The Dawn

Reduce the tariffs on Pakistani textile imports. Pakistan pays more tarrif than France or even China on textile exported to the US. Why is Pakistan being penalized?

 ‘We raise the same tariff revenue from Pakistan’s $3.7bn in exports to the US as from France’s $37bn in textile exports to the US. The average US tariff rate on Chinese exports to the US is three per cent, compared to 10 per cent on Pakistani exports.’ Pakistan Policy Working Group highlighted the tariff issue:

Pakistan has faced a loss of $20 Billion per year as a result of the US wars in Afghanistan. Pakistan needs a break and an even playing field. Pakistan textiles are overtaxed in the US. This discrimination must end.

Noticias de Rupia | Nouvelles de Roupie | Rupiennachrichten | новости рупии | 卢比新闻 | Roepienieuws | Rupi Nyheter | ルピーニュース | Notizie di Rupia | PAKISTAN LEDGER | پاکستاني کھاتا | Moin Ansari | معین آنصآرّی | DefensebriefsIntellibriefs Translate to: RSS feed: | RUPEE NEWS |  Updated April 9th, 2009 | Moin Ansari| معین آنصآرّی | اخبار روپیہ | There are solutions to the Afghan quagmire. The American presidential team  is not discussing the real long term solutions to the issues relating to the generation poverty in SouthAsia. Pakistan has been asking for an Free Trade Agreement (FTA) withthe USA for a decade. Jordan and Egypt enjoy FTAor their equivalents with America and have been able to use the low tariffs to export their products to America. Pakistan’s FTA has been blocked by the Textile growing states of the USA because stalwarts like Jesse Helms believed that imports from Pakistan would jeopardise the economy of the Carolinas.  Trade First not Aid First for Pakistan: FTA would reduce terror

The best way America can help Pakistan is to put people to work. And the best way to do this would be to give duty-free treatment to Pakistan’s clothing, leather and textile industries.

In earlier decades, Southeast Asia and Central America used labor-intensive exports to create jobs, promote economic growth and defang radicals. Pakistan should be able to do the same. Though it is a small exporter, it has an efficient textile industry. Household linens earn most of the hard currency Pakistan uses to buy food and fuel, and are good job creators – each container full of towels puts 500 urban residents to work.

Today, though, American trade policy hurts these industries more than it helps. Tariffs on Pakistan’s goods are far above those imposed on products from affluent countries. To choose a simple example: Pakistan’s towels and T-shirts trigger 7.5 percent and 19 percent tariffs, while tariffs on Sweden’s cars and airplane parts are only 2.5 percent and zero. So last year, Pakistan’s $3.6 billion in goods exported to the U.S. faced a $365 million tariff penalty – almost three times the $142 million penalty on Sweden’s $13 billion. Why this perverse outcome? Lobbying campaigns have kept U.S. tariffs on the textiles Pakistan makes much higher than our tariffs on rich-country goods. To make matters worse, our exemption of most African and Latin American towels and shirts from tariffs puts Pakistan at a disadvantage against its direct competitors.

The logical step is to give Pakistan a break. Waiving tariffs on Pakistan’s millions of towels and shirts – and soccer balls and everything else it makes – could boost urban employment, help Pakistan’s government cool the political temperature, and thus help the new democratic system succeed.

Retail politics has blocked such a step until now. Fear of Pakistani competition in textiles, augmented by industry lobbying, stopped the Bush administration from pushing a tariff waiver in 2001 on the grounds that Congress would never go along. But as one-time congressional staffers, we think this sells Congress short. When a grave national security interest is at stake, Congress usually responds. We think it would do so again.

Shifting support for Pakistan from “aid first” to “trade first” would require leadership from the White House and support from Democrats. But given the dangers – for Pakistanis, Afghans, Americans and others – should Pakistan fail, the Bush administration should use its remaining time in office to take on this fight. Robert M. Hathaway is Asia program director at the Woodrow Wilson International Center for Scholars. His e-mail is robert.hathaway@wilsoncenter.org. Edward Gresseris director of trade and global markets at the Progressive Policy Institute. His e-mail is egresser@ppionline.org.

The US has a credibility problem in Pakistan. It can be solved and dramatic gains can be made witha few simple steps. The drones have to stop bombing villages in Pakistan. Pakistani energy needs should be taken care of and Islamabad should get preferentialtreatment in terms of trade.

about 80 percent of Pakistanis recently polled said that al Qaeda’s principle aim is standing up to the United States, and 57 percent support that goal. In that same survey, more than 52 percent blamed the United States for the violence wracking the country, compared to 15 percent who blamed various militant groups. Fewer than one in two Pakistanis believed that al Qaedaand the Taliban operating in Pakistan pose a serious problem, and wideswaths of Pakistanis embrace negotiating with the raft of militant groups savaging their country and oppose military action to eliminate them.

This will require a significant change in policy from what has been pursued over the last seven years. This new course must focus more resources and attention to rebuilding and professionalizing Pakistan’s civilian institutions including the police and justice systems, the federal and provincial assemblies, and the political parties while undertaking efforts to encourage civilian control over the military and intelligence agencies. Pakistan, and its citizens, must be a partner for change not merely objects of policy if such an approach is to succeed in any measure.C. Christine Fair. Time for Sober Realism: Renegotiating Relations with Pakistan 

• Pakistan seeking market access, not cash from US, EU: Tareen
• Other international lenders, Friends of Pakistan forum are a priority

If the US is serious about fighting terror and eliminating extremism, it has to begin looking at the long term solutions. The construction Opportunity Zones (ROZs) are stuck in American Congressional limbo. There is some hope that these may actually materialize in 2010. The US Textile industry has resisted allowing tariff free Pakistani textile imports. Pakistan pays more tariffs than Sweden. If the US lifted the tariffs on Pakistani textiles this would funnel $15 Billion into the hands of the textile owners and their employees. The EU has started to become aware of the solutions. The first EU-Pakistan summit is going to be held soon.

LAHORE: The Ambassador of European Commission, Jan De KOK, has said that European Union is considering seriously broadening and deepening its traderelations with Pakistan. The Ambassador was speaking at Lahore Chamber of Commerce and Industry on Thursday. LCCI President Mian Muzaffar Ali, Senior Vice Tahir Javaid Malik and Vice President Irfan Iqbal Sheikhand a number of executive Committee members also spoke on the occasion. The Ambassador said that for the first time ever, Pakistan-EU summit is going to take place on June 17, 2009, in Brussels to discuss the issue of trade with Pakistan. He said that President of Pakistan, Asif Ali Zardariwill be presiding over the summit from Pakistan sidewhile the European side would be represented by Czech Republic that holds the rotating Presidency of European Union and most likely Sweden that is going to take charge of the EU Presidency on 1st July, 2009, would also be there to ensure continuity in policies formulated at the summit. Staff report Daily Times. EU considering broadening trade ties with Pakistan’

Most the aid sent to Pakistan stays in the US. Its a racket to help the consulting industry in America.

The IMF, the World Bank, the Asian Development Bank, the IFC, and the dozens of donor agencies sitting in Islamabad, all share the blame for throwing money at consultants, reports, presentations, and trainings which have impacted the lives of very few people in any tangible manner. Of course they have been brilliant for the “development” industry in Islamabad. Had the aid given to Pakistan over the years been used properly for the people it was intended for, this country and its social indicators would have been completely different. Aid is also a very funny thing. It implies that it is money which has been “given” to a country. This can be misleading. Aid can come in the shape of a grant, a loan and, of course, expertise. More often than not there are several conditions attached to every programme. For instance, if there is a grant to buy wheat from USAID, Pakistan can only buy wheat from the United States at a predetermined rate, and not from the international market where rates can be negotiated. This takes care of surplus production from US farmers. The wheat will only be shipped on US ships, insured by US companies, etc. If the DFID, which is the British equivalent of USAID, puts fortha “development” programme, then only British consultants will be used and they can subcontract to local consultants, etc. The gravy train starts right at the beginning. Joseph Stiglitz, a former World Bank chief economist and author of several excellent books, has gone through this entire process in several of his writings and narrates how he left the World Bank in disgust eventually.No thank you, we’re Pakistani, Hit and run, Saturday, April 11, 2009, Shakir Husain

Pakistan’s new Finance Minister Mr. Tareen is invisible and no where to be seen. Some brilliant men seem to know what they are talking about. Who are they? Dar and Tareen seem to be missing.  Does the PPPP have a plan to deal with the Pakistani crisis?

Experts also say there are serious problems with the way U.S. aid is disbursed. A large portion of development assistance is spent on international consultants and overhead costs, which the new U.S. strategy acknowledges. Some analysts, including the RAND Corporation’s C. Christine Fair, say that the United States pursues a policy of supply-driven aid (Washington Quarterly)that measures output, such as schools built, rather than services delivered, such as quality of education. This observation is disputed by Charles North, a senior official for the region at USAID, in a CFR.org podcast. 

Islamabad seeks $30 billion (Reuters) in aid and investment over the next ten years as its April 17 donor conference in Tokyo approaches. A new report by the Asia Society estimates that aid to the tune of $50 billion over the next five years (PDF) may be required to halt the country’s economic deterioration, a sum that would require donations from multiple countries.

There’s also been a push for enhancing economic opportunities inside Pakistan through trade. The U.S. Chamber of Commerce and the U.S.-Pakistan Business Council view expanded bilateral economic cooperation (PDF) as an essential component to achieving security goals for both countries. The United States is Pakistan’s largest investor and trading partner; however, U.S. tariffs on Pakistan’s textiles (over 50 percent of the country’s total global exports) undermine its ability to compete in the U.S. market. A 2001 billto ease textile trade with Pakistan never passed. Reducing tariffs might be even more difficult in the current global economic crisis. CFR Senior Fellow Isobel Coleman told CFR.org that by being closed on the trade front, the United States is punishing the same poor, rural populations in Pakistan that it is trying to help through development aid. “It should be viewed in totality,” she said. CFR

The logical step is to give Pakistan a break. Waiving tariffs on Pakistan’s millions of towels and shirts – and soccer balls and everything else it makes – could boost urban employment, help Pakistan’s government cool the political temperature, and thus help the new democratic system succeed

From CFR Experts: “USAID should begin a process of transitioning from the use of ‘implementing partners’ (contractors and grantees) to direct-hire officers in order to manage programs, build USAID’s institutional memory and expertise, and demonstrate staying power to Pakistani partners. If necessary, Congress should pass legislation to facilitate these changes, specific to the Pakistan-Afghanistan context.” Council on Foreign Relations(CFR). 

$15 Billion flowing directly into the Pakistani economy would dramatically change the war on terror. Thomas Friedman wrote about this years ago in the New York Times. It was one of the few times when Friedman wrote about something of substance and was right.

1) Pakistan needs a Marshall Plan– $100 Billion to compensate for the loss of revenue because of the two Afghan wars.

2) With a strict restructuring plan Pakistan will be able to get a few  Billion from the World Bank,  the ADB and the Islamic bank.

3) The additional 30 Billion should be garnished from friends of Pakistan.

4) Saudi Arabia should continue to help with the Oil facility.

Regarding the Saudioil facility, he said it was “very much on – its quantum and modalities of its supply would be discussed during the Friends of Pakistan meeting scheduled next month in Abu Dhabi”.

5) Pakistan will ask the “Friends of Pakistan” for market access so that Pakistani textiles and other products could be sold to the USA and Europe.

By Sajid ChaudhryISLAMABAD: sought help with enhanced market access, free trade agreements, securitisation of remittances and oil facilities, Financial Adviser Shaukat Tareen said on Thursday.

“Our demand from the United States and the European Union is …to give us market access for enhanced exports through inking free trade agreements,” he told reporters at a briefing. “We cannot force anybody to give us cash. The Friends of Pakistan [forum] has shown willingness to support Pakistan,

Noticias de Rupia | Nouvelles de Roupie | Rupiennachrichten | новости рупии | 卢比新闻 | Roepienieuws | Rupi Nyheter | ルピーニュース | Notizie di Rupia | PAKISTAN LEDGER | پاکستاني کھاتا | Moin Ansari | معین آنصآرّی | DefensebriefsIntellibriefs Translate to: RSS feed: | RUPEE NEWS | October 24th, 2008 | Moin Ansari | معین آنصآرّی | اخبار روپیہ |

Trade though remains the best bet if the US really wants to help Pakistan stand on its own feet economically. A report of the Pakistan Policy Working Group last year highlighted the tariff issue: ‘We raise the same tariff revenue from Pakistan’s $3.7bn in exports to the US as from France’s $37bn in textile exports to the US. The average US tariff rate on Chinese exports to the US is three per cent, compared to 10 per cent on Pakistani exports.’ The recently announced textile policy here hopes to raise textile exports to $25bn by 2014, a three-fold rise from present levels.

More access to the US market by lowering the tariff barriers could significantly help achieve that goal. Even with the worst recession in decades gripping the US economy, the fact is that Pakistani textile imports contribute only a fraction to the US market, meaning that there is a great deal of room for growth. The Dawn