Trade policy: Cabinet set to okay framework - Business Recorder (blog)

Wednesday, 30 January 2013 12:50 Posted by Asad Naeem

MUSHTAQ GHUMMAN

ISLAMABAD: The federal Cabinet is set to approve three-year Strategic Trade Policy Framework (STPF) 2012-15 on Wednesday (today), envisaging exports worth $95 billion, establishment of an Exim Bank with Rs26.108 billion to be released for the initiative against an initial demand of Rs60 billion by the Commerce Ministry.

The Commerce Ministry proposed that the Finance Ministry should be directed to release outstanding EDF payments worth Rs15 billion in its favour (for the period between 2005-06 and 2011-12).

It was also proposed that in future, a mechanism be devised to ensure that Export Development Surcharge (EDS) was transferred directly to the Ministry of Commerce by appropriate amendments in the existing arrangements.

According to official documents, the main goals of STPF 2012-15 are: (i) making export sector the engine of growth; (ii) enhancing Pakistan’s export competitiveness in the short as well as the long term; and (iii) increasing Pakistan’s cumulative exports to $95 billion during 2012-15

PRINCIPAL ELEMENTS OF STPF 2012-2015

Proposed Elements of STPF 2012-15 seeks to strengthen different aspects of Pakistan’s export competitiveness directly or indirectly. These elements have been identified on the basis of an evaluation of STPF 2009-2012 and an analysis of emerging global trade scenario after extensive consultations with the private sector and other government departments.

The following are the principal elements of STPF 2012-2015: (i) focus on regional trade; (ii) create regulatory efficiencies; (iii) promote agro-processed exports; (iv) increase exports from less developed regions of Pakistan; (v) promote exports of services sector; (vi) enhance access to export financing and credit guarantees; (vii) revamp export promotion agencies; (viii) mobilise new investment in export oriented industries; (ix) enhance product and market development and diversification; (x) undertake effective trade diplomacy; (xi) increasing green exports;(xii) rationalise the tariff protection policy; (xiv) enhance role of women in exports; and (xv) reform and develop domestic commerce.

PROPOSED MEASURES

The measures to achieve STPF 2012-15 goals are divided into four categories: (a)  institutional strengthening and governance; (b) measures to enhance export competitiveness; (c) regulatory amendments in the trade regulations; and (d) payment of outstanding EDF dues and streamlining EDF releases in future.

INSTITUTIONAL STRENGTHENING AND GOVERNANCE

Rationalising Tariff Protection Policy (TPP):

Unhindered tariff protections, maintained over a period of time can create dependencies and distortions sacrificing competitiveness and consumer welfare. Ministry of Commerce proposes to adopt the following guiding principles, to create a competitive environment that caters for the dual aspects of providing a level playing field for the domestic industry as well as consumer welfare: (i) promoting competitive markets in Pakistan; (ii) insuring conformity to international agreements and practices; (iii) promoting domestic and foreign investment; (iv) creating level playing field for Pakistani firms in international as well domestic markets; (v) due consideration to consumer welfare; (vi) catering to the changing needs of Pakistan’s economy; and (vi) create an enabling environment to pursue the legitimate goal of industrialisation in Pakistan.

Domestic Commerce Reform and Development

In Pakistan, domestic commerce is not very well connected to international trade. Traditionally, Trade Development Authority of Pakistan (TDAP) staffed by the officers of Commerce & Trade Group, takes care of the supply side and domestic commerce issues impacting upon Pakistan’s international trade. TDAP used to have functioning Export Facilitation Committees dealing with trade related Federal and Provincial authorities, which is no more the case now. With the devolution of Ministries after 18th Amendment, weak linkages between Domestic Commerce and International trade can seriously undermine Pakistan’s export competitiveness in the coming yeaRsRecognising this linkage and lack of any institutional arrangement to pursue the objective of promoting domestic commerce, it is proposed to: (i) make the following insertion in Rules of Business 1973 as one of the functions of Ministry of Commerce ‘Domestic Commerce Reform and Development in collaboration with other Ministries, provincial and local government’; and (ii) create a Domestic Commerce set up in the Ministry of Commerce comprising of two wings i.e., Domestic Commerce Wing and Trade in Services Wing. This will be headed by a BS-21 officer and assisted by two BS-20 officers, four BS-19 officers and eight BS-18 officers and all these posts shall be encadred for Commerce and Trade Group, given the technical nature of the challenge; and (iii) Ministry of Commerce would ensure that the officers concerned establish a strong base of domestic commerce reform with the help of extended stay at the Ministry.

The new set up will: (a) establish necessary institutional mechanism and business processes;(ii) introduce or leverage the introduction of necessary Domestic Commerce regulations such as the wholesale/retail market;(c) framework, insolvency/ bankruptcy regulations, framework for construction services and framework of interface of government agencies with business community, framework for coordination between different tiers of government in post 18th Amendment scenario etc;(d) bring out annual State of Domestic Commerce Report; and (e) anchor the re-organised Export facilitation Committees of TDAP at the federal level, (f) set up an Inter-governmental Domestic Commerce Reform and Development Committee, including senior level representation from the provincial governments, in consultation with all the stakeholdeRsThe newly created Domestic Commerce Wing would act as a Secretariat to the Committee and ;(g) the major responsibilities of the Committee would be to oversee the introduction of necessary laws and regulations and institutional arrangements to develop Domestic Commerce in Pakistan and strengthen the linkages of Domestic Commerce with Pakistan’s international trade.

Establishment of Pakistan Land Port Authority (PLPA) to Strengthen Regional Trade

Trade integration with South Asia, China and the ECO countries is proposed to be accorded high priority with the objective to develop mutually beneficial regional production and trade networks. Our border land ports lack world class trade facilities. In order to transform our land ports into efficient facilitators of trade while simultaneously be responsive to risks such as security issues, smuggling, human trafficking etc. it is proposed to establish Pakistan Land Port Authority of (PLPA) with the following mandate:

a) It is envisaged to function as a statutory body, under the administrative control of the Ministry of Interior with representation from the FBR, M/o Foreign Affairs, M/o Commerce; M/o Communications, M/o Railways, M/o Planning & Development Division, M/o Food Security & Livestock, M/o Science & Technology and M/o Anti Narcotics as well as representation from the respective provincial government; (b) It would be responsible for cohesive management of cross-border movement of goods & people. It would be vested with powers on the lines of similar bodies like existing Port Authorities and Civil Aviation;

(c)  With the coming into being of Pakistan Land Port Authority, the land port entry points would be transformed into Integrated Check Points to enable smooth cross-border movement of individuals, vehicles and goods under an integrated complex. This would facilitate the processes of immigration, customs, security, quarantine, etc. To enable this, the present infrastructural facilities would be up-graded wherever needed. The spadework to establish PLPA would be carried out by a ‘Set up Committee’ to be headed by Secretary Ministry of Commerce in close collaboration of other Ministries.

Setting Up of EXIM Bank

Availability of capital to meet an export order is the most important element of the export cycle as it directly impacts an exporter’s competitiveness. Therefore, governments involve themselves in ensuring that adequate, cheap, timely trade financing is available to exporteRsTrade financing facilities and support is provided by governments through EXIM Bank and Export Credit Guarantees institutions; unfortunately, Pakistan is one of the rare countries, which does not have an EXIM bank. Pakistan’s exporters desperately need legitimate trade financing support as they are facing serious challenges such as (i) Crowding out of private sector from debt market, (ii) High interest rates and limited availability of financing for export or investment in export oriented manufacturing. (iii) Very little credit risk coverage, (iv) Very little incentive to the importer to import from Pakistan as compared to other competitoRsThe proposed EXIM Bank, with the help of provincial governments, would not only provide export credit, it would also provide supplier’s credit and export credit guarantees. It will help reduce cost of borrowing for the export sector on long term basis and help reduce their risks.

Estimated cost: Seed money Rs1 billion for the year 2012-13 and Rs.5 billion for 3 years i.e. 2012-15.

Promotion of Services Sector Exports.

Services sector contributes 54percent to the economy but export of services of Pakistan is very low. Our services exports stood at $5 Billion in 2011-12 whereas the global trade in services was $18.2 Trillion. To tap the enormous potential of export of services, especially to Asia, it is proposed: (i) to create a Foreign Trade Wing for Services in the Ministry of Commerce;(ii) to establish the Services Trade Development Council ; and  (iii)  to set up a special task force for facilitating development of E-Commerce

Creating Regulatory Efficiencies

Lesser but smarter regulations are necessary for promotion of international trade therefore it is proposed to:- (i) strengthen National Tariff Commission so that it can play its role more effectively and efficiently;(ii) creation of Resource Management Unit by strengthening of International Trade Organization Wing (ITO) at the Ministry of Commerce and ;(iii) ineffective mechanism for resolution of trade disputes has tarnished Pakistan’s image amongst the international business circles and it discourages emergence of Pakistan both as a destination for investment as well as a reliable import source. In order to make the system effective, it is proposed to revamp the existing system of international trade dispute resolution. It is proposed to constitute a committee with Secretariat in Ministry of Commerce and members from TDAP, FPCCI/ Chambers, Law Justice & Human Rights Division, Secretary Law and Justice Commission of Pakistan, representatives from Karachi Dispute Resolution Centre (KDRC) to propose an action plan for setting up an International Trade Dispute Arbitration Council and revamp the existing Commercial Courts to give the country a more efficient, time saving, relatively inexpensive mechanism for trade dispute resolution. The committee would be required to give their recommendation within three months which will be placed before the Cabinet, for its approval.

Strengthening of Training and Product Development Institutes

The training and product development Institutes, running under MOC/ TDAP, are proposed to be strengthened after carrying out detailed ‘entity improvement diagnostic’. This would help these institutions produce better quality human resource and designs for our industry.

Revamping Export Promotion Agencies & Trade Monitoring Committee

Export promotion needs strong performance by a country’s Export Promotion Agencies [EPAs]. EPAs in Pakistan are under-resourced and not tuned to modern challenges of export promotion.

Ministry has proposed to: (i) overhaul trade offices abroad by providing both financial and improved human resource after carrying out a performance analysis. This will be done in the following way:- (a) creation of Export Promotion Wing in the Ministry of Commerce within available resources to provide a mechanism to monitor the performance of Trade Officers and address their problems;(b) through the Export Promotion Wing, Ministry is instituting a system of annual performance evaluation, having both qualitative and quantitative aspects with the possibility of recalling 3 lowest performing Trade Officers;(c) Trade Officer and local based Trade Development Officer (TDO) would spend 15 days in Pakistan to work closely with supply side institutions and exporting firms;(d) performance evaluation report of Trade Officer would be jointly initiated by the Ambassador and regional trade officer and countersigned by Secretary TDAP and second countersigning by Secretary Commerce. In countries where there is a single trade officer, the PER would be initiated by an overall regional trade office which is proposed to be established to complement the regional dimension;(e) regional dimension would be added to the functions of Trade officers;(f) the work place environment of Trade Officers would be improved and;(g) Trade Officers manual would be updated providing detailed job description and ToR’s and complete work plan for Trade Officers including Annual Plan, Reporting requirements etc.

ii) Realising that Trade offices abroad do not work in isolation as their performance also depends on the performance of the institutions like TDAP, Pakistan Horticulture Development and Export Company (PHDEC) The Ministry proposes to develop and implement an Entity improvement plan for both the organisations.

Trade Committee

A high level ‘Trade Committee’ is also proposed to be constituted under the chairmanship of Commerce Minister with Export wing in the Ministry of Commerce as its secretariat, with the involvement of relevant government Ministries/ departments, Senior Businessmen, Academia etc (i) TC should meet at least on a quarterly basis - TC would monitor implementation of STPF 2012-15 to remove bottlenecks in achieving desired export targets and it would examine issues for promoting Pakistan’s foreign trade and strengthen international competitiveness

EXPORT COMPETITIVENESS DEVELOPMENT MEASURES

Ministry of Commerce is presenting export development initiatives to address deficient areas in Pakistan’s export competitiveness. It may be noted that in line with the suggestion of Ministry of Finance, Ministry of Commerce has revisited the proposed promotional schemes and has revised the resource requirement downwards to Rs.26.108 billion for the next three years and Rs.4.995 billion for the year 2012-13, as compared to the earlier demand for Rs.60 billion for three years and Rs.16 billion for the year 2012-13 respectively.

Mark-up support of 2percent on prevailing LTFF for future import/ purchase of machinery.

Long Term Financing Facility (LTFF) of State Bank of Pakistan is aimed at providing relatively concessional financing to manufacturer cum exporters to increase their production capacity. However, investment in export oriented manufacturing activities has still been dwindling in the recent past due to multiple supply side constraints.

In order to encourage fresh investments in export oriented industries in a tough economic environment, it is proposed to provide mark up support to selected sectors by making available LTFF at 2percent lower than the prevailing rates. The eligible sectors would be as follows: Leather, Engineering, Horticulture, Processed Food, Marble & Granite, Sports Goods and Computer related services.

Estimated cost: Rs.500 million for the year 2012-13 and Rs.3 billion for 3 years i.e. 2012-15.

Mark-up Rate support of 1.5percent on Export Finance Scheme (EFS) to selected export sectors

Export Finance Scheme (EFS) is a major scheme by the State Bank of Pakistan for the exporters for provision of running finance and aims at boosting exports of the country by promoting the value added sector by providing somewhat concessional financing to the exporteRsThe current markup rates under Export Finance Scheme for the borrower stands at 11percent (banks get re-finance from State Bank of Pakistan at 10percent and are permitted a maximum spread of 1percent).

To ease the constraints on running capital, it is proposed to provide a further markup reduction of 1.5 points from the prevailing rates to the following focus sectors: fish and fish preparation, processed foods, meat and meat preparations, sports goods, footwear, leather products, surgical goods, cutlery, onyx products, pharmaceuticals, electric fans, transport equipment and electrical machinery.

Estimated cost: Rs.150 million for the year 2012-13 and Rs1.2 billion for 3 years i.e. 2012-15

Ad-Hoc relief @ 3percent of FOB to offset the impact of higher cost of utilities for Pakistani exporters in selected sectors

Small exporters in Pakistan have to face the challenge of energy crisis with limited resource. While the bigger exporters may have alternate sources of energy such as captive power plants, the smaller ones have to bear the brunt of load shedding of energy and gas shortages. This significantly adds to their costs and reduces their competitiveness.

To offset the increasing cost of utilities, it is proposed that selected non-textile exporting sectors may be provided ad-hoc relief 3percent of FOB, in order to stay in the export business. The proposed sectors are Fish and Fish Preparations, Processed Foods, Meat and meat preparation, Sports goods, Footwear, Surgical goods/ medical instruments, Cutlery, Electric Fans, Auto Parts and Furniture.

Estimated cost: Rs.3 billion for the year 2012-13 and Rs14 billion for 3 years i.e. 2012-15

Marketing Development Assistance for Regional countries

Pakistan’s trade with regional countries is on the rise. China has become our largest trading partner. Afghanistan has become our second largest export market; Normalisation of Trade relations with India is also a major initiative. These developments present both challenges and opportunities for Pakistani exporteRsIn order to up-scale our market development activities in neighboring markets, including China, India, Afghanistan and Iran this Ministry proposes to undertake different promotional initiatives including market research, support to non-traditional exports, support to marketing efforts of private sector etc. We also intend to encourage trade in Afghanistan against Letters of Credit by providing incentive which will be worked out ‘in consultation with the State Bank of Pakistan.

Estimated cost: Rs125 million for the year 2012-13 and Rs2 billion for 3 years i.e. 2012-2015

Export Promotion campaigns for agro-processed products

In order to help our farmers align themselves better with the international market, it would be very useful to educate our farmers on international demand trends and techniques to boost farm level productivity.

It is, therefore, proposed to launch export promotion campaigns with the help of graduates of Agriculture Universities of Faisalabad, Rawalpindi, Peshawar and Tando Jam. Selected students will be trained to reach out to the farmer community and train them in best agricultural practices needed to bring their produce in conformity with the international standards.

Estimated cost: Rs5 million for the year 2012-13 and Rs25 million for 3 years i.e. 2012-15

Encouraging the Opening Retail Outlets

Opening retail sale outlets in major importing countries is the best tool for introducing and exporting high quality and branded exports of Pakistan. International presence of Pakistani firms at present is very low as compared to our competitors.

To support the initiative and to motivate exporters to introduce their finished products, it is proposed to provide subsidy on these outlets up to 75percent, 50percent, 25percent per annum of the rental cost of retail outlets or ware houses in the first, second and third year, respectively, in the export markets in Asia, Africa and Australia.

Estimated cost: Rs50 million for the year 2012-13 and Rs380 million for 3 years i.e. 2012-15

Subsidising 50percent Cost of Plant and Machinery for Dates and Olive Processing

Pakistan is the fourth largest producer with excellent quality of dates in areas of Khairpur, Dhaki, D.I. Khan, D.G. Khan, Turbat, Pungor and Washak but only 13percent of the total produce is exported and that also as a low quality product. Lack of the necessary processing facilities results in the wastage of large quantities, reducing the income of farmers that in turn cause rural poverty. Similarly, Pakistan can save precious foreign exchange which is now used on the import of edible oil by promoting the production and processing of Olive in KPK, Baluchistan and Gilgit-Baltistan areas.

To reduce the wastage of produce, increase income of the farmers and foreign exchange earnings, it is proposed that the government may provide 50percent subsidy in the cost of plants and machinery for dates and olive processing.

Subsidising 50percent cost of plant and machinery for establishing processing plants for fruits and vegetables in Gilgit Baltistan (GB)

A large amount of fruits and vegetables from GB region is wasted due to lack of processing plants and facilities of fruits and vegetables. This wastage causes reduced income for the people of GB. Due to their long distance from major urban centers, investors shy away from investing in GB. Value addition of fruits and vegetables has become even a greater imperative.

To incentivise establishment of fruits processing plants in GB, it is proposed that government may provide 50percent subsidy in the cost of plant and machinery for establishing processing plants for fruits and vegetables in Gilgit Baltistan.

Mark-np subsidy @ 50percent of the prevailing mark-up rate, for setting up of Meat processing plants in bordering provinces.

Livestock farming has emerged as a major contributor to GDP. Meat and meat preparations exports have grown in the last few years and stood at $175 million in 2011-12.

In order to increase processed meat exports it is proposed to provide mark-up subsidy @ 50percent of the prevailing mark-up rate, for setting up of Meat processing plants in KP, Baluchistan and Gilgit, Baltistan. This initiative will go a long way in increasing meat preparation exports from the under developed regions of Pakistan and will also create job opportunities in these areas.

Estimated cost: Rs55 million for the year 2012-13 and Rs265 million for three years i.e. 2012-15.

Up-gradation of Rice Inspection Labs

Rice is one of the major export items of Pakistan. Yet many of our shipments are rejected due to inferior quality of rice. In order to ensure that only quality rice is exported, it is vital that Labs testing quality of rice are well equipped and recognised. Currently, the relevant labs are being run and managed jointly by REAP and TDAP and are under equipped, under staffed and un-accredited. There is a need to up-grade these labs and get them accredited with international bodies. This would help establish a mechanism which is transparent, cheap and smooth for rice exports. It will ensure that only quality rice is exported and brand of Pakistan as a quality rice supplier remains intact.

Estimated cost: Rs5 million for the year 2012-13 and Rs30 million for 3 years i.e. 2012-15

Mark-up subsidy @ 100percent of the prevailing mark-up rate and 50percent subsidy for wire saw cutting machinery to reduce wastages for establishing mining and processing in KPK, GB and Baluchistan

Mining and quarrying sector represent an important activity in Pakistan’s economy, contributing around 0.5percent to Pakistan GDP since 1990. At present majority of marble and granite mining is done through primitive mining methods, most commonly by using excessive explosives, which results in huge wastage of this non-renewable resource of the country. It also causes serious environmental degradation. Our inability to modernise our mining methods by adopting machine enabled cutting is one of the major reasons for our lagging behind in the sector and compromises our objective to enhance export potential in this field.

To control un-scientific arid explosive based orthodox mining, it is proposed to: (i) Provide mark-up subsidy @100percent of the prevailing mark-up rate on the installation of wire saw cutting machines in KPK, GB and Baluchistan;(ii) 50 percent subsidy on the cost of wire saw cutting machinery and ;(iii) all such mining concessioners which are not using controlled blasting and are not switching to scientific mining, their mining concessions may be reviewed by Mining and Mineral Departments of the respective provinces in such a way that an ‘environmental degradation penalty’ is imposed on explosives blasting from 01.07.2015 and a complete ban on their mining is imposed with effect from 01.07.2017.

Estimated Cost: Rs.10 million for the year 2012-13 Rs.90 million for 3 years i.e. 2012-15.

Strengthening Women Chamber of Commerce

The representation of women in established Chambers of Commerce and Industry is very thin. The government has been encouraging the establishment of Women chambers in the recent past. These Chambers are expected to help them to become successful entrepreneuRsThe capacity of these Chambers however is still very limited. There is an urgent need of government support for Women Chambers so that women participation can grow in international business. Ministry proposes to support Women Chambers by strengthening their research and reach out capabilities.

Estimated cost: Rs7.5 million for the year 2012-13 and Rs20 million for 3 years i.e. 2012-15

Establishment of Leather Export Promotion Council

Traditional trade bodies have not been very successful in promoting exports. Ministry of Commerce proposes to establish a model project in leather sector to combine public and private sector in the management of sector specific trade organisation to promote export of leather sector, which is the third largest export sector of Pakistan. In future, its success can be replicated in other sectoRsIt shall help in better and sustained communication between the Government and private sector for promotion of leather exports.

Estimated cost: Rs7.5 million for 2012-13 and Rs28 million for 3 years i.e. 20 12-15

Establishment of Services Export Development Council

Services sector contributes more than 55percent to GDP of Pakistan. However, our services exports were a paltry $5 billion for the year 2011-12. There is hardly any concentrated effort to boost services exports from Pakistan. This Council shall work as a nucleus for promoting services exports from Pakistan in the years to come. As the Services Sector in most of the cases is labour intensive, a boost in Service export has a great potential to create employment in large numbers.

Estimated cost: Rs12 million for 2012-13 and Rs70 million for 3 years i.e. 2012-15

REGULATORY AMENDMENTS IN TRADE REGULATIONS

The regulatory amendments being proposed to Import Policy and Export Policy Orders 2009 have been developed after extensive consultation with private sector and consensus development exercise in the form of inter-ministerial meetings. These amendments would further facilitate Pakistan’s trade and contribute to the ease of doing business by simplifying the procedures and strengthening the regulatory processes.

Easing Import of Motorised Wheel Chairs

As per current Import Policy Order second hand/used wheel chairs can only be imported by disabled persons directly or through charitable institutions or hospitals when received as donations or gifts subject to submission of certification by numerous government/provincial departments.

In order to facilitate disabled persons, it is proposed to allow import of second hand motorised wheel chairs freely by anyone for use by disabled persons.

Import of Ambulances

Currently import of second hand/used ambulances is allowed when donated by any organisation/ individual to a charitable or non-profit organisation, trust or hospital provided they fulfill certifiable standards and have minimum ten years of useful life.

In order to facilitate much needed import of second hand/used ambulances for hospitals, charitable institutions or other large organisations such as universities etc., it is proposed to allow import of second hand/used ambulances subject to the following conditions – (i) certification by the Original Equipment Manufacturers (OEM) that the vehicle was built as an ambulance; (ii) pre-shipment inspection from recognised agencies ;(iii) the ambulance should not be older than five years; and (iv) undertaking from the importing institution that the ambulance shall be registered in the name of that institution and shall not be used for any other purpose.

Banning Job Lot/ Stock Lot fin ports

Currently import of job lot and stock lot items, where the custom duty is zero while the raw material attracts duty upto 5percent, are permissible for import.

These imports not only hurt manufacturers in most cases but also deceive consumeRsIt is proposed to impose complete ban on import of job lot and stock lot goods.

As per existing import policy order, specialised vehicle-mounted machinery and transport equipment is allowed in favour of construction, mining companies and petroleum sector companies for use in the projects in Pakistan, subject to condition of Euro-III emission standards compliance. Moreover, vehicles like Prime Movers, Waste disposal trucks, fire fighting vehicles are also allowed subject to Euro-III emission standards compliance. This condition cannot be met as Euro-III compatible fuel is not available in the market. At present, Euro-II compatible fuel is available in the market. Therefore, it is logical to change this condition at import stage from Euro-III compliant vehicles to Euro-II compliant vehicles, up till the time that Euro-III compliant fuel is introduced in the country.

It is therefore proposed that the condition of EURO-II may be made applicable on import of all types of specialised vehicles.

Protecting Public Health

Currently non-sterilised surgical needles and syringes are importable by industrial units engaged in the further processing of these items into value added, final and finished products.

In order to safeguard health of the general public and to ensure that no misuse takes place, it is proposed that only the industrial units registered with relevant public health agency may be allowed to import non-sterilised surgical needles and syringes.

Safeguarding Health and Environment

Currently imports in violation of Import Policy Order are confiscated or in some cases released against redemption fine.

In order to ensure strict compliance with the provisions of the Import Policy Order discourage willful violation by importers, it is proposed: (i) all goods of banned list imported in commercial quantity shall not be released under any circumstances. Such goods should be exported at importer/ shipping lines costs and ;(ii) goods on restrictive list which are of sub-standard quality effecting public health including short shelf life medicines/ pharmaceutical raw materials/ edible products imported in contravention of Import Policy Order should be destroyed within a period of six months without offering any release.

Protection to Local industry and Use of Tyre Scrap as Alternate Fuel

Presently, anybody can import rubber scrap of various types subject to the condition that they are cut into pieces. The above facility is misused for import of second hand/used tyres, which is also a safety hazard.

In order to save the local tyre industry and to encourage the use of tyre scrap as alternate fuel, the following proposals are submitted: (i) import of waste and second hand tyres may be allowed only in “at least two completely cut, detached from each other pieces form” to industrial consumers only subject to fulfillment of environmental requirements of using tyres as a fuel to be prescribed by Federal/Provincial Environmental Authorities and ;(ii) other types of rubber waste and scrap may continue to be imported with the same condition of completely cut into pieces.

Ban on Hazardous Plastic Waste / Scrap

Currently import of all types of plastic scrap is allowed in favour of manufacturers for their own use subject to submission of certificate from the relevant government agency in the exporting country that the scrap being imported are not hazardous and comply with the provisions of the Basel Convention.

In order to ensure that such consignments of plastic scrap do not contain any hazardous scrap, it is proposed to impose complete ban on import of the following categories of plastic scrap: (i) hospital waste of all kind; (ii) used sewerage pipes; and (iii) used chemical containers

Regulate import of non-hazardous plastic scrap

In order to regulate import of plastic scrap efficiently it is proposed that plastic scrap/ waste, other than the categories proposed to be banned in proposal may be allowed to be imported by the industrial consumers as raw material for their industry subject to the following conditions: (i) certification confirming appropriate manufacturing facility and determination of import quota from concerned Federal/ Provincial Environmental Protection Agency and ;(ii) inspection from technically qualified designated Pre-Shipment Inspection companies that the imported consignment does not contain any hazardous waste, as defined in the Basel Convention

Trade Facilitation

Currently export of vegetable and cooking oil upto 16KG packing is allowed.  In order to facilitate exporters and to encourage value addition, it is proposed to allow export of Vegetable Ghee & Cooking Oil in packaging of upto 25 KG.

Ensuring Quality & Standards

Existing Import Policy Order provides that import of goods shall be subject to same quality standards as prescribed for domestically produced goods.

It is therefore proposed that all domestic standards formulated by Pakistan Standard Quality Control Authority (PSQCA) may be made part of Import Policy to ensure that imported goods conform to notified.