LAHORE - With a view to double exports in next three years to $3 billion, the Prime Minister Raja Pervaiz Ashraf, on recommendations of the Ministry of Commerce, has okayed the formation of Export Promotion Leather Council under Strategic Trade Policy Framework 2012-15, giving leather sector a ‘Priority Status’. The formal approval of this Leather Council, which has been established on the patron of Indian Leather Council, will be given in the upcoming Cabinet Committee meeting.
This was declared by Senior Minister of Commerce Makhdoom Amin Fahim, who was talking to a delegation of Pakistan Tanners Association that met him in Karachi under the leadership of its central chairman Agha Saidain.
Amin Fahim also informed PTA team that accepting demand of industry, Commerce Ministry has also proposed in new three-year Strategic Trade Policy Framework to hand over control of Export Development Surcharge to the commerce ministry, which is presently controlled by the finance ministry.
It is to be noted that government has stopped funding local industry through EDS to participate in international industry fairs. The government collects 0.25 Export Development Surcharge on export, which amounts to about Rs250 million annually.
The minister informed delegation that PM has agreed to transfer total EDS fund to the Ministry of Commerce so that it could be used for the development of exports which is the real purpose of this fund.
On this occasion, Secretary Commerce Munir Qurashi who was also present in the meeting agreed to problems mentions by the Chairman PTA as genuine. He promised that Duty Draw Back Rates pending with Input Output Coefficient Organisation (IOCO) will also be decided very soon. He further said that after formation of Leather Council all the demands of PTA will be addressed.
He further promised that PTA may help MoC to identify people involved in miss-declaration so that they are made example for others. Munir Qurashi advised CEO of TDAP to take into the genuine demands of leather sector and forward a proposal for their solution. The CEO assured the delegation that TDAP will try to solve all genuine problems of leather sector.
Earlier, while giving a presentation to commerce minister, PTA central chairman Agha Saidain explained in detail the problem which leather sector was facing for last five years. He said the growth rate of leather sector of China, India and Bangladesh in last five years was recorded as 46.67pc, 40pc, and 102pc respectively.
He further added that Pakistan is at number two position after Italy as far as quality of leather is concerned and under these circumstances it was not difficult for us to achieve the same growth rate of 46.60pc. He further explained that total export performance of leather was $1.220 billion during the year 2007-8 and the sector could have reached to the level of $1.788 billion during the year 2011-12 against actual exports of $1.048 billion i.e. 70.61pc less than achievable level of $1.788 billion.
Agha further told the Senior Minister, Pakistan lost 49pc of its global share in last five years which is alarming. He further added that countries like Italy and Vietnam with very little livestock population have 13pc and 6.22pc of global leather market share respectively and Pakistan with total livestock of 160 million have only 0.76pc share of global market. Agha attributed this decline in exports to energy crisis, cost of doing business which has gone up due to impact of war on terror, lack of level playing field, smuggling and export of live animals under the shelter of quota system, export of wet blue leather and withdraw of government subsidy on participation in international fairs.