Duties and Tax Remission for Exports (DTRE) scheme is a futuristic vision to survive successfully in globalisation, in addition to averting future threats of anti-dumping duty by other countries, Shehzada Tahir Zaman, Director DTRE, said while addressing a seminar on DTRE.

He said that more than 90 countries are following DTRE like schemes while Pakistan is still sticking to duty drawback and refund systems. These levies have not only become obsolete but could also be used as instruments to levy anti-dumping duty. He said that most of the countries think that duty drawback and refunds are a kind of compensatory duty, which is being provided to the exporters. He said that European Union has mentioned this point in its case while levying anti-dumping duty on bed linen. Underlining importance of DTRE scheme, he said that our exporters must switch over to this scheme to avert the threats of anti-dumping duty in future.

The National Productivity Organisation (NPO) have taken up the task of facilitating modernisation, up-gradation and replacement of old and obsolete power looms which are operating mostly in the unorganised sector of the textile industry.

The NPO have given top priority to replacement and modernisation of 500 power looms in Hyderabad city. Similar programme is proposed to be launched in other power loom centres, namely Lahore, Faisalabad, Multan, Hafizabad in Punjab and Dadu in Sindh.

According to a study conducted by the NPO, the loss of productivity resulting from the poor shape of the machinery in operation in the power loom sector has been estimated at Rs 450 million annually. A programme has now been launched by the government through establishment of textile cities in Karachi and other textile manufacturing centres in the country, which is expected to spur the textile industry in general into action.

The country would not be able to compete in quota free regime if necessary measures needed towards increasing productivity of textile and clothing sector along with reducing infrastructure and power cost and rationalization of tariff were not adopted.

These and other suggestions have been made by the World Bank in its recent report on "Textile and Clothing Policy Note: Implications for Pakistan of Abolishing Textile and Clothing Export Quotas."
It further stated that Pakistan is more vulnerable to quota regime as more than 60% of the textiles and clothing exports is towards quota countries, therefore, this dependence needs to be directed at the earliest to free trade zones.

This is only possible if the atmosphere needed for such a change as outlined by World Bank study is created. This could be achieved by making immediate moves to increase the productivity of the textile and clothing sector by reducing the cost of infrastructure and power and by improving the situation of law and order.

The WB study states that on an average, Pakistani producers of these goods currently face lower export tax equivalents than do exporters in competing countries. The result will be that abolition of quota will make the products of rival countries more price responsive as the removal of quota costs will be lower for Pakistan than other countries which will give them a better margin and ability to compete.
The report states that Pakistan faces tough competition in textile made-ups from China and India apart from Vietnam and Turkey and in some categories the similarity of products goes up to 90% (towels) with China or in case of shirts and trousers 73% with China and 84% with India.

Worried by the sudden deterioration in the European Union's economic relations with Pakistan, the European Commission is hoping to defuse a series of unusually acrimonious trade rows with Islamabad over the coming months, said EU Trade Commissioner Pascal Lamy.

He said that Commission succeeded in bringing industry demands for a 45% duty on Pakistani bedlinen down to 13.1%. Tempers in Islamabad have also flared over the EU's planned "graduation" of Pakistani clothing exports from the Generalized System of Preferences (GSP) as of January 1, 2005.

Sri Lanka is seeking joint ventures with Pakistani entrepreneurs in textile sector particularly in fabrics, the newly posted Consul General of Sri Lanka to Pakistan Ms. Manel Desilva said.

Talking to the President of Karachi Chamber of Commerce and Industry, she suggested that Pakistan should hold single country exhibition in Sri Lanka to familiarize its textile and other export products. KCCI Chief called for enhancing regional trade particularly among SAARC States, as this was the only way for third world countries to survive after complete implementation of WTO regime.

Humayun Akhtar Khan, the Commerce Minister, said that the government is waiting for a formal response form the European Union on the aid memoir it submitted regarding the 13.1% anti-dumping on bed linen exports.

He said that European Union is the principal market for Pakistan's bedlinen exports with a market size of over $500 million per annum and the government would use all available options to avert anti-dumping duty on this key item.

Addressing a press conference, he said Pakistan's bedlinen exports have traditionally enjoyed entry into the EU market at EU/GSP preferential tariffs under general arrangements and in 2002, nearly all our manufactured goods, except yarns and fabrics in the textile sector and whole of the leather sector were granted full duty exemption by virtue of recognising Pakistan as a drug combat country.

Khan said Pakistani exporters of bedwear contested the anti-dumping proceedings against Pakistani bedlinen at every stage. They hired lawyers in Brussels as well as in Pakistan to prepare their case for defence against the anti-dumping by the EU Commission.

Cotton crop recorded a production of 9.4 million bales till February 23, registering a shortfall of 1.93% as compare to corresponding period of the last year.

According of provincial agriculture departments cotton crop was cultivated over an area of 3.04 million hectares of which 103 thousand acres of crop were damaged by the monsoon rains which is 3.4% of the cultivated area.

However the crop condition is stated to be satisfactory and it is likely to achieve the production target of 10.55 million bales during current season.

Trade with India is not a threat, but an opportunity, which should be effectively tapped through support and cooperation of respective governments. These were the findings of businessmen, who visited India under a delegation led by Siraj Kassam Teli, President, Karachi Chamber of Commerce and Industry (KCCI).In an era of globalization, which contemplates liberalization of trade also, the maxim of 'survival

of fittest' would be the touchstone of trade promotion. As such the days of captive market will no more return. There is a more scope of doing trade in textile products. Pakistan is well placed in certain categories of textiles. List of such goods be prepared and exchanged. Textile machinery not produced in the country be allowed to be imported from India.

Pakistan would be beneficiary of developing cooperation and collaboration in the field of textile, automobile, software, chemicals, petrol-chemicals and tourism, energy, water and a host of other items.

India will be enjoying an advantage of over 15.58% in duties over Pakistani textile exports to European markets in the quota-free era beginning from January 2005, industry sources said.

Once India accepts the European Union's offer of 30% enhancement in textile and clothing quota levels, which is currently being discussed by its industry, Pakistani textile exports will suffer severe setback on paying hefty duties ranging between 12.4% and 25.5%. The EU has recently offered to raise its 2004 textile and clothing quota levels by a hefty 30% to India with some conditional ties. However, if the offer was accepted by India it will prove disastrous for Pakistani textile exports to EU member states.

Despite the fact that Pakistan is presently enjoying 12.4% concession under the GSP (Generalized System of Preferences), but the same will be ending from January 1, 1005. Against this, India which is enjoying a reduction of 2.5% in duty under the EU's most favoured nation (MFN) status is paying 9.9% and will continue to do so even thereafter.

This means all Pakistani textile exports will have to pay 2.5% additional duty against Indian exports to EU states when concession of a 12.4% duty is withdrawn under the GSP from January 1, 2005.

The Central Board of Revenue (CBR) has withdrawn 3% 'Further' sales tax from manufacturers of 'spun yarn'. The CBR through a SRO said that this facility would be one time and time-bound and end June 30, 2004. The facility has been granted with retrospective date of the first March 2004.
The facility, however, has been confined to member's textile mills of All Pakistan Textile Mills Association (APTMA). The facility would be provided under the Special Procedure for Manufacturers-Cum-Suppliers of Spun Yarn Rules, 2004, issued under SRO No. 166.

The European Union is likely to increase textile quota for Third World countries, including Pakistan, from May 1 2004. Ten states, which will join EU in May, would follow textile quota restriction on all the developing countries under Union rules regarding import.

After joining the EU these new member states will impose quota on textile imports from the developing countries and EU will increase its quota for the developing countries--as compensation. The ten states are Czech Republic, Estonia, Cyprus, Lithuania, Latvia, Hungary, Malta, Poland, Slovenia and Slovakia.

Pakistan has finally decided to challenge the levy of 13.1% anti-dumping duty by EU on Pakistan's bed linen in the dispute settlement body of WTO. An official source said that the decision was taken at a meeting headed by Commerce Minister, Humayun Akhtar Khan.
Earlier, the Commerce Minister had written a letter to the EU Trade Commissioner Pascal Lamy for re-considering the levy of anti-dumping duty on Pakistan's bed linen. However, the official said that so far no response had been received from the EU in this regard and, therefore, Pakistan has now decided to take the legal route.
The official said there was a great demand of Pakistan's bed linen in the EU markets due to its quality and competitiveness but he said the levy of anti-dumping duty on bed linen would make the commodity to lose its competitive edge.

With a series of structural reform measures in place, Pakistan was determined to effectively participate in the process of globalization, said the Minister for Privatization and Investment, Dr. Hafeez Shaikh.
He said that Pakistan's economy, one of the positive elements of the country's economy, had been its higher traditional growth and the country had obtained 5.1% growth in GDP during the last year and was trying to achieve 5.5% to 6% this year.

Dr. Hafeez Shaikh further stated that the globalization brought opportunities but also created serious challenges to the poor nations by permitting a greater international division of labour and a more efficient allocation of resources.

For the fruits of globalization to be shared fairly and equitably the developing countries would like the global trading regime to be made fairer and equitable; to obtain market access to the products of developing countries particularly, textile and clothing; and to eliminate the frequent use of anti-dumping and countervailing duties.

Exports of textile manufactures during the first eight months of 2003-04 surged by 15.7% as compared to corresponding period of previous year. According to the external trade figures released by the Federal Bureau of Statistics, this category of exports stood at $5142.18 million, accounting for 35.0% of overall exports of Pakistan ($7877.53 million). Thus their share in total exports registered an increase of 2.7% over the same period of 2002-03.

The share of textile manufactures in the finished goods exports ($7230.40 million) category, consequently, rose to 71.1%. In July-February of 2002-03, they had contributed 70.9% to finished goods exports.

The Chairman; All Pakistan Textile Mills Association (APTMA) Waqar Monnoo has termed the EU decision to levy 13.1% anti-dumping duty on Pakistani bedlinen as politically motivated and unjustified.
In a statement, the APTMA Chief said that the EU move is aimed at forestalling Pakistan from availing tremendous growth opportunities under quota-free regime from January 1, 2005. He further said that EU's concession of duty-free import of bedlinen under GSP scheme would also be withdrawn in case of Pakistan to coincide with the date for the abolition of textile quota.

The APTMA Chairman urged the government to evolve a joint strategy with private sector for safeguarding the interest of exporters concerned by taking up the matter urgently with WTO to counter EC's action.

The existing fiscal benefits, being provided to the infrastructure projects under Build, Operate and Transfer (BOT) agreements, are also likely to be made available to container terminals at ports by providing incentives of duty free import of machinery and equipment, not manufactured locally. Official sources said that the Ministry of Privatization and Investment has prepared a proposal to the effect, which would now be submitted, to the Cabinet Committee on Investment (CCOI) for approval.

According to the proposal, while the investment climate in the country had not been very encouraging for the last several years, withdrawal of incentives already made available to investors, sent negative signals. This inconsistency in the investment policy has also affected the confidence of the local and foreign investors.

Indian High Commissioner Shivshankar Menon has said that trade volume between India and Pakistan would increase to $ 6 billion within a year, provided the prevailing tempo of friendship sustained.
He said that the signing of SAPTA agreement and 'Islamabad Declaration' hold great promise not only for trade between India and Pakistan but also for the entire South Asian region.

Cotton farmers and the textile industry in Pakistan are fighting an uphill battle to keep their competitive edge in quality and price in quota free world, as they have to buy inputs at higher cost than their counter-parts in the rest of the cotton-producing world.

While most of the cotton producing countries provide direct or indirect subsidies to their farmers the Pakistani farmers have to pay 15% sales tax on inputs like fertiliser and pesticides. Still some countries like India and China provide electricity for tube wells at subsidised rates but the irrigation of cotton crop through tube wells in Pakistan is costly due to 5 to 6 times higher electricity cost.

Pakistan needs more trade and investment than aid from the United States, Commerce Minister Humayun Akhtar Khan said during a meeting with a six-member delegation of Pakistan American Business Association (PABA).

He said that market access was more important for Pakistan than getting aid from the US. Mr Khan said that comparative tariffs for Pakistani textiles exported to US were high due to which our exports become less competitive compared to those from other countries. He said that it would be the first step towards establishing sounder trade relationship leading towards the ultimate goal of Free Trade Agreement (FTA) between the two countries.

Imports of machinery increased by 23.7% to nearly $2201.33 million during the period July-February, 2002-04, as compared to corresponding period of previous year. A closer look at the composition of machinery group, however, shows that the accelerated imports of all its constituents may not necessarily signify improvement in production activities. In many cases, this may rather be due to the trader's eagerness to take maximum advantage of the reduced tariffs on finished goods - mainly consumables, etc.

Import bill of textile machinery, construction & mining machinery, has shown as $363.38 million and $60.71 million, their imports went up by 11.3% and 1.9%, respectively.

Tariq Ikram, Minister of State and Chairman Export Promotion Bureau (EPB) said that exports to India could increase by $700 million if trade link opens between the two neighbouring countries.

According to a study conducted by the Export Promotion Bureau (EPB), India imports $700 million worth of such products that Pakistan exports world wide at more competitive prices'. Ten countries were identified as target markets with their export potentials. These countries with the target export volumes are US $5 million, United Kingdom $2 million, Germany $1 million, France $1 million, Italy $3 million, Spain $0.5 million, UAE $2.5 million, Sri Lanka $0.75 million, Bangladesh $0.75 million and Afghanistan $0.75 million.

Besides setting a total target of $18 million for these countries, Saudi Arabia, Brazil, Canada, Egypt, Australia, Kenya and Poland have been identified as potential markets too.

Siraj Kassam Teli, President, Karachi Chamber of Commerce and Industry (KCCI), has urged Portugal and other European countries not to impose anti dumping duty on Pakistani exports since the decision made by the EU was not correct and based on some misunderstanding.

Pakistan has already protested against the decision and the international Audit in this regard would prove Pakistan's point of view, he said, while talking to Fernando Oliveira, the Honorary Consul of Pakistan in Portugal who called on him at the Chamber. Mr Oliveira called for exploring new strategy and new ways for improvement of trade between Portugal and Pakistan and suggested that the trade volume could be doubled in short span of time if business representatives are posted in Portugal both by the Pakistan government and the Pakistani entrepreneurs.

Pakistan should avoid putting too many items in the sensitive list of India trade so as to make the South Asian Free Trade Area (SAFTA) agreement successful. This has been pointed out by the Karachi Chamber of Commerce and Industry in its recent study on "SAFTA" its challenges and opportunities for Pakistan", prepared by its research and economic development cell.

Pakistan can export with advantage to vast SAFTA market, products such as cotton yarn, textile fabrics, leather products, surgical instruments, herbal products, processed foods, fruits and vegetables and other agricultural products to meet regional shortfalls.

Finance Minister Shaukat Aziz said that the next budget would be investment and growth-oriented and would ensure continuity of economic policies. Speaking as a Chief Guest at the Sixth Export Excellence Awards distribution ceremony of the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), the Minister said that last four years' economic achievements would be consolidated in the next budget.

He said that readymade garments and other value-added sectors were the real hope for enhancing exports as well as creating a lot many job opportunities as big textile units nowadays provided little jobs.
Mr Aziz said that the country for a long time could not break the psychological barrier of $8 billion in exports but last year it managed to export goods worth $11 billion. He expressed the hope that this year exports would cross $12 billion mark.

He said Pakistan was the 9th largest textile exporting country and 20th in apparel exports, but all we need is to improve our performance and come among first ten ranking countries in exports of textiles and apparels.

Shaukat Aziz rejected the PRGMEA Chairman's appeal to give some sort of subsidy or cushion to the value-added textile sector to meet the high prices of yarn and fabrics.

A Central Board of Revenue (CBR) survey has revealed that 112 polypropylene industries have been on tax evading spree and were thus causing loss to the national exchequer of billions of rupees. The survey carries number of looms, location of each industry along with its tax number, tax paid and evaded during the year of survey ie 2000-01.

Inaction on the part of tax authorities against polypropylene industries despite the fact that almost 99% functional units were indulging in massive tax evasion is strange. Another side of the story is that during the last few years' polypropylene industrialists were expanding their units.

The survey was conducted in all major cities including Karachi, Lahore, Faisalabad, Peshawar, Gujranwala, Rawalpindi/Islamabad and Quetta and several others.

Local polyester staple fiber (PSF) manufacturers are expected to increase prices by Rs 3 per kg to Rs 4 per kg due to higher international oil prices, which are at year-high levels.

Abdullah Amin, a PSF sector analyst at AKD Securities, said local producers are expected to revise upwards the price of PSF by Rs 3 kg to Rs 4 per kg soon mainly on the back of 5% increase in the prices of purified terephthalic acid (PTA) in the international market. Currently PSF prices stand at Rs 88.80 per kg, including 20% sales tax.

Companies such as Ibrahim Fibres, after having expanded its capacity only last year to 209,000 tonnes per annum, is now looking to further enhance this to over 400,000 tonnes per year by 2006.

The 3rd International Garments, Textile & Leather Machinery, Accessories and Fabrics Exhibition - IGATEX Pakistan to open at Karachi Expo Center from April 21 to 24, 2004, would showcase latest equipment, Technology and services of textile and garment industry.

The exhibition is a joint venture between Pegasus Consultancy of Pakistan, CEMS of Singapore and supported by Ministry of Commerce, Export Promotion Bureau of Pakistan and different associated trade bodies of various industries of textile and garment sector.

With more than 300 exhibition from Austria, China, Germany, France, Hong Kong, India, Japan, Italy, Korea, Taiwan, Spain, Sweden, Switzerland, it would be one of biggest ever exhibition in Pakistan.
With Pakistan being one of largest producers of cotton and various related textile and garment products, it is imperative there is very strong need for events such as IGATEX Pakistan.

A spokesman of the District Government of Faisalabad has contradicted a news item attributed to District Nazim that trade tax on power looms was being withdrawn.

According to a handout issued by Deputy Director Public Relations Punjab, the District Nazim has told a delegation that district government has already given contract for the collection of Trade Tax and Excise and Taxation Department had already started recovery of the tax. Hence at this stage the withdrawal or trimming its rate was not possible.