Pro-India Trade Policy – I

The first Trade Policy-2008-09 of the PPP government has been announced without mentioning import target. According to the policy, imports cannot be quantified due to continuous instability in the oil and food prices in international markets. This means all previous commerce ministers of Pakistan as well as world were fool to make import targets. However, the export target was fixed at $ 22.10 billion, representing an increase of 15 percent over the last year, the same rate achieved in 2007-08.

The policy said the government has tried to draw up a trade policy that has a new direction and vision and will have an impact on the lives of those who are the neediest. How it will impact positively the poor's lives was not indicated, presently it is impacting negatively.

Moreover, it seems that the government has unofficially given the status of 'Most Favoured Nation' (MFN) to India. Commerce Minister, Chaudhry Ahmed Mukhtar said India is our neighbour and we are gradually liberalising our bilateral trade. The composite dialogue process, especially on economic and commercial cooperation has been instrumental in addressing the bilateral issues. We are announcing to enlarge the list of importable items from India, which is based on the requests of our stakeholders, which stakeholder requested them was not mentioned. The whole business community, except a few, is opposing imports from India. They said commerce minister has announced a policy which only encouraged imports from India while exports to that country was totally ignored.

The policy said cheaper raw material sourced from India would make exports more competitive in international markets. Import of diesel and fuel oil from India allowed, because it will be cheaper due to the difference in transportation cost. This will also help us to address our global trade deficit. How it will reduce the global trade deficit is not known.

Customs duty on the import of CNG buses was already reduced from 15 percent to zero in the budget 2008-09. Moreover, in case any Indian manufacturer of CNG buses makes a firm commitment to establish manufacturing of such buses in Pakistan, the Ministry of Commerce may provide special dispensation for import of 10 buses via Wahga from each possible investor as test consignment.

The policy expanded the list of importable items from India, not expected to be reciprocated. The Indian import policy allowed only a small number of imports from Pakistan. The Commerce Minister also restricted trade with India to Wahga border and sea route; but it is expected that it may open trade through railways as well as along other border check posts.

The ministry of commerce notifies amendments in the trade policy and also issued a list of importable goods from India, in which 136 more tariff lines had been added, enhancing the list from 1802 to 1938. Pakistan has diverted its global trade worth $ 4.132 billion towards India following inclusion of 438 new importable items in the positive list during the past 10 months.

Ahmad Mukhtar also announced a new scheme designed to improve exports. The over and above three existing schemes, namely duty and tax remission and export scheme (DTREs) - allowed to even those Indian imports that are not included in the 1938 total tariff lines - to those items that are manufactured locally and then exported, temporary import scheme as well as manufacturing bond scheme.

It is to be noted that the DTREs have been considerably misused in the past and, over and above what is available under DTREs, raises duty drawback by one percent of the FOB value for 14 traditional products, including carpets, surgical instruments and sports goods. It is hoped that the loopholes for abuse would be well plugged in the new scheme.

Chaudhry Mukhtar has not mentioned of research and development (R&D) for export industry in general and the textile sector in particular. It was proposed that the government would make necessary adjustments for the textile sector's gas bills. Thus the policy ignored the textile sector at least for the time being. Due to persistent crisis in the sector and the high cost of doing business, the import of the textile machinery has declined by 13 percent. However, the government has extended the six percent R&D support programme for the apparel sector up to June 30, 2009.

Enumerating the factors on the external front he said the international oil prices have been doubled, from around $ 68 to $ 145 per barrel. The increase in the international prices of food items, especially wheat and edible oil, the depressed US economy and turmoil in the international financial markets has reduced external demand for our exports.

In spite of the challenges, on the internal and external fronts that made it difficult for exporters to fulfil their export orders on time and at competitive prices, the export sector has registered a growth of 13.23 percent during 2007-08.

On the internal front power shortages, resulted in load-shedding of electricity and gas impacted our economy. Monetary and exchange rate policies, rising costs of salary bills and raw material, were other factors. While the government itself has increased salaries for Rs 4,000 to Rs 6,000, therefore, no one can be blamed for higher salary bills. Blaming increasing competition in export markets cannot be justified because it is not only for Pakistan but all countries are facing the same problem.

The large-scale manufacturing registered a growth of only 4.8 percent as compared to 8.6 percent last year. Last year the export target was $ 19.22 billion, which was $ 2.2 billion higher than the $ 17 billion achieved in 2006-07. During the year the exports of services were $ 2.9 billion and defence-related exports amounted to $ 63.9 million. Performance of textile group was not satisfactory as the exports were $ 9591.9 million i.e., $ 245.8 million or 2.5 percent less than last year. In spite of this decrease the overall exports growth was 13 percent.

Pakistan exports a few categories such as cotton manufactures and synthetic textiles, leather, rice and sports goods, concentrating on seven products only to seven countries. They collectively accounted for around 72.4 percent of the total exports. In terms of markets also, traditionally 50 percent of exports go to seven countries namely the US, Germany, Japan, UK, Hong Kong, Dubai and Saudi Arabia. The trend from 2003-04 to 2006-07 shows that the growth of exports during this period was around 114 percent in Latin America, 81 percent in Africa and 60 percent in the European group of countries.

The policy said it would help reduce costs of doing business, enhancing competitiveness of exports, but what measures are being taken was not indicated while gas, electricity and oil prices increase making products more costlier. The minister said in order to reduce cost of manufacturing and to make our exports more competitive, it has been decided that:

Plant, machinery and equipment imported to set up a unit in DTRE scheme will be exempted from duty and taxes. Inputs in DTRE will also be allowed to be imported from India.

Pakistani seafood is facing difficulty in exports, therefore it has been decided to undertake following measures to support the sea food sector:

Consultancy services will be arranged through FAO/INFOFISH for aquaculture; peeling shed at Karachi Fish Harbour will be set up in coordination with the Trade Development Authority of Pakistan (TDAP) and Sindh government. Funding will be arranged through the Public Sector Development Programme. Training programme for fishermen in catching of fish will be arranged by the Sindh government. Initial programme of training for trainers will be arranged in collaboration with TDAP. It is expected that these steps will help the fishers sector to enhance exports.

Gems and jewellery is one of the non-traditional items and to encourage the exports and investment all anti-export biases, gold, silver, platinum, palladium, diamond and precious stones has been exempted from levy of customs duties and sales tax. Mining industry is facing serious problems of availability of good quality stones for further processing due to old style blasting which creates wastage of precious resources. It has been decided that the import of machinery/equipment for mining/quarrying and grinding of minerals (along with spares) would be allowed from India. However, it is difficult to hope that this industry would develop as a consequence of this policy.
Source-thepost.com.pk

Hundreds ‘dig in dirt’ at Herkimer Diamond Mines

HERKIMER —Hundreds of local and out-of-state residents looking for something to do over the weekend found their way to the Gems Festival at the Herkimer Diamond Mines.

Andy Hall, of Morgantown, W.Va., toured the mines’ museum Sunday with his children and girlfriend. He said he was impressed by the large display of Herkimer diamonds, and he was taken aback by how they can be found in the mines.

“It just kind of blows my mind – like how come we don’t have these back home?” he said.

The three-day Gems Festival wrapped up Sunday, after more than 500 people attended the primary day of the festival Saturday, Herkimer Diamond Mines associate Mike Hinman said.

“There were a lot of people,” he said. “Even though the weather was bad, it was still pretty good.”

Visitors Saturday were able to bring in gems to be appraised, participate in jewelry classes and hunt for gems. On Sunday, the museum and shop were busy, while people outside sifted through bags of rock and dirt in search of their own treasures.

Much can be found in a $10 bag, said Bill Bath and Jeanne Krull of Andover, N.J., as they added to their large collection that included Herkimer diamonds — quartz crystals that mimic diamonds — and an arrow head.

“I’m halfway through it, and I found all this,” Bath said.

Krull said they wanted to go camping, and the mines were a big draw that added to their decision to visit Herkimer.

“Who doesn’t like a little digging in the dirt or playing in the water every now and then?” she said.

Bath and Krull said they planned to buy souvenirs for their friends and pass along a good word about the area.

“It’s nice up here,” Bath said.

Michael Christian and his son, Judah, 10, also rummaged through rocks Sunday. They used a sluice box to hold the larger findings while water pushed away the dirt and smaller rocks.

They just moved to Skaneateles from Seattle in March, and Sunday was already their second visit to the mines, Michael Christian said.

“He’s pretty astute in it,” Michael Christian said of his son. “He can name the rocks; I can’t.”

Shortly after, it proved to be true.

“I found another one,” Judah Christian said as he grabbed a clear, pinkish gem. After his father asked what it was, Judah said he thought it was a rose quartz.

As they continued to look, Michael Christian raised his head and smiled.

“It’s just cool to do this kind of stuff with your kids,” he said.

Source-uticaod.com

Govt mulls ban on soda ash export to hold prices

NEW DELHI: Taking the war on inflation to new frontiers, the government is considering a proposal to ban exports of soda ash and encourage imports of the commodity that goes into construction material such as glass and bricks.

This is in addition to the proposals currently under consideration of the chemicals and fertilisers ministry. The ministry is examining slashing excise duty on major petrochemical inputs.

The idea is also to ease the raw material constraint faced by small manufacturers of glass and magnesium carbonate. Soda ash or sodium carbonate is also used by the brick industry as a wetting agent to reduce the amount of water needed to process clay.

According to the user industry, prices have moved up by at least a third in the last eight months. Prices are on an upward spiral globally too. The world’s largest soda ash maker Brussels-based Solvay SA said on Thursday it is considering to raise prices by 50%, according to overseas news reports.

In the domestic market, the material which used to cost Rs 10,000 a metric tonne in March last year, is sold at about Rs 14,750 a metric tonne now. Chemical companies are contemplating further increase in prices now. They claim that banning exports and pressurising producing companies to lower prices would address their raw material shortage. The government is likely to take a call on the issue shortly. It has asked industry associations like Alkali Manufacturers Association of India to give its feedback on the issue.

Inflation based on wholesale prices is now at an alarmingly high level of 11.98%. With polls in six states later this year and general elections early next year, the government is determined not to leave any possible measure in its efforts to cool prices.
Source-indiatimes.com

Mid-Atlantic Animal Import Center Feasibility Study Released

The Maryland Department of Agriculture's Maryland Horse Industry Board today released the Mid-Atlantic Animal Import Center Feasibility Study, which identified the Midfield Cargo Complex of the Thurgood Marshall Baltimore Washington International Airport as the best potential site for the Center.

"The time it takes to ship a horse overseas begins from the time that animal leaves the barn to the time it plants its hoof in the soil of its new home. Adding a five to 15 hour van ride on top of the time in flight is not cost effective and causes additional stress on the animals being shipped," said Agriculture Secretary Roger Richardson. "A permanent Mid-Atlantic Animal Import and Export Center could reduce the cost of shipment for horse owners and buyers, and reduce the stress on transported horses thereby increasing the overall condition and productivity of animals shipped overseas."

The study also detailed the process of importing and exporting live equine to and from the United States. Currently, only three permanent centers accept horses for importation in the United States.

The center was deemed feasible if coupled with another entity such as a state laboratory or animal health center. Due to the seasonality of the shipment of horses, with the strongest peaks occurring between the months of December and January operating the facility jointly with another entity could better utilize staff, optimize operations, and create new jobs and economic impact for the region.

The study was funded by a combination of public and private, federal, and state entities, including the USDA through the Federal-State Marketing Improvement Program, the Maryland Department of Agriculture, the Maryland Horse Industry Board, the Maryland Horse Industry Foundation, and the Maryland Department of Business and Economic Development.

The study was conducted by the private firm Owl Creek Consulting of Berlin, Md., in cooperation with the Business, Economic, and Community Outreach Network of the Franklin P. Perdue School of Business at Salisbury University.

Export sector strengthening: Ricketts

The significance of strengthening the country exports is clearly reflected through the interim Governments creation of new policies to boost the export industry, says interim Minister for Trade and industry, Tom Ricketts.

Interim Government policies such as the National Export Strategy and its continuing emphasis on the private sector development road map and the Fiji Export council are some of the creations.

Mr Ricketts, speaking at the launching of the Fiji Island Trade and Investment Bureau organised 2008 DHL Exporters of the Year Award, said the theme of "Exports Enhancement: The path to economic growth", couldnt have arrived at a better timing when present challengers faced our exporters.

Meanwhile, the interim Finance Minister Mahendra Chaudhry had earlier stated that the exports sector has seen steady growth and the economy is benefiting from its re-exports of mineral fuels given the dramatic increase in the global fuel price.

"Exports for the first 5 months of 2008 totalled $507 million- up 24.2 per cent over the same period in 2007, a much improved performance compared to 2005 and 2006," he said.

Source-fijitimes.com

Tyre industry demands duty-free import

Kochi: With a serious crunch operating in the availability of natural rubber (NR), the tyre industry has reiterated its demand for duty-free import of 1 lakh tonnes of NR without any further delay.

The tyre industry, that consumes 57 per cent of the natural rubber produced in the country, is facing the worst ever raw material availability crisis. Over the last few days, the availability of sheet rubber has been woefully inadequate to meet the requirement of the industry that is already bearing the brunt of high rubber prices, Rajiv Budhraja, Director General, and Automotive Tyre Manufacturers’ Association, said. Currently, domestic NR prices are ruling at a higher level than even international prices. Natural rubber accounts for 41 per cent of the raw material cost in the tyre industry, he said.

“It has never happened that the very availability of sheet rubber becomes an issue despite the fact that the natural rubber prices have touched a historic high. The average landed price of NR was Rs 134 during July, which is 51 per cent higher than the average price in September last year,” he said.

Anticipating price

Despite the fact that the production of natural rubber has gone up by almost 30 per cent during April-July this year, the industry is facing the crunch. On the contrary, consumption has gone up by only 21 per cent in the said period. It is believed that rubber growers and traders are holding on to the stock in anticipation of further rise in the prices of rubber, he alleged.

“The supply crunch, if continued, is likely to seriously disrupt production schedules of tyre companies. We therefore urge the government for immediate intervention by way of allowing the duty-free import of 1 lakh tonnes of natural rubber to tide over the current crisis,” Budhraja said.

A demand-supply imbalance is unfortunate for a commodity where a fine balance can be achieved if producing and consuming interests work in tandem. The production-consumption gap, which was 49 per cent during April-July 2007, has narrowed down to 22 per cent in April-July 2008.

The industry will, unfortunately, need to look for increased imports if the existing availability crisis does not subside, he added.

Source-sify.com