ISLAMABAD: The cabinet approved the Strategic Trade Policy Framework 2020-25 on Tuesday after a delay of more than two years.
The framework contemplates measures to strengthen the ability of companies to produce, distribute and sell products more efficiently than their competitors.
This is the fourth strategic framework announced since 2009 by the government which has allocated 45 billion rupees for its implementation over the next five years by providing subsidies and other support to the non-textile sectors.
Unlike past executives, this time the government did not announce an export objective linked to the support provided to the sectors.
The Cabinet does not announce an export target
The cabinet asked the finance division to develop a realistic export target and submit it to the Economic Coordination Committee for approval.
Previously, it had been proposed that the policy would help increase the export target to $ 37 billion by the end of its implementation.
Earlier for 2009-2012, 2012-2015 and 2015-2018, the trade division notified three strategic frameworks, but none of them succeeded in meeting their goals, especially with regard to the targets of export for various reasons. Previous frameworks also failed to change the export paradigm.
The officials said Dawn that the government would soon approve the 2020-25 Textile and Clothing Policy, which is charged with cash subsidies and reduced rates on public services to boost the production and export of value-added textile products.
Support for the textile sector amounts to billions of rupees, particularly through subsidizing the costs of public services.
The cabinet will soon approve a drawback of Local Taxes and Levy payment plan, which is simply a cash subsidy on the country’s export earnings. This will be an additional subsidy for the sector.
The State Bank of Pakistan will also offer significant incentives to entrepreneurs and the program will be part of the textile policy. It is proposed to allocate a significant amount to the Export Finance Program and the Long Term Finance Facility.
The 2020-25 policy framework will mainly focus on geographic and product diversification, reducing manufacturing costs through tariff rationalization, pursuing regional connectivity and the Look Africa policy, improving access to market through free trade and preferential trade agreements.
The framework will also focus on facilitating logistics and monitoring under the TIR and improving regional connectivity for access to the Central Asian Republics, Turkey and Iran, through them. to Europe and Russia.
The policy is dynamic in nature and will be subject to course correction on the basis of constant monitoring and evaluation. There will be an institutionalized mechanism for robust policy monitoring and implementation to minimize policy implementation gaps, which have traditionally remained a weak link due to multi-organizational roles in the ecosystem of ‘export.
In order to oversee the implementation of the policy, a cross-functional National Export Development Board (NEDB) has already been formed under the chairmanship of the Prime Minister and composed of senior officials from relevant organizations and representatives of the private sector.
Posted in Dawn, le 10 November 2021