Table of contents list of acronyms
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| 7. FOREIGN TRADE The major automotive imports consist of CBU/CKD cars, trucks and tractors. Parts and accessories and motorcycles also account fora significant share of imports. As opposed to this, the base of exports is small and narrow. Japan is traditionally the largest supplier of the range of auto-parts products. Emerging sources are Turkey in tractors, Singapore and Thailand for cars and parts, South Korea in trucks and China in the case of motorcycles. Pakistan has established a small market niche for motorcycles in two SAARC countries, Afghanistan and Bangladesh tractors in African countries like Nigeria and Kenya and for auto-parts in USA and Italy. The imports are controlled by the Import Policy Order 2009 which requires that the EDB certify the level of imports by any manufacturer. This certification allows the importer- manufacturer to avail the preferential rates of customs duty. In effect this is a method of licensing which is against the very essence of the Tariff Based Scheme. In the presence of existing documentation of the authorised level of installed production capacity, there is no justification for such certification. Therefore, this requirement for certification, either directly or indirectly, by the EDB should be removed to encourage greater capacity utilisation, thereby lowering prices and increasing competition. Pakistan’s share in world export trade of automobile products is miniscule. The cited factors constraining the growth of export were the inability to enter the export market, lack of awareness of export possibilities, lack of motivation to export owing to un-competitiveness as a 8 consequence of low levels of production and high level of profits from the domestic market. CEOs identified other factors also. The major ones were firstly, the absence of assistance by the Commercial Counsellor’s attached to Pakistan’s diplomatic missions abroad and the Export Development Fund in identifying opportunities, and lack of skills in performing the task assigned to them secondly, the lost opportunity in accessing technical assistance available from international sources for improving the quality of output and transiting from reverse- engineering processes to more sophisticated processes thirdly, high cost of production as a consequence of low productivity and low rates of capacity utilisation exacerbated by the rapid decline in the Rupee’s exchange convertibility rates was also identified as a major inhibiting factor and fourthly, perhaps the most irritating factor, the delays in refund of domestic and import input taxes paid on exported goods, which impacts on working capital and thus on output through the inability to finance inventory replenishment. Download 0.77 Mb. Share with your friends:
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