PAKISTAN SEEKS CONCESSIONS
Byline: Kristi Ellis
WASHINGTON — The Pakistani government is seeking a temporary suspension of apparel and textile tariffs and quotas in return for its support in the fight against terrorism.
Pakistan’s Commerce Minister Abdul Razaq Dawood told a delegation of apparel and textile retailers, importers, manufacturers and trade association officials Thursday that he has asked the Bush administration for those concessions.
Dawood is seeking temporary suspension of tariffs and quotas through 2004, and hopes to have an answer in the next few weeks, he said in an interview with WWD after the meeting. Addressing a group of about 50 executives and industry representatives at the Pakistani Embassy, Dawood used the forum to allay fears about instability in his country, shipping delays and security.
Executives from The Warnaco Group, Kmart, Federated Department Stores and most of the major lobbying/trade associations took part in the afternoon meeting with the minister. The biggest surprise attendee was Michael Hutchinson, acting chair of the Committee for the Implementation of Textile Agreements, who normally works behind the scenes to carry out trade policy.
“We have emphasized the urgency of the situation,” Dawood said. “Pakistan has come out very strongly in support of the U.S. and we are having at this moment some problems — nothing substantial — but if the U.S. government wants to continue a long-term economic relationship with Pakistan, the best way to get that is through [temporarily suspending] tariffs and quotas.”
Under GATT, quotas will be phased out by Dec. 31, 2004.
“When the quotas are gone, we can discuss the overall long-term issues and the way the U.S. wants to do it,” he said.
Dawood has spent the past week meeting with high-level officials, including Donald Evans, secretary of commerce, Robert Zoellick, U.S. trade representative, and Alan P. Larson, undersecretary of state for economic, business and agricultural affairs.
The ultimate decision on concessions to Pakistan will, of course, be made by the Bush administration, but many agencies, such as the Department of Commerce, USTR office and the State Department, are gathering information to make a final recommendation to the President.
“Textiles are Pakistan’s biggest export product,” said Dawood. “We have a textile vision for 2005 and we are looking at how to make the industry internationally competitive.”
The apparel and textile industry in Pakistan employs 2.5 million people. It is the number one supplier to the U.S. of cotton yarn imports, cotton fabric and cotton home furnishings, according to Commerce Department figures. The total annual value of Pakistan’s textile and apparel exports to the U.S. is $1.9 billion, making it the fourth-largest supplier.
Importers, manufacturers and retailers have called on the Bush administration to offer short- and long-term concessions to companies sourcing in Pakistan and other countries in the region, as the U.S. continues its military buildup in the wake of the nation’s worst terrorist attacks on Sept. 11.
Among the concerns raised with the Pakistani minister were shipping delays of up to 10 days, war-risk premiums of up to $300 per load and negative anti-American media images in Pakistan.
“We produce 12,000 dozen units a week in Pakistan and we are having serious problems with airlift capacity,” said Michael Gale, an in-house lobbyist of Warnaco. “We hope Pakistan and the U.S. government can resolve this problem in weeks, not months.”
Gale noted that all U.S. companies are currently making buying decisions on spring and summer merchandise. He said it normally takes four days to ship an order from Pakistan to the U.S., but it is currently taking 11 to 15 days.
Undersecretary Larson assured the group that steps are being taken quickly to address shipping problems.
“I think that the primary issue that has been raised with me with the greatest urgency is the issue of transportation,” Larson said. “I am becoming increasingly confident every hour I work on this that it is something that is very susceptible to a fairly quick resolution and that is what we are focusing on the hardest.”
Larson told the group that some air carriers delivering humanitarian aid and other suppliers are leaving Pakistan empty and could likely be used to transport apparel and textiles back to the U.S. He also noted that he held discussions with two U.S. airline industry associations Wednesday and informed their members about the opportunities.
“It’s not the business of the U.S. government, typically, to be a matchmaker, but this is a situation where everyone understands there is some alarm,” Larson said.
Still, Larson, in an interview before the meeting, made it clear that he’s not focused on long-term concessions such as quota elimination or tariff reductions. Dawood assured the delegation that the four main ports in Pakistan are some 2,000 kilometers from the border with Afghanistan.
Many executives also were concerned about anti-American sentiments in Pakistan that have been portrayed on television and in newspapers around the world. It was suggested that Pakistan publish an open letter in U.S. newspapers stating that it is important for retailers and consumers to support Pakistan.