Far-reaching import curbs on the cards3 min read

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ISLAMABAD: The Commerce Division is working on proposals that seek to invoke various articles of Geneva-based World Trade Organisation to curtail the rising import bill of the country, an official told Dawn on Saturday.

Two articles — Articles XI and XII of the General Agreement on Tariffs & Trade (GATT), which is one component of the WTO agreements — allow member countries to place import restrictions in case they are facing balance of payment problems.

The division has tasked a team of officials to identify certain tariff lines that could be subject to three types of restrictions. The initial estimates show these measures will help to reduce the overall import bill in the range of $2-2.5bn per annum.

Quantitative restrictions, regulatory duties and other measures being worked on

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Secretary Commerce Younus Dagha, when reached for comment, only said “many options are under discussion, nothing finalised.”

As per one proposal, the division has listed certain tariff lines which will be subject to quantitative restrictions, varying from quotas, import and export licences and other measures. The items to be considered in this list will mostly be those that are locally available.

The second option is to restrict import of all those luxury and non-essential items that are locally manufactured. “This will also give an opportunity to investors for investments in those sectors,” the official said.

Also Read: Trade deficit shrinks as exports grow faster than imports

Another proposal is under consideration to restrict import of second-hand vehicles under the three schemes for overseas Pakistanis. One of them is to reduce the age limit for import of second-hand vehicles, the official said, adding it may also take certain procedural measures to discourage the commercial imports of these vehicles and restrict it only to genuine overseas Pakistanis.

Mobile phone handsets are also on the radar of those drawing up the proposals, imports of which have posted over 19pc growth year-on-year to $848 million in 2017-18. However, the government has failed to curtail the import of mobile phones despite certain measures.

The proposal has a few hurdles to clear before it reaches the cabinet, where the final decision will be taken. The Finance Division is likely to oppose any ban since it will lead to adverse consequences for revenue collection, whether customs duties or sales tax. “We will oppose this move of the Commerce Division,” on official told Dawn, adding such measures will also give negative signals internationally.

PTI-led government is considering a series of measures that seek to impose quantitative restrictions, increase rates of regulatory duties and, in some cases, restrict imports of certain commodities to control the rising import bill of the country.

On the customs side, it has been put forward to enhance further regulatory duties on 1,500 tariff lines. However, the proposal to impose 1pc additional duty across the board on tariff lines has been dropped, a customs officer said.

There is also consideration to reduce regulatory duty on certain tariff lines of raw materials to promote export of those commodities.

Last year, the import of 700 lines declined owing to regulatory duties.

Pakistan’s total import bill reached a record $60.86bn in 2017-18 from $52.9bn in the previous year, reflecting an increase of 15 per cent. Last year, the Commerce Division also took several measures such as proposing regulatory duties as well as qualitative restriction to curb the growing imports. Despite them, the trade deficit reached a historic $37.6bn in 2017-18 from $32.5bn in the previous year.

(This news/article originally appeared in DAWN on September 16th, 2018)

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