ISLAMABAD (APP) - Following are the hilights of Trade Policy 2009-12 announced by Federal Minister for Commerce Makhdoom Amin Fahim on Monday. Trade Policy 2009-12 aims to set the country on the path of sustainable high economic growth through exports. The fundamental principles of the Strategic Trade Policy Framework are rooted in the manifesto of Pakistan Peoples Party. As guided by the Prime Minister and his cabinet, the policy is geared towards contributing towards poverty alleviation, achieving export led growth and providing relief to the common man through the provision of jobs and services, will focus strongly on development and facilitation. The policy is set in a three years Strategic Trade Policy Framework (STPF) for the next 3 years. This will be a medium term road-map in order to ensure certainty of policies which in turn will act as a catalyst in the revival of domestic commerce and international trade in Pakistan, with the precise objective of bringing about a structural transformation in Pakistans exports. As far as the enhancement of the export competitiveness is concerned, the government aims to: First, overcome the most pressing supply-side constraints such as the shortage of energy, cost of capital and difficulties linked with adverse travel advisories. Second, enhance competitiveness of textile and clothing, with the help of Textile Policy due to be announced shortly which focuses on new investments, modernization of machinery and increasing total factor productivity. Third, deepen and diversify export markets particularly our major trading partners US and EU as well as countries with which Pakistan has signed a free trade agreement such as China, Malaysia and Sri Lanka. Fourth, promote trade in services which globally have a more stable demand pattern and are less prone to detrimental external shocks seen for the case of commodity trading. Fifth, embark on domestic commerce reform and development where key areas such as wholesale and retail trade, storage and warehousing, transport, regulatory environment, promotion of modern business and taxation practices require immediate attention. The government aims to integrate the local productive capacity with globally integrated supply chain. Coordinate and leverage the skill up-gradation programmes in the priority sectors and strengthen the institutions entrusted with the skilling. In this regards, skilling of women workers would be given special importance. Acquire and upgrade technology level so that Pakistan can move away from the traditional and low value export products. Promote enterprise and entrepreneurship development. The Ministry of Commerce proposes to set up an Enterprise and Entrepreneur Fund [EEF] for incentivising the improvements in firm management capabilities in ten sectors chosen to push Pakistan higher on the sophistication ladder. Rationalize the tariff policy keeping in view the structure of value addition in various industries. In order to address our strategic objective of product diversification for Pakistans exports the government aims to: Provide a clear policy framework on the development of chemical sector. Continue the successful initiatives provided to the Pharmaceuticals sector in the previous trade policy and help introduce necessary regulatory and initiate new development programmes. Address the supply side constraints in the meat and meat products industry Facilitate the foreign direct investment and export potential of mineral sector. Promote agro-processed exports Support the light engineering sectors to export more in high paying markets. The trade policy aims to create a special fund of Rs 2.5 billion for product development and marketing in order to increase the sophistication level of the sector and realize true potential of this sector. Devise a medium term strategy to boost exports of gems and jewellery. Devise a comprehensive long term strategy for significantly improving Pakistans export of services. Provide incentives to facilitate technology acquisition, adoption, replacement with the twin objectives of energy efficiency and environmental protection. To launch a comprehensive Leather and leather products export Plan in consultation with the major players of leather sector. To launch a comprehensive plan for the promotion of export of Services. In order to address our strategic objective of pursuing greater market access through extensive trade diplomacy the government aims to: Actively participate in the Doha Development Agenda negotiations in order to maximize the gains from trade diplomacy. Making free trade agreements a success in terms of increase in bilateral and regional export volumes with favourable terms of trade for Pakistan. Engage with the larger trading partners like US and EU for greater market access and utilize the Reconstruction Opportunity Zones for providing zero duty facility for exports to US. Strengthen and utilize the trade officers better for the protection and promotion of Pakistans commercial interest abroad. Ladies and gentlemen, In order to address our objective of institutional reform for prudent implementation of Strategic Trade Policy Framework the Ministry of commerce would take the following measures: Employ the modern logical frameworks to implement and evaluate different interventions and initiatives of the Strategic Trade Policy Framework and establish 3 Implementation Management Units. Set up an Export Investment Support Fund to channelise the public investments to the selected sectors with clear objective of effecting the structural transformation. The Ministry would ensure significant improvements in its own working as well as in the working of Transport and Trade Facilitation Project, Trade Development Authority of Pakistan, National Tariff Commission, Pakistan Institute of Trade and Development, Pakistan Horticulture and Export Development Board, Directorate General of Trade Organizations, Trade Offices Abroad and other relevant organizations. The Ministry would establish efficient steering and coordination mechanisms that make the functional linkages between the Structural Trade Policy Framework with the Planning process in Pakistan and relevant line and sectoral ministries The Ministry would lead from the front in shaping much more effective Public-Private dialogue in the realization of the Objectives of the Strategic Trade Policy Framework. Pakistan Institute of Trade and Development Islamabad would undertake a systematic evaluation of the impact of Trade Policy 2009-12 on the trade performance of Pakistan with a view to enhance the effectiveness of different trade policy interventions, suggest course corrections and lay the scientific foundations for the preparatory work for the next Trade Policy. Trade Policy Framework would have a brief time lag before coming into full force. The Ministry therefore has set the export growth target of 6 % for 2009-10 and 10 and 13 % for each of the successive years. The Ministry for the first time is introducing a few intermediate indicators, which contribute to the enhancement of export competitiveness. It is expected that by 2012 the competitiveness ranking of Pakistan will improve from 101 to 75; the share of engineering exports will increase from 1.5 % to 5 %; value addition of cotton to increase from US $ 1000 to $ 1500 per bale; and regional trade to expand from 17 to 25 %. The Strategic Trade Policy Framework sets out the policy guidelines and identifies the principle action areas. The ministry hopes to complete the work on identifying the business processes to improve within the first quarter of the financial year and address them forthwith. For the realization of other strategic objectives it hopes to take the stock of the on ground situation and propose the activities which would start rolling out within the second quarter. The activities and programs thus started would be completed by June 2012. It has been decided to create a fund to hedge mark-up rate hikes. The Ministry will work with the Ministry of Finance and State Bank of Pakistan towards this end. In order to ensure predictability of electricity supply it has been decided that Ministry of Water and Power would work with the Electricity Distribution Companies, to enter into agreements with clusters of industries whereby electricity is supplied at mutually agreed times. It has been learnt that apart from travel advisories that stop the purchasers and importers from coming to Pakistan, the insurance companies refuse to cover the period of stay in Pakistan on usual rate of premium. To overcome this problem, it has been decided to launch a scheme for picking up the full cover for Pakistan for their valid insurance policies. The scheme will be funded from Export Investment Support Fund and managed by National Insurance Corporation. In the short run, the ministry is introducing many sector specific initiatives to promote product diversification, which are as follows. Extra cost on inland transportation erodes export competitiveness of a range of developmental products. It has been decided that a scheme may be launched to compensate inland freight cost to exporters of cement, light engineering, leather garments, furniture, soda ash, hydrogen peroxide, sanitary wares including tiles, finished marble/ granite/ onyx products. All final use products do require continuous research and development for enhancing competitiveness either by technology up-gradation, skill development or by improved management systems. A fund dedicated to support named Technology, Skill and Management Up-gradation Fund of Rs. 3 billion is being established for the purpose. It has been decided that surgical instruments, sports goods & cutlery sector would be granted 25% support on brand development activities. It has been decided to establish a center of excellence for catering to the training, designing, research & development needs of surgical instrument sector at Sialkot. In order to increase the sophistication level and realize true potential of Engineering Sector, a special Fund of Rs 2.5 Billion is being created for product development & marketing for light engineering sector. The Leather sector would be able to avail the following facilities from the Export Investment Support Fund: * Procurement of expert advisory services to leather apparel manufacturers cum exporters. * Matching grant to establish design studios or design centers in the factories. * Establishment of Research &Development Centers in Karachi and Sialkot by Pakistan Leather Garments Manufacturers and Exporters Associations for providing Research & Development support to Leather Garments & Leather Goods Exporters. It has been decided that Export Investment Support Fund may be used for providing matching grants to district governments for installing flaying machines. To provide a foundation for sustainable growth, various initiatives are being planned through a separate and first ever Textiles Policy, to be announced shortly. The major thrust of the Textiles Policy will be to enhance domestic capabilities and capacities for efficient use of resources through skills development, technology up gradation and provision of infrastructural facilities. Measures are also envisaged for diversification of fiber usage and mix. The Ministry of Commerce would lend its support to the Ministry of Textiles towards an efficient implementation of Textile Policy. It has been decided to grant 25% freight subsidy if live seafood products are exported by air. This will also compensate exporters to overcome losses incurred due to mortality. The government plans to give a big boost to agro-processing due to its potential to reduce poverty in the country side. It has been decided to support processed food exports initially by reimbursing Research &Development costs @ 6% of the exports. The quantum and mode of support for 2009-12 would be decided after a detailed study but not later than May 2010. A Services Export Development Fund will be set up to provide assistance in the form of reimbursable grants, to Pakistan service exporters for Tenderingor negotiating for international projects and for conducting pre-feasibility or feasibility studies for international projects. It has been decided that till the Halal Certification Board is setup, the government would support the cost of Certification by 50%. In the coming year, the Ministry will develop a comprehensive policy for the promotion of Halal products. It has been decided that 50% cost of UL certification would be borne by the government. The government has decided to make the exports completely zero rated. It has been decided to give an interim relief to the sectors of tents & canvas, electric machinery, carpets, rugs and mats, sports goods, footwear, surgical, medical, veterinary, beauty care instruments, cutlery, onyx products, electric fans, furniture, auto parts, handicrafts, jewellery and pharmaceutical. All incentives will be linked to the outcomes, efficiency standards and wherever possible, productivity targets. In order to reduce the cost of doing business in Pakistan significantly, following oil and gas and petroleum sector companies are allowed import of second hand plant and machinery equipment required for their project in Pakistan subject to pre-shipment certification to the effect that such plant, machinery and equipment are in good working condition and are not older than 10 years. Since drilling rigs usually have a useful life of around 20 years it has been decided that the age limit for them may be enhanced to 20 years subject to Pre Shipment Inspection certification. It has been decided to allow the import of specialized machinery and transport equipment by actual users in used condition provided they fulfil emission standards and have sufficient productive life irrespective of the age. It has also been decided to allow Industrial importers to import new, refurbished and upgraded machinery on the basis of trade-in with their old, obsolete machinery. Likewise export of their old and obsolete machinery for trade in with new, refurbished or upgraded machinery would also be allowed. The facility to remit US$ 10,000 per invoice, as advance payment, for import of spare parts, consumables and raw materials would be restored by State Bank of Pakistan. Limit for physicians samples may be enhanced to 20% from the current limit 10% at the time of launch with first shipment. Engineering units would be allowed Export Oriented Units facility on export of 50% of their production for the first three years. After that, the engineering units would be allowed this facility on export of 80% of their production. For promoting countrys exports under its Strategic Trade Policy Framework, ,the successful existing initiatives will be continued. These include: Support for opening exporters offices and retail sales outlets abroad. Support for the warehousing scheme would be continued and its scope would be expanded to include traditional markets and traditional products. The government is supporting various quality, environmental and social certifications. The scope of this Scheme would be expanded by Trade Development Authority of Pakistan in consultation with the Industry. On the import side, several regulatory issues require immediate attention. For addressing these issues the government is taking following measures: In order to encourage use of computers by low income groups, it has been decided to allow the import of old & used computer components. It has been decided to disallow the import of Cathode Ray Tubes monitors unless imported along with used computers. To encourage local manufacturing, import of vaccines would be restricted only from World Health Organization approved plants. Import of used ambulances that fulfil certifiable standards and have minimum 10 years of useful life would be allowed when donated by any organization or individual to charitable or non-profit organization, trusts or hospitals. To facilitate disabled persons to actively participate in economic activities, the facility to import duty free customized cars, not above 1350cc of engine capacity is being allowed. To facilitate disabled persons further, it has been decided to allow the import of one used duty free motorized wheel chair to actual users. The vehicle imported by a overseas Pakistani, under Transfer of Residence rules, may be released to legal heir in case of his or her death.