ISLAMABAD: After a long period of staying in documents for reviews and consultations, the federal cabinet finally approved the country’s five-year trade policy framework on Tuesday.
Officials who spoke with Profit said the Strategic Trade Policy Framework (STPF) 2020-25 aims to improve the capacity and ability of Pakistani companies to produce, distribute and sell products and services as or more efficiently than their competitors.
As part of the policy, prepared after studying international demand trends and the capacity and capabilities of the country’s different export sectors, various sectors including traditional sectors like textiles and clothing, leather , surgical instruments, sporting goods, carpets, rice, cutlery and development sectors including engineered products such as auto parts, pharmaceuticals, marble and minerals, food and beverage processed, footwear, gems and jewelry, chemicals, meat and poultry, fruit and vegetables, seafood, and the service sector would focus on enhancing exports.
According to officials of the Ministry of Commerce, the new trade policy will focus mainly on geographic and product diversification, reduction of manufacturing costs through tariff rationalization, pursuit of regional connectivity, in particular the Look Africa policy, improving market access through the FTA / PTA. , and the facilitation of logistics and monitoring within the framework of the TIR as well as the improvement of regional connectivity for access from the Central Asian Republics (CARS), Turkey and Iran to Europe and the Russia.
The STPF is dynamic in nature and will be subject to course correction based on constant monitoring and evaluation.
In addition, there must be an institutionalized mechanism for sound policy monitoring and implementation to minimize gaps in policy implementation, which have traditionally remained a weak link due to multi-organizational roles. in the export ecosystem.
In order to oversee the implementation of STPF 2020-25, a cross-functional National Export Development Board (NEDB) has already been formed under the chairmanship of the Prime Minister, made up of senior public sector officials from relevant organizations and representatives of the private sector. Regular meetings of the NEDB are organized to ensure the implementation of various policy measures.
According to sources, the Commerce Ministry is forecasting $ 40.27 billion in exports by 2025 as part of the five-year trade policy. Export projections are based on a robust econometric partial equilibrium model. The explanatory variables used in the model include world GDP, Pakistan’s GDP and the real effective exchange rate, i.e. nominal exchange rate, domestic prices, Pakistan’s export prices and the export prices of competitors.
In addition, three scenarios were constructed to project future exports. The differences between the three scenarios were the domestic prices which reflect the competitiveness and the cost of doing business in the country.
It is assumed that effective government interventions in terms of STPF, national tariff policy, trade facilitation, energy reforms, technology upgrading, easy finance and other ongoing initiatives for ease of doing business (EoDB) will have an impact on competitiveness and thus improve exports. .
Earlier in March, when the trade policy was presented to the Cabinet ECC, it postponed consideration of the summary and ordered the Commerce Ministry to hold further consultations with relevant stakeholders.
During the past decade, the Commerce Division had notified three STPFs: in 2009-12, 2012-15 and 2015-18; however, none of them were successfully implemented to achieve the desired goals for various reasons.
These policies also did not change the export paradigm during the period.