Mr. Akhtar Hameed Chadda, Acting-President, Federation of Pakistan Chambers of Commerce and Industry has shown serious concern over the Trade Policy 2009-12. He said that the present trade policy seems a 'medium term policy framework' for the next three years; which is a task should be performed by the Planning Commission- not by the Ministry of Commerce. Ministry of Commerce is responsible to promote Pakistan external trade activities and remove the barriers in the trade including diplomatic and procedural impediments.

He mentioned that by and large the present trade policy is based on the improvement in 'Trade Competitiveness'. It was mentioned in the trade policy speech that Pakistan competitiveness ranking which was dropped at 101 from 92 would be improved by present trade policy, and Pakistan will be placed at 75th rank by implementation of the recent trade policy measures.

It is noteworthy that World Economic Forum (WEF) ranks the trade competitiveness and according to WEF methodology, the competitiveness index are composed on the basis of 12 pillars: Institutions, Infrastructure, macro economy, health and primary education, higher education, training, goods market efficiency, labor market efficiency, financial market sophistication, technological readiness, market size, business sophistication, and innovation. These 12 pillars are used to construct the 'competitiveness index'. Macroeconomic stability, innovations, knowledge creating activities, technology readiness, and governance of the corporate and political institutions are the determinants of the trade competitiveness. Surprisingly, these primary reasons have not been addressed in the trade policy and a big jump in the targets was assumed without a realistic approach. It makes vague the trade policy measures.

Mr. Akhtar Hameed Chadda, Acting-President, also pointed out that most important aspect is the ignorance of cost competitiveness. Several measures to reduce the cost of business were recommended by the Federation Pakistan Chambers of Commerce (FPCCI). Only a few policy measures were properly incorporated. Zero rating exports in real sense, relaxation of time in EFS part 1, freight subsidies and fiscal measures and facilitation for leather, engineering and services sectors are appropriate measures, but major contributors of the foreign exchange earnings have been badly ignored in the policy.

The policy has envisaged an export growth of 6 percent (18.8 billion dollars) for 2009-10, 10 percent (20.7 billion dollars) for 2010-11, and 13 percent (23.4 billion dollars) for 2011-12. The most astonishing aspect of the issue is that even after achieving these targets - which are not greater than historical growth rates- we cannot reduce trade deficit.

The problems of foreign exchange reserves, higher trade deficit, and consequently low investment, unemployment and low GDP growth will remain continue. It is second time that import targets were not mentioned in the trade policy. The measures to improve local base of industry have not been taken.

He also added that the solutions for energy crises, discouragement of the import of luxuries goods, improvement in the quality and productivity of local products have not been properly identified. In the light of these policy flaws, it is expected that trade deficit would further increased. Trade policy has also indicated that share of regional trade will be grown from 17 percent to 25 percent, however, causality is missing.

Mr. Akhtar Hameed Chadda further said that no policy measures were taken for the growth and development of textile industry; even its crises like situation which require immediate measures have not been addressed. It was announced that the long-waiting 'Textile Policy' will be announced separately. It is notable that textile industry is waiting for a relief package since last two years, but government has been mentioning again and again that this package (or policy) would be announced shortly.