18/12/2012 (Business Recorder) - The Strategic Trade Policy Framework 2012-2015 is expected to be announced by the Commerce Minister very soon. It is hoped that this trade policy would help in removing the bottlenecks being faced by the exporters, especially the small businesses, in marketing their products internationally.

The cumbersome procedures involved in the operating business in Pakistan need to be simplified and the system inefficiencies need to be removed if we are to compete in the world market. It is being heard that the government is going to announce the setting up of an EXIM Bank to facilitate export-oriented sectors, besides import sectors involved in value addition for exports of the country in the Trade Policy 2012-15.

The export target which the Trade Policy 2012-15 is expected to set is an average of US $32 billion annually ie a total of US $95 billion for three year period. This target seems quite ambitious, keeping in view the above discouraging export performance. Secondly, the economic crisis that our businesses are currently experiencing, including energy shortages, law and order etc are the major hurdles which are hampering any enhancement in the exports.

The US $95 billion export target under Strategic Trade Policy Framework (STPF) 2012-15 has been fixed by the government, keeping in view the possible market access through bilateral and multilateral arrangements, especially the EU Trade Incentive Package, possibility of Generalised System of Preferences (GSP) Plus status. China and Afghanistan would be the main focus of the export strategy. Pakistan has become the second largest exporter to Afghanistan after United States and this year Pakistan's exports have touched $2 billion mark and would grow further.

The trade figures for FY 2011-2012 are not very encouraging and need consistent efforts from both the government and the exporter community. Under STPF 2009-12, the country achieved exports of US $19.29 billion in 2009-10, US $24.82 billion in 2010-11 and US $23.64 billion in 2011-12, respectively. Similarly, the country's imports continued to increase from US $34.17 billion in 2009-10 to US $40.41 billion in 2010-11 and US $44.91 billion in 2011-12, respectively.

The trade deficit of Pakistan has widened by 36.3 percent to US $21.271 billion in FY2011-2012 as compared to US $15.604 billion in FY 2010-2011. Exports have declined by 4.7 percent to US $23.641 billion against US $24.810 billion in the corresponding period last year. On the other side, the Imports have shown an 11.13 percent growth from US $40.414 billion in 2010-11 to US $44.912 billion in 2011-12.

The main reason for low projected export growth is the non-implementation of the trade policy initiatives in the three-yearly Trade Policy Framework 2009-2012. Other reasons are non-release of required funds from the Ministry of Finance and closures of industrial units due to persistent gas and power shortages. Moreover, the government has failed in diversification of export base and in value addition of our exportable products.

The export strategy should focus on reducing cost of doing business, increasing market access, export diversification, technology and skills up-gradation, social, environmental and security compliance and value addition.

New markets or markets with good potential such as China and Malaysia should be explored in the new trade policy. Malaysia and Pakistan have very close relations, however, these bonds need to be further strengthened. Pakistan Malaysia bilateral trade had continued to record positive growth touching US $2.8 billion last year.

Many Malaysian firms are operating in Pakistan in the infrastructure, housing development, highway construction, palm oil, power generation, financial services and telecommunication sectors. It is hoped that the new trade policy for 2012-2015 should also focus on Malaysia which is the second largest trading partner of Malaysia in South East Asia last year. Both the countries should make efforts to take these relations to a new height by aggressively exploring opportunities for joint ventures in various sectors.