tested vehicles are damaged or retained by the principals; hence these transactions are of no commercial value; (v) in order to facilitate testing and trial of domestically proposed vehicles sent abroad to principals, the value limit may be increased to $100,000 from the present $50,000; (vi) in order to regulate import of bullet-proof raw materials, like glass used in vehicles, it is proposed that import of bullet-proof raw materials may be allowed on recommendation of the Ministry of Interior.
Import of bullet-proof vehicles is already allowed, subject to prior recommendation of the Ministry of Interior; (vi) At present, there is no condition in the existing import policy order to regulate the import of cigarette making paper.
To prevent the abuse of cigarette making paper by unauthorised manufacturers, it has been proposed to restrict import by only cigarette manufacturers registered with Federal Board of Revenue (FBR) and government of AJK; (vii) at present there is no condition in the import policy order to regulate the import of misprinted plastic/paper scrap having brands of edible products.
To prevent the use of said international brands' material in the packing of spurious edible products, it has been proposed that the import of this product may be allowed only in completely cut form; (viii) to check misuse of the facility of old and used spraying/sprinkle lorries, it has been proposed that import of lorries may be allowed subject to Euro-II compliance and certification from pre-shipment inspection agencies; and (ix) to regulate import and subsequent disposal of plastic scrap in accordance with the provisions pf Basel Convention, the following amendments have been proposed: " importable by manufacturers only for their own use, subject to the condition that they shall furnish to customs authorities a certificate from the relevant government agencies of the exporting countries that the goods are not hazardous and comply with the provisions of Basel Convention".
It was observed in the presentation that many unscrupulous importers are indulging in import of used lubricants, hydraulic and transformer oil etc as waste oil or as residue of petroleum oils. These oils are unfit for use as primary products. However, after certain refining process, these oils are repacked and sold in local market at cheaper prices. The following have been proposed: (a) all types of waste oils may be banned for import; and (b) residue of petroleum oil may be allowed only to industrial manufacturers.
The Ministry of Foreign Affairs has proposed that 'a separate paragraph may be included in Export Policy Order (EPO) 2009 as such: "export of control lists commodities:- Export/re-export/ transhipment and transit of all the commodities notified in control lists vide SRO No 1078(1) 2005 Islamabad, October 19, 2005 shall be in accordance with export control (licensing and enforcement) Rules 2009 notified vide SRO no 450(1) 2009 Islamabad, May 29, 2009".
At present, EPO is not applicable in case of following: (i) any goods transhipped at a port in Pakistan having been manifested for such transhipment at the time of dispatch from a port outside Pakistan; and (i) in case any goods stores and equipment when sold abroad on government to government basis are exported under export authorisation issued by authorised officer of the Ministry of Defence. Ministry of Foreign Affairs has proposed that banned and restricted items provided in EPO may not be allowed unless otherwise authorised. Commerce Ministry is to amend EPO accordingly.
Sources said that there are widespread reports of under-invoicing in the export of surgical/dental/medical/beauty care and like instruments. Therefore, Commerce Ministry has proposed that export of 25 items may be subjected to minimum export price restriction. The proposal has been backed by the Pakistan Surgical Association.
Poplar wood is being smuggled to Afghanistan under the garb of shuttering material, thus depleting raw material for local match industry. Commerce Ministry has proposed a ban on export of poplar wood.
It has been observed that commercial importers import used cooking oil under the garb of 'soap stock', etc. These oils are unfit for human consumption. It has been proposed by the Commerce Ministry that in order to curb this practice all types of used edible oil imported by commercial importers may be banned for import.
At present, only new vehicles are permissible for import, but no definition of new vehicles has been prescribed in IPO; this has caused confusion. The Commerce Ministry has proposed that the following definition of 'new vehicles' may be added in IPO. "The term 'new vehicles' means new vehicles manufactured during the twelve months preceding the date of importation, and also must not be registered or used prior to importation".