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Trade Policy 2003-2004 Speech

Ladies and Gentlemen Assalam-o-Alaikum,

It is my privilege and pleasure to present toyou the Trade Policy for the fiscal year 2003-04.

I will begin with a global perspective for thisyear's policy. Last year has been a frustratingyear for global economic recovery. After thesignificant downturn in late 2001, precipitated

by the events of 9/11 and subsequentdevelopments, the world economy wasshowing signs of recovery during the first halfof 2002. The optimism for global economicrecovery largely dissipated during the secondhalf of the year, owing to a series of adversedevelopments, unfolded on the international

economic scene. These developments includedseveral major corporate scandals andbankruptcies in the United States, resulting inbursting of the equity market bubble, risinguncertainties in the run-up to war in Iraqcausing oil prices to rise sharply, and a recentoutbreak of SARS virus, badly affecting

business environment in Asia. As a result, theworld economic outlook remained subdued,and global trade remained sluggish duringfiscal year 2002-03.

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Economic growth remained somewhat weakerin the major growth poles of the worldeconomy. Weaker outlook in the advanced

countries and higher oil prices have adverselyaffected the pace of economic recovery in thedeveloping countries.

The global situation is now showing signs ofimprovement. Uncertainties surrounding theconflict in Iraq are broadly resolved. There areexpectations that global economic recoverywould gradually reassert itself, during thesecond half of the 2003. Major growth poles ofworld economy are likely to perform betterthan last year, and the growth outlook fordeveloping countries appears encouraging.Pakistan is likely to benefit from a modestrecovery in the global economy, during thecurrent fiscal year.

The new trade policy is based on the optimismderived from our high export performance lastyear, in spite of the adverse external factorsthat I have just mentioned. With the hard workand dedication of our exporting community,

and the consistent policies of the government,we not only crossed the Export Target of US $10.4 billion, that had eluded us in thepreceding years, but even surpassed the targetreaching a level of 11.03 billion dollars for the

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first time in our history. In the rapidlychanging world trade scenario, we cannot becomplacent with our achievements. For

sustaining the export growth rate, we have towork still harder, using all our resources andexploiting our full potential, to avail newopportunities and meet new challenges.

In the formulation of the policy, we have heldwide ranging consultations with all stakeholders - the Federation and its constituentChambers of Commerce & Industry, the Trade& Industry Associations, and exporters in allsectors, in long formal meetings and througheliciting their views and comments in writing.We have received hundreds of suggestions andproposals from the trade and industry whichhave all been given close consideration. Here, Iwould like to thank all those organizations andindividuals who have taken the trouble ofapplying their minds to the problems andissues of international trade and have given usvaluable suggestions and comments.

We have also held Inter-ministerial and Inter-

departmental consultations, and haveconsulted with the governments of all the fourprovinces.

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We now have to be ready also for compliancewith the WTO agreement on TRIPS - traderelated intellectual property rights. In this field

also, we have made substantial progress. Theestablishment of Pakistan Intellectual PropertyRights Organization is already approved andnecessary legislation will come soon so thatPIPRO can start functioning immediately.Legislation is already in place for protection ofTrade Marks, Patents and Industrial Designs.

Our manufacturers will henceforth need to bevery careful about infringement of IPRs, toavoid possible trade sanctions against us.

For smooth operations in our production andexports, we also have to ensure compliancewith environmental and social standards, andadoption of security measures required by ourcustomers. There are other health-relatedrestrictions on export of agricultural products,under the WTO agreement on Sanitary andPhytosanitary Measures, which are alreadycreating problems in exports of fish, fruits,vegetables, rice and wheat. We have to take

effective and credible measures, and adoptbetter standards to give satisfaction to ourbuyers, in the context of their health standardsand quarantine regulations, which they canapply under the WTO agreement.

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World trade is now dominated by regionaltrading blocs like the EU, NAFTA, ASEAN, APECwhich give preferential treatment to their

members. Unfortunately, although suchdiscriminatory treatment cuts across therecognized MFN principles, these are allowedby the WTO rules. Until a truly free multilateraltrading system comes about, we are alsocompelled to seek trade alliances, where-everwe can, by dint of our historical close

relationships with a number of countries.

Like other WTO members, our services sectoris also being liberalized and opened up toforeign competition. This will require Pakistaniservice providers to improve their efficiencyand provide quality service to our customers.

EXPORTS

In the beginning, I referred to our high exportperformance last year. It would be appropriateto give you some of the highlights:

Exports in 2002-03 crossed US $ 10 billionmark and reached level of $ 11 billion.

Export target of $ 10.4 billion exceeded by6%.

Exports increased by 21% over precedingyear 2001-02.

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Exports covered 91% of imports ($ 12.18billion) against 88% last year.

Trade deficit further reduced by 4% to $

1.15 billion. Exports : GDP ratio increased by 2% to

17% of GDP.

Now, some significant details:

The textile sector fetched $ 7.17 billion or67% of our total exports.

The textile sector posted the largestincrease of 24% over previous year.

Within the textile sector, three categoriesi.e. bedwear, woven garments andknitwear, crossed $ 1 billion each, for thefirst time.

Rice exports increased by 22%, including

39% increase in basmati. Leather footwear increased by 48%.

POL products increased by 63%. Developmental categories increased by

36%. These are engineering goods, ITproducts, fisheries, fruits and vegetables,marble and granite, chemicals and

pharmaceuticals. Export of wheat rose by 81% to $ 129

million.

Cement exports increased by 180% mainlyto Afghanistan.

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Exports in other categories, that are non-traditional products, increased by 48%.

In terms of direction of trade, against totalgrowth of 21%, exports to American regionincreased by 15.5%, to European Union by27%, Middle East 36%, Asia 14%.

The increase in exports has been possiblelargely due to:

Greater market access allowed by theEuropean Union.

Investment in the textile sector forBMR/expansion.

Overall increase in unit values of ourexport items.

Prudent handling of Cotton Policy and

Textile Quota Management. Stable exchange rate, low inflation rate

and lower mark-up rates.

Consistent economic policies. Reduced tariffs.

Aggressive marketing. Export Facilitation

Product and market diversification. Abundant availability and reduced cost of

finance.

IMPORTS

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I would now briefly touch upon imports.Imports last year were US $ 12.2 billion, whichis 17.8% higher than the preceding year. The

main contributing factors were :

Higher import of edible oils to the tune of $187 million.

Increase in POL imports by 9% or $ 254million, due to increase in prices by morethan 18%.

Machinery Group imports increased by75%, mainly in import of textilemachinery, electrical machinery andagriculture machinery.

Chemicals Group imports increased by15%, mainly fertilizer (32%), plasticmaterial (17%) and other chemicals(19.7%).

Major items of imports were edible oil ($ 580million), tea ($ 172 million), textile machinery($ 525 million), motor-vehicles ($ 492 million),power generating machinery ($ 263 million),POL products ($ 1.7 billion), crude oil ($ 1.4billion), textiles ($ 223 million), chemicals ($

2.2 billion), fertilizer ($ 240 million), plasticmaterial ($ 423 million), iron steel ($ 400million), and paper and paper board ($ 130million).

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PROJECTIONS FOR 2003-04

I would now like to talk about our projectionsfor 2003-04. Based on our assumptions thatthe exchange rate will remain stable, thatthere will be greater access to export finance,and that the domestic and externalenvironment will not be faced with any newchallenges, and a targeted growth of 9.7% ontop of 21% growth last year, we expect toreach an export level of US $ 12.1 billion in thecurrent year, and an import level of US $ 12.8billion. If we reach these targets, the tradedeficit will be further reduced to less then US $1.0 billion.

EXPORT STRATEGY

Before I come to the specific initiatives in thenew Trade Policy, it will be appropriate to giveyou an outline of our strategy for the currentyear. The main elements of this strategy are :

Reducing cost of doing business Increasing market access Technology & skills up-gradation Social, Environmental & Security

Compliance

Encouraging export-oriented foreigninvestment

Region-specific strategy

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Country & business image building

Capacity building of exporters Incentivization of exporters

Value addition

PROPOSALS FOR TRADE POLICY 2003-2004

Up-gradation Fund

An Up-gradation Fund will be managed underpublic-private partnership. This Fund willfinance the initiatives for Technological Up-

gradation, Social, Environmental and Securitycompliance, setting up combined effluent andwaste water treatment plants, hiringconsultants, professional marketing companiesabroad, upgrading Industrial Clusters,warehousing Pakistani products abroad,Agriculture Export Processing Zones, Special

Export Zones, Garments Cities and BrandAcquisition. Mechanism for the operations ofthe Fund will be developed by Ministry ofCommerce. The estimated financialrequirement for the Up-gradation Fund fromthe Government of Pakistan is Rs. 3.74 Billion.

Technology Up-gradation and Marketing atenterprise level

For technical management and exportmarketing, consultancy services will beprovided at the enterprise level on 50:50 cost

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sharing basis from the Up-gradation Fund. Inthe case of declining sectors, like leather andcarpets, contribution from Fund may go upto

75%.

Joint Ventures

EPB will engage consultants to identify, adviseand assist export enterprises for entering into

joint ventures with compatible JV partners inforeign countries on 50:50 cost sharing of

consultancy services out of the Up-gradationFund.

Industrial Clusters

For a number of export products, in whichPakistan has or can create a competitive edge,the scheme of industrial clusters has beeneminently successful in cities where theproduction of these goods is traditionallyconcentrated. In collaboration with UNIDO,such clusters are already in operation, or beingdeveloped, in Gujrat for electric Fans, inWazirabad for cutlery, in Lahore for wovengarments, in Korangi (Karachi) for leather andin Karachi for gems & jewellery.

Five more clusters will be organized for sportsgoods in Sialkot, for surgical goods also inSialkot, for auto parts in Karachi, for electrical

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appliances in Karachi and Lahore, and forknitwear also in Karachi and Lahore.Infrastructure facilities will be provided for

these cluster cities and cluster products. Thesewill include training facilities, testing facilities,including laboratories, common bondedwarehouses for raw materials, accessories andcomponents and combined marketing supportwhere feasible.

A Cluster Development Directorate will beestablished in EPB, headed by D.G (Supply) inthe Head Office and two Directors (South andNorth) with sectoral cluster developmentagents for purposes of coordination with localand international stake holders. These agentsfrom EPB will work in offices located centrallyin each cluster area with representatives ofSMEDA, SSIC, internationally a credited testingagencies, SME Bank and, where available,donor agency sponsored technical resourcepersons, to provide one window service toenterprises for all infra-structure facilities,including Banking, Communications, Water,

Power and Gas.Contamination-free Cotton

Contamination - free cotton is vital for qualityproduction and cost effectiveness in the Textile

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Sector. For this purpose not only the trainingof the growers and ginners is essential but alsoprocurement of contamination-free cotton

needs to be ensured.

A Training Institute will be established outof EDF for training the farmers and theginners to ensure supply of contaminationfree cotton to the textile industry.

Financial support to ginners will beprovided out of Technology Up-gradationFund for improvement of ginning.

TCP will continue to intervene and procurecontamination-free cotton at a premium asand when needed.

Quality control standard will be developedfor cotton.

A research center will be established atRahim Yar Khan for development of qualitycotton.

Relocation of Industries with Export Potential

In the post-quota environment from 1st Jan.2005, the textile and clothing industries in

USA, EU, and Canada are expected to opt forrelocation to the developing countries for lowerproduction costs. Financial assistance will beprovided from the Up-gradation Fund for suchrelocation of textile and clothing industries,

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also of industries in other sectors with exportpotential, for the following types of transferexpenditure, on 50:50 cost sharing basis:

Freight expenditure: machinery / equipment transfer cost.

Statutory requirements: wharfage and handling

Local expenditure: inland transport, offloading, insurance and agency chargesServices Sector

Board of Investment will remove equityrestrictions from investments in the servicessector.

Construction/Engineering services sector

The construction companies are not in aposition to furnish bid bonds and performancebonds to get the contracts as it requires largecapital outlays. A fund for the purpose will becreated which may act as a collateral forcommercial banks to issue the bid andperformance bonds.

Country Business Image Building & GenericProduct Advertising

Country Business image has a strong impacton buyers in sourcing products and services. A

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will be made available to exporters, selectedon a pre-determined criteria agreed betweenthe EPB and stakeholders of different products

on a 50:50 charge basis. Management of suchspace and retail sales will be outsourced toreputed well established Retail Chain Storecompanies.

Brand Name Acquisition / Franchising

Brand name is an important component in

export marketing and carries the respectiveimage of product, quality and business-relatedservices. Branded products usually attracthigher price advantage. Established brandnames in foreign markets are often availablefor purchase or franchising. A new scheme willbe launched to enable exporters to

acquire/franchise brand names. Support will beprovided to exporting companies for obtainingbank loans at 6 months Treasury Bills auctionrate + 2% under the prudential regulations ofSBP.

EXPO Pakistan

An annual Mega Event will be held in KarachiExpo Centre, and Lahore Expo Centre (whencomplete), to be called EXPO PAKISTAN. Inthis exposition, all products of Pakistan with anexport potential will be put on display and

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export-related seminars would be held. Thisevent will be widely publicized. Selectedforeign buyers, buying houses and trade

specialist media will be invited to the EXPO asguests.

Promotional Expenses

At present State Bank of Pakistan allowsretention by the exporters to the extent of 5%of their export earnings for international

advertisements, commission, etc. To allowgreater facility to exporters for marketing andpromotions, It has been decided to enhancesuch retention to 10%.

Inter-Ministerial Committee

An Export Facilitation Inter-MinisterialCommittee will be established, comprising theMinisters of Finance, Commerce, Industries &Production, Investment & Privatization, theGovernor State Bank of Pakistan, SecretaryCommerce and Chairman EPB. SecretaryCommerce will also act as the Secretary of theCommittee. The Committee will meet at leastonce in a quarter and oversee the progress andalso the implementation of trade policy. It willalso be responsible to resolve all irritants facedby the business and export community.

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in Pakistan. Financial assistance for acquiringISO certification will be continued.

Cost of Utilities

To reduce cost of electricity for industrialsectors, WAPDA / KESC will be allow ?off peakhour rates? and ?bulk rates? for industrialconsumers.

Land Route Trade

Export under claim for rebate/duty draw backis allowed through two land routes only i.eTorkham and Chaman. In order to facilitatebusinessmen on both sides, additional landroutes may be introduced in consultation withthe Governments of NWFP and Balochistan.

Hall Marking.

Establishment of Gold Assaying/Hallmarkingfacility is required for quality control &certification of jewellery. In collaboration withthe London Assaying Office, A similar facilitywill be set up in Karachi.

Waste Water Treatment

A major requirement of textile and leatherexport industries is waste water treatment andmanagement of toxic wastes for protection of

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environment. Waste water treatment plantscan not be afforded by individual exporters.Such plants will be set up, on a collective and

cooperative basis, in cluster cities ofKarachi(Korangi, SITE, Landhi, Hub),Lahore( Kot Lakhpat, Raiwind/Manga Road),Kotri(Nuriabad), Multan, Faisalbad,Gujranwala, Hattar and Peshawar. Theseplants will be financed from the Up-gradationfund

Compliance machinery and equipment

The import of plant and machinery forenvironmental control is at present exemptfrom sales tax but is subject to customs dutyof 10%. Such plant, machinery, equipment,spares and consumables will be subjected to

the lowest duty rate of 5%.

WTO Awareness

Priority needs to be accorded to educating ourmanufacturers and exporters about WTO TradeRules particularly about full liberalization ofInternational Trade in textiles and clothing. Ithas been decided:

a.to establish a WTO Directorate in EPB forcreating awareness among the

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stakeholders and get feed back from themon WTO related issues.

b.to enhance capability in the National Tariff

Commission in the spheres of Anti dumpingand Countervailing Duties and SafeguardMeasures as well as assisting stakeholdersin filing their applications with NTC.

Intellectual Property Rights (IPRs)

The environment for enforcement of

Intellectual Property Rights (IPRs) in Pakistanis a source of concern to a number of ourtrading partners and is a serious disincentivefor potential foreign investors. It is importantthat the issue of IPRs is addressed urgently.Establishment of Intellectual Property RightsOrganization (PIPRO) is already approved.

Proceed with the required legislation so thatPIPRO will be start functioning immediately.

Civil Awards

To recognize and reward exporters whoachieve high performance in exports, apackage of incentives will be provided. This willinclude grant of civil awards on Pakistan Dayand Independence Day and Prime Minister?sGold Medals, according to predeterminedcriteria.

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Freight Subsidy

Government had allowed 25% freight subsidyon products whose total exports in any of thepreceding three years (1999-00 to 2001-02)were not more than US$ 5 million, and, for allproducts exported to countries where ouraverage annual exports in the preceding threeyears were not more than US$ 10 million. Thescheme has been instrumental in productdiversification and geographic expansion ofexports. It A scheme will be continued till June30, 2004.

Import of Samples

At present, imports of samples of nocommercial value are allowed to

manufacturers-cum-exporters, at zero dutyunder PCT heading 9910, subject to thecondition of individual value not exceeding US$50 and provided there is not more than onesample of each kind or quality. Individual valuelimit for such samples will be raised to US$100. Individual cases beyond the increased

value limit of $100 will be considered by CBRon the recommendation of EPB.

Export of Vegetable Ghee

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At present, vegetable ghee in tins up to 5 Kg isallowed to be exported under claim for dutydraw back. Export of ghee in 16 Kg packs will

be allowed.

Agri-products and fisheries

In order to leverage the export potential of agriproducts and fisheries, it has been decided toestablish the following:

Agriculture Export Processing Zones ?Sargodha, Rahim Yar Khan, Mirpur Khas,Peshawar

Apple Treatment Plant at Quetta ? Grading,polishing & packaging

Date Processing Plant at Turbat, DI Khan &Khairpur

Shrimp farming facility in Baluchistan Fish Processing, Hatcheries and Canning

Plants at Karachi, Gawadar & Pasni Collection points and cold storage facilities

for fruits and vegetables esp. grapes ? inBaluchistan & NWFP

Organic Foods promotion ? mapping &

certification Potatoes and onions ? dehydration, cold

chain, timely export management

PACKAGED RICE

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At present, concessional rate of income tax at0.75% is applicable to export of branded ricein packs of 5 Kg only. The facility will be

extended to all branded packs of rice upto 50KG. In this context, a brand definition andprocedure will be developed .

SPECIAL EXPORT ZONES

Two Special Export Zones will be established,one at Karachi and the other in one of the

industrial cities of Punjab. These zones will beowned and operated by corporate entities, inwhich GOP, multilateral institutions and thestakeholders would be equity partners. TheCommercial banks will be encouraged toarrange financing under the SBP prudentialregulations at 6 months Treasure auction rate

plus 2%. These zones would have moderninfrastructure like water supply, severage, selfpower generation and effluent treatmentplants. These zones will be focusing on textilesector particularly in dyeing, processing andfinishing sectors.

GARMENT CITIES

To meet the challenges of WTO rules basedtrade regime, particularly the elimination ofquantitative restrictions on international tradein textile and clothing following the abolition of

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textile quotas from 1st January 2005, there isan urgent need to enter into joint ventureswith reputed foreign companies, especially in

the garments sector. Three Garment Cities inKarachi, Lahore and Faisalabad will beestablished. These Garment Cities will beowned and operated by corporate entities inwhich GOP, multilateral institutions and thestakeholders would be equity partners. TheCommercial Banks will be encouraged to

arrange financing under the SBP prudentialregulations at 6 months treasury bills rate plus2%. These cities will be provided infrastructureincluding sheds and will provide one windowfacility for the SMEs. The SMEs would only befor value added finished textile products. Thesecities will serve as the trend setters.

Strengthening Pakistan?s Trade Diplomacy.

Commercial representatives abroad are vital toeffective export development and tradediplomacy. Regional Trade Commissioners willbe appointed for the six regions, namely, TheAmericas, European Union, Africa, Far East,

Middle East and Central Asia. They will beguiding the country representatives in thepromotion of exports.

IMPORT TRADE REGIME

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Pakistan, being a developing country, ispursuing policies directed towards rapideconomic uplift of the country. Accordingly,

emphasis of Import Trade Regime has been onstimulation and acceleration of industrialdevelopment with special emphasis on exportoriented, and high tech industrialization as wellas modernization of agriculture sector forcreating employment opportunities with theultimate objective of achieving higher standard

of living for the people of Pakistan in Pakistan

The Import Trade Regime of Pakistan,therefore aims at:

i. un-interrupted supply of adequate rawmaterials to the industries;

ii. facilitating liberal import of machinery for

industrial development;iii. availability of essential commodities for the

general consumers;iv. providing a measure of competition to the

informal channel;v. facilitating inflow of latest technology into

the country; and

vi. increasing efficiency of the domesticindustry by gradually exposing it to theinternational competition.

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With the above objectives in view and in linewith the export strategy being pursued andalso to meet the post 2004 WTO era, and

conclusion drawn from the trade performanceduring 2002-2003, the following decisions,have been taken in consultations with theTrade and Industry and all concerned Ministries

/ Divisions, Departments and Organizations inorder to further streamline, simplify andliberalize the Import Regime

FACILITATION

Import Against Foreign Currency DemandDraft.

As per current Import Trade & ProceduresOrder a facility has been provided to theimporter to import permissible goods worthUS$ 5,000 in one fiscal year through foreigncurrency demand draft etc., without theopening of letters of credit. Industrial usershowever can import spare parts and machineryworth US$ 30,000 per fiscal year againstforeign currency demand draft, if such importis made by air or courier.

The above ceiling for import against foreigncurrency demand draft will be dispensed withas part of the foreign exchange liberalizationpolicy to facilitate the stakeholders in theintentional trade.

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Import by Actual Users Without Limit

Presently actual users are permitted to importany item/ items provided the total value doesnot exceed US$ 5000 in one fiscal year. It hasbeen decided to do away with the monetaryceiling as part of foreign exchangeliberalization policy.

Import of Goods for Demonstration Purposes

It has been decided to import of goods fordemonstration purposes on import cum exportbasis for a limited period, involving itemspermissible for import, without recourse to theMinistry of Commerce, against submission ofindemnity bond or bank guarantee to thesatisfaction of the Customs Authorities.

Import of Goods for Repairs and Re-exportThereof for Export of Services

Import of goods for repairs and re-exportirrespective of import status will be allowed.For the purpose of repairing and its subsequentre-export, with a view to enhance the export of

engineering services, subject to the submissionof indemnity bond or bank guarantee to theCustoms Authorities to ensure re-export of thesame within the specified period.

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Import-cum-Export of Specialized MachineryMounted On Vehicle By Oil Exploration andConstruction Companies

As per current Import Trade & ProceduresOrder, import of specialized machinerymounted on vehicles/machinery like cranelorries, concrete mixers lorries, mobileconcrete pumps, oil well logging trucks,seismic vibrators, seismic acquisitionequipment, production testing equipment,concrete batching plant, concrete transitmixers etc., are banned for import insecondhand condition. These specializedvehicles / construction machinery/equipmentare required by the Exploration and ProductionCompanies and construction companies forvarious projects in Pakistan.

In order to facilitate the working of Explorationand Production Companies, It has beendecided to allow import cum export of abovemachinery/equipment/specialized vehicles etc.,(excluding super saloon cars, luxury vehiclesand station wagons) on the recommendation of

the Regulatory Authority against submission ofindemnity bond or bank guarantee to theCustom Authorities to ensure re-export of thesame after the completion of the project.

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The same facility will be extended to theconstruction companies working in Pakistan onvarious projects on the recommendations of

the sponsoring government agencies to boostthe construction activities in the country.

Import of Construction Machinery Used AbroadBy Pakistani Companies

Import of used/secondhand machinery will beallowed, irrespective of import status on

completion of overseas project by Pakistanicompanies (excluding super saloon cars, luxuryvehicles and station wagons etc.) providedsuch machinery has actually been purchasedfrom their own foreign exchange earningsabroad, used on the foreign project and profitearned from the project repatriated to Pakistan

through official channels. A certificate from theconcerned Pakistan Mission confirming theactual use of such machinery on the projectwill be submitted to the Customs Authorities atthe time of import.

Introduction of Import Management Service in

EPB.Presently Export Promotion Bureau is designedto provide services to the exporters forpromotion of exports, while there are nospecific services to cater the needs of

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importers. There is an urgent need to createan organization/cell, which would provideguidelines/services to the importers to effect

cost effective imports. On the other handincrease of I% in exports requires lot of effortsinvolving monetary & non-monetary efforts.

It has been decided to introduce importManagement Service in EPB for guidingimporters in effecting cost-effective imports.

Exemption from Sales Tax Registration toConsignee of Goods sent By Overseas Pakistanis.

Overseas Pakistani are allowed to send goodswhich are permitted for import from their ownforeign exchange earnings abroad withoutinvolvement of Letters of Credits.

In order to facilitate the clearance of abovegoods in Pakistan, the consignees will be givenExemption from Sales Tax Registration. Theclearance of these goods will however beallowed subject to the production of an earningcertificate from the Trade Officer of therespective Pakistan Mission. In case there is noTrade Officer in the foreign Mission, anydesignated officer of the Mission may issuesuch a certificate.

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LIBERALIZATION

Import of Secondhand Electro MedicalEquipment.

Presently Import Trade and Procedures Orderallow import of secondhand or used medicalequipment dialysis machines, reverse osmosisequipment and other similar electro medicalequipment not older than 5 years old.

To facilitate availability of such equipment at

cheaper prices, this facility will be extended tothe Overseas returning Pakistani doctors underTransfer of Residence Scheme.

Allowing Import of Secondhand Forklift TrucksAbove 5 Tons Capacity

Secondhand /used forklift trucks irrespective of

weighing capacity are banned for import insecondhand condition. These trucks arecommonly used in many industrial unit forloading and unloading of goods within theindustrial premises. On confirmation from theEDB that forklift above 5 tons are notmanufactured locally.

Import of used fork lift trucks above 5 tonscapacity will now be allowed.

Import Secondhand Boilers By IndustrialConsumers

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As per current Import Trade and ProceduresOrder, import of secondhand boiler is notallowed. It has been the consistent demand of

the industry to allow import of used boilers, asthe new boilers are very expensive.

Import of boilers not older than 5 years will beallowed to industrial consumers only subject toprior approval of Chief Inspector of Boilers toensure that the said boiler is fit for industrialuse and is not life hazardous.

Import of Used Agricultural Spraying Machinery,Spraying Lorries/Sprinklers

As per current Import Trade and ProceduresOrder certain used, Agricultural Machinery likespray guns and other appliances for dispersing

or spraying liquids or powders, sprayinglorries/sprinklers etc., are banned for import inused condition.

Import of agricultural machinery mentionedabove will be allowed for development ofagriculture sector.

Addition of Recently Developed AISI-200 Series ofStainless Steel to Importable List.

Presently import of waste, seconds, andcuttings of stainless steel sheets and plates of

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AISI-300 and A1SI-400 series are importable.The manufacturers have approached thisMinistry to allow import of AISI-200 series

stainless steel sheets and plates recentlydeveloped by USA for use in variouscomponents of foods, utensils, surgical,swords, knife and cutlery industry.

It has been decided to add AISI-200 series inthe list of importable items also.

Allowing Import of Used Lab, surveyingEquipment.

Currently used instruments and equipment forlaboratory, surveying and other purposes arebanned for import. New apparatus/equipmentare expensive and are also not manufactured

locally.After consulting Ministry of Industries &Production and Engineering DevelopmentBoard, import of these equipment will beallowed used for laboratory, surveying andother purposes.

STREAMLINING AND SIMPLIFICATION OF THEPROCEDURES Import of Seeds, Plants etc UnderCertification of Department PlantProtection/Federal Seed Certification Agency

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In order to ensure freedom frompests/diseases, import of sugar cane seeds,banana and suckers, vegetable seeds, seed

potatoes, flower seeds and other field cropsseeds including tubers, rhizomes, etc. will beallowed subject to drawing of seeds samplesand testing quality by the Department of PlantProtection, besides the Federal SeedCertification Agency.

Import will be allowed of all species of plantsand parts thereof whether living or dead,stems, branches, tubers, bulbs, corms, stock,bud-wood, layers, slips, suckers, green scumon stagnant pool, leaves fruits etc., subject todrawing of seeds samples and testing qualityby the Department of Plant Protection and bythe Federal Seed Certificate Agency.

Import of Pesticides etc.

Presently import of insecticides, rodenticides,fungicides, disinfectants etc., is importable inaccordance with the provisions of theAgricultural Pesticides Ordinance 1971. The

said ordinance has been amended throughAmendment Act 1992 and Amendment Act1997.

The provision in the IT&PO will be amendedaccordingly.

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Import of Chemical Precursors, Ephedrine,Pseudoephedrine, Ergometrine and NarcoticsDrugs

Presently import of chemical precursors havingdual uses like acetone and propanone, aceticanhydride, acetyl chloride etc., are importableby the concerned industrial consumers whohave been cleared by the Narcotics ControlDivision. Maximum quantity importable by anindustrial unit in one year is determined by theCBR. Import of these chemicals will be allowedon their recommendation as well besidesNarcotics Control Division and CBR.

The provision in the Import Trade & ProceduresOrder will be amended accordingly.

Import of Ephedrine, Pseudoephedrine,Ergomentrine etc. will be allowed, to theconcerned industrial consumer also on theirrecommendation, as these drugs areinternationally controlled substances and arerequired to be regulated through issuance ofimport authorization. The licences

manufacturers cannot be allowed to importthese materials without quantitative restriction.Presently these chemicals are importable byonly those pharmaceutical units having drugsmanufacturing licence.

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The Import Trade & Procedures Order will beamended accordingly.

Presently import of all narcotics drugs andsubstances are importable by only thosepharmaceutical units having valid drugsmanufacturing licence. Import of the same willbe made on the recommendation of Ministry ofhealth as these drugs are internationallycontrol substances and are required to beregulated through the issuance of importauthorization. The licences pharmaceuticalmanufactures cannot be allowed to importthese materials without quantitative restriction.

Import Trade & Procedures Order will beamended accordingly.

Import of Arsenic Compound by Industrial UsersOnly.

According to International Agency of Researchin Cancer (IARC) Arsenic and Arseniccompounds are carcinogenic US EPA hasclassified Arsenic compounds viz-arsenicdisulfide arsenic pent oxide, arsenic trichloride,arsenic triodide and arsenic trisulfide ashazardous substances.

In order to monitor and regulate the import ofArsenic and Arsenic compounds, the import of

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Arsenic and Arsenic compounds will berestricted to concern industrial consumers whohave valid licenses issued by the concerned

EPAs/EPD under PEPA 1997.

Banning import of other CFC based refrigeratingequipment

In compliance with the conditions of MontrealProtocol Agreement of which the governmentof Pakistan is also one of the signatory, import

of CFC based refrigerators and deep freezerswas disallowed in the last year?s Trade Policy.

Introduction of INCOTERMs

INCOTERMs, will be introduced according tothe practice of International Chamber ofCommerce, in import-export business/laws for

global integration.

Ladies and Gentlemen,

I shall conclude by saying that we haveunfolded the blueprint for our businesscommunity to put Pakistan firmly on the pathto economic progress. We have to worktogether, private sector as field players andprimary achievers; public sector as facilitators.With this combination, the day is not far when

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Pakistan will, Inshallah, be a force to reckonwith in the world of trade and commerce.

Pakistan Paaindabad