PAKISTAN-JAPAN AGREE TO MAKE AUTOMOTIVE AS LEADING INDUSTRY OVER NEXT DECADE - INFRASTRUCTURE DEVELPMENT

Founder Editor Tazeen Akhtar..

Islamabad - Mr. Tsuneo Kitamura, Parliamentary Vice-Minister of Economy, Trade and Industry and 57-member Japanese Business Delegation visitedPakistan and participated in the 5th Pakistan-Japan Government Business Joint Dialogue. Pakistani side was represented by Mr. Mohammad Zubair, Chairman, Privatization Commission, Muhammad Shahzad Arbab, Secretary Commerce, Mr. Sohail P. Ahmed, President, Pakistan Japan Business Forum and accompanying Pakistani Business Delegation. Both sides exchanged their views on a wide range of issues concerning economic relationship between the two countries including trade and investment.

The Pakistani side elaborated that Japan is a promising market for their textile products. But Pakistan is facing a disadvantageous position because of differential market access, as compared to regional competitors like India, Bangladesh and ASEAN countries. They are enjoying duty free access to the Japanese market, either because of bilateral/regional trading arrangements or having a LDC status. Although Pakistan has GSP status and is getting on average 1.4% lesser duties than developed countries but yet the tariff imposed on Pakistan’s exports is 5.36% (on average) more than India/Bangladesh and ASEAN countries. Last year, Japan imported textile products amounting to US$ 38 Billion whereas share of Pakistan was only US$ 123 million less than 0.33%. The Pakistani side explained the contents of “Early Harvest Program” (EHP) to the Japanese side and expressed desire to discuss EHP covering initially specific tariff lines for Textiles. It was agreed that as a way forward, that the Ministry of Commerce of Pakistan would get feasibility study done.

JICA (Japan International Cooperation Agency) expressed its desire to start a technical cooperation project to support the Pakistani textile industry in 2016 in order to produce further high value added products and strengthen its international competitiveness.

The Pakistani side pointed out that Olympics 2020 is opening new doors for the temporary movement of natural persons. Pakistan with 180 million people, with a majority of English speaking young skilled manpower, expressed its willingness to cooperate with Japan for successful Olympics 2020.The Pakistani side requested to provide substantive opportunities to Pakistani manpower (skilled and unskilled) towards this end.

The Pakistani side requested for issuance of longer-term validity multiple entry visas to Pakistani businessmen.

Both sides concurred to cooperate for the trade expansion in other private sectors of both countries as well. In this regard, the Pakistani side stated that they will set up a “Consultation Service for Pakistani Companies” at the Embassy of Pakistan in Japan in order to facilitate the Pakistani companies for their business with Japanese companies.

The both sides agreed that the development of Special Economic Zones is important for attracting investment. The Pakistani side shared with the Japanese side the view that investor friendly amendments in SEZ Act 2012 are in advance stage of approval and would be promulgated by January, 2016. The Pakistani side requested Japanese assistance in establishment of SEZ Secretariat and provisions of hardware and related infrastructure.

Both sides agreed that the automotive industry should be facilitated as a leading industry, a driving force of Pakistan’s economy over the next decades, as it creates jobs, explores new innovation and realizes social prosperity. In this regard, the Pakistani side expressed to issue the new Automotive Development Plan (ADP) as soon as it is finalized, since it is a core policy for automotive industry.

Both sides concurred to develop infrastructure in Pakistan such as energy, transport for further economic growth in Pakistan. Both sides stated that shortage of electricity in Pakistan is an issue being effectively handled by the current government, Japanese cutting-edge technologies such as highly efficient coal-fired power plants will contribute to the mutual benefits and prosperity of both countries.

In addition, both sides recognized that Japanese Official Development Assistance (ODA) loan for energy sector has been significantly useful for policy reforms. The Pakistani side expressed their gratitude and commitment for their continuous efforts in accelerating these reforms.

The Federal Minister for Industries and Production Ghulam Murtaza Khan Jatoi met with H.E. Mr. Tuneo Kitamura, Japanese Vice-Minister for Economy, Trade & Industry and his Japanese delegation at his residence in Islamabad today. Both counterparts discussed various issued related to trade and investment. Mr. Kitamura congratulated the Pakistani Minister on successful power sector reforms that Pakistan has undertaken and he lauded the current Pakistani government’s vigor in this respect. He also appreciated the considerable improvement the present government has achieved as far as security and infrastructural development are concerned.

Mr. Jatoi highlighted that facilities such as the National Industrial Parks, under the Ministry of Industries and Production, could be utilized by Japanese companies and would give them a secure environment with infrastructural necessities and tax-free incentives to produce there. The Minister for Industries and Production emphasized that the country would benefit from Japanese cutting edge technology for power and automobile sector projects. He added that Pakistan needs power through gas as well as hydroelectric, solar and other renewable energy sources. Furthermore, Mr. Jatoi apprised the Japanese Vice-Minister of the 9700 sq. km Gharo wind corridor for wind power generation as well as ample land all across Pakistan for solar power generation, where Japan can invest.

Speaking on the Auto Industry Development Programme-II (AIDP-II) or the new ‘Auto Policy 2015’, Mr. Jatoi maintained that pioneer industries would get concessions from the Pakistan government. Mr. Kitamura also looked forward to the new auto policy and hoped that the Pakistani government will give incentives to existing investors as well. The Pakistani Minister assured that he would try to extend as much support as he can for new and existing stakeholders in the automobile industry and will ensure that a competitive environment prevails.

The Minister for Industries and Production looked forward to a greater level of cooperation between Pakistan and Japan in areas of trade, investment, development, energy and capacity building. He hoped that both countries could help raise the US$ 1.94 billion bilateral trade volume, which is well below the potential of such a partnership. Mr. Jatoi guaranteed that his Ministry would give any and all support possible in all respects.

 

The Ambassador of Japan to Pakistan H.E. Mr. Hiroshi Inomata was also present.