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September 17, 2019

Pakistan to seek US RoZs at Pak-Afghan border areas


September 17, 2019

ISLAMABAD: Islamabad will, this time, ask US administration to restore the idea of building up the ROZs (Reconstruction Opportunity Zones) like facilitations at Pakistan-Afghanistan bordering areas.

Apart from it, Pakistan will also suggest US authorities to activate the TIFA (Trade and Investment Framework Agreement) council and then restart process of talks on bilateral investment treaty (BIT), Adviser to Prime Minister on Commerce, Textile, Industry and Production and Investment Abdul Razak Dawood told this to The News in an exclusive interview.

During Musharraf regime, US came with idea of building ROZs on Pakistan-Afghanistan bordering areas to ensure jobs for the people of areas preventing them not to play at the hands of militants, but that idea was mishandled by the then economic ministry as Pakistan had started asking US authorities to build ROZs in developed areas because of which US did not respond positively.

The US had given the ROZs idea in Musharraf regime while keeping in view the model under which bordering areas among Egypt, Jordon and Israel where such facilitations are already built and giving dividends to the people of the said bordering areas.

The adviser who will leave for Washington DC on September 19 and will join entourage of the prime minister in USA said, “Now we will re-float the idea for building the industrial facilities on pattern of earlier proposed model of RoZs at Pakistan-Afghanistan bordering areas to ensure the job opportunities for the youth on both sides of the border.

“From those facilities, the products will be manufactured and exported to US market on zero duty. This will not only help increase the export of both the countries but also ensure jobs on reasonable scale.”

US wants withdrawal of US troops from Afghanistan and after that, if the facilitations like RoZs are built, the youth of the said areas, instead of playing in the hands of subversive elements, will remain in positive activities and earn the livelihood. “This will also ensure peace in war-ravaged country on long-term basis,” he said.

Mr Dawood said, “We want Afghanistan to become industrialised as the prosperous Afghanistan is in the supreme interests of Pakistan.” He also disclosed that Pakistan has decided to open the representative offices of big US business houses such as Walmart, JCPenney, Adidas, Exxonmobile and others to pave way for investment from America in Pakistan and to this effect Islamabad will assure zero taxation and one-year free rent for offices in Pakistan.

The representatives of big business chains in US will remain in contact with Pakistani industrialists in various sectors of economy and will not only provide orders for US but will also invest in Pakistan. The representative offices of the US business houses are already active in Bangladesh and India.

To a question, the adviser said that Pakistan’s exports to US stand at $3.9 billion and imports from US are at $2.6 billion showing the trade surplus of $1.2 billion in favour of Pakistan. However, he said in the same breath that the potential to increase the exports to US stands beyond $5 billion.

However, under US GSP facility, Mr Dawood said, Pakistan exports stand at just $353 million which is not up to the mark and accepted this as Pakistan’s failure as exports under US GSP is at lower side. He said that Pakistan wants US investment in areas of energy, food processing and oil and gas exploration. Exxonmobile is going to install LNG terminal in Pakistan based on private-to-private model.

To a question about China, Mr Dawood said that FTA with China is most likely to be effective in the month of November 2019 and to this effect he himself is very much in touch with the authorities in China. He said in the first 15 days of October he will visit China and will also persuade authorities there to allow Pakistan export of rice and sugar in place of yarn under $1 billion order from Beijing as yarn is being utilised by our textile industry for making garments and value added products.

However, The News also held background interviews with senior officials, which suggest that Pakistan is not able to get any special trade treatment as WTO will strike down immediately. However, when Pakistan was advisedly hit by 2010 flood, EU had extended the one year special trade facility to Pakistan and EU persuaded India, Sri Lanka in that case. They said that US-Pakistan economics and trade ties have never been on bilateral basis rather they have been issue-based. Sometime these ties are linked with invasion of USSR in Afghanistan, then it remained linked with Taliban issue and then fight with militants when Pakistan became frontline state against terrorism. Unfortunately, both countries have not been able to cultivate economic ties purely based on economic strengths of both the countries.

With Bangladesh, Vietnam and India, the USA has economic ties based on bilateral basis. The trade of the said countries with USA shows that Pakistan is too much behind knowing the fact it is in trade surplus of $1.2 billion.

The data available with The News shows that in 2012, Pakistan was in surplus of $2.1 billion in trade with USA. The data also shows that Pakistan in the last one decade is in trade surplus with US. But when it comes to the competing economies in the region such as India, Bangladesh and Vietnam viz-a-viz US trade ties, then the startling disclosures are made according to which India’s export to US stand at $51 billion and India is in surplus of $19 billion with US trade.

However, India’s exports to the whole world stand at $323 billion. India’s exports in last three years have increased by $63 billion to $323 billion. Bangladesh’s exports have increased by $4 billion in one year from $39 billion to $43 billion. In 2016 alone, exports of Bangladesh increased by $6 billion. Bangladesh is in trade surplus of $8 billion with US.

This shows that Pakistan is far behind when compared with regional economies in terms of trade surplus with US and exports to whole world too as Pakistan’s exports stand at $23 billion since long.