ARTICLE First, a few words on the bed linen anti-dumping duty imposed by EU. The industry is blaming the government for mishandling the case.

This is an unsustainable allegation. I have handled and observed the defence of more anti-dumping investigations in Pakistan than any other individual and have no hesitation in saying that the Ministry of Commerce did all that could be expected of it. The industry mishandled the case from day one.

The recently held Press conference by some industry elite threatening to cancel purchase orders from Europe was tactless and counter-productive. Unfortunately a public analysis of the case is not in the best interest of all involved. I do, however, have some comments/suggestions:

1) Pakistan must go through dispute settlement proceeding and should do it expeditiously. There is no point in writing letters here and there, as is being reported in the Press.

The required legal sequence must start immediately. Our Deputy Minister at Geneva, Nasim Qureshi, has the experience of US combed cotton yarn safeguard case (against US), which Pakistan won. He can co-ordinate this case also.

2) In May, 10 more countries will be joining EU. I believe that the proposed AD duty cannot be imposed by the 10 new members of EU, as the domestic industry of these 10 countries was not part of investigation.

3) As per panel decision in India-Turkey case, the ten new entrants to EU cannot impose textile quota on Pakistan unless a mutually acceptable bilateral agreement is reached as was done by Pakistan and Turkey.

4) EU's attempt to start anti-dumping proceedings against the Indian bed linen was thwarted as India took EU to WTO and the dispute settlement panel upheld India's view.

The Pakistan industry/government should review that case. We should also have a "talking relationship" with Indian counterparts to be able to discuss issues of mutual interest. I had established such a relationship when I was handling cases on behalf of Pakistan and found it beneficial.

NOW, TO THE MAIN SUBJECT:
With the devolution of power initiative started by the Musharraf government, the role of different levels of government is going through a process of evolutionary change.

The provincial governments need to review their role in the new scheme of things. It appears that while on some issues their role will diminish, handing over the responsibility to CDG's, on certain other issues the role of provincial governments will increase.

The industry in Pakistan, in general has very little interaction with the provincial governments. It mostly looks towards the federal government for policy guidance, regulatory issues, investment, facilitation etc.

The role of the provincial governments, as far as the industry is concerned is mostly restricted to collecting levies, like social security, and on some other labour laws-related issues. The provincial government is seen as a regulator and not as a facilitator.

The federal ministries in Pakistan, like Commerce, Finance, Industries etc, operate with certain targets.

The entire nation is aware of the targets like GDP growth, fiscal deficits, foreign exchange reserves etc.

So far, these targets on provincial levels do not exist and the performance of the provinces is not measured on such issues.

Thus, while we are aware of GDP growth or export achievement on a national level, we are totally unaware of the performance of the provinces.

Such lack of performance criterion makes it impossible to compare the performance of different provinces, thereby eliminating the chances of a healthy competition between the provinces.


This kind of competition plays an important rote in the development of other countries.

Increasing importance of WTO for our economy has attracted the attention of our provincial leadership.

The Chief Minister of Punjab, Chaudhry Pervaiz Elahi, is known to be paying special attention to WTO-related issues.

Following his directive, cells and committees have been created in various provincial departments/ministries to study WTO related issues arid to recommend steps, that need to be taken by the provincial governments.

This article examines the issues facing these committees and presents some observations and suggestions.

1. At present the provincial committees appear to be consciously trying to divide the WTO issues between federal and provincial issues and then try to move away from the federal issues.

This is a self-defeating approach. For the purpose of research, study, understanding and developing recommendations it is not possible to separate federal and provincial subjects.

The separation should occur only when and if executive orders are to be issued.

2. Relationship between various provincial committees working on WTO-related subjects, and the federal Ministry of Commerce should develop to the extent that the provincial committees should be able to provide valuable inputs to the WTO Cell of the Ministry of Commerce.

The provincial committees should raise the level of their knowledge and expertise in matters related to the WTO. For this purpose the provincial resources should be developed and level of dependence on Islamabad should be decreased.

The name of the game under the WTO regime is competitiveness and compliance. The provincial authorities need to develop expertise to analyse and quantify competitiveness and compliance.

This effort can only be undertaken under a strong public-private partnership.

3. The provincial Planning and Development department should develop a "vision" and should outline provincial targets.

The provinces need to develop the expertise in managing a post-WTO economy. While the federal agencies have developed several "visions" and planning documents, the provinces need to break up these visions into "provincial visions."

4. The provinces should adopt the role of facilitator on the issues considered federal subject.

The provinces should encourage the industry to contact provincial ministries and should intercede with the federal authorities on behalf of the industry located in their province.

5. The environment-related issues are going to become of major concern on WTO front. There is great divergence of opinion over the degree to which environmental issues belong to the WTO regime.

However, whether these issues are WTO-driven or consumer-driven, we should get ready to face these issues.

The industry often complains about the cost of compliance, eg setting up of effluent treatment and waste disposal facilities.

These facilities should be considered part of the infrastructure that the government should provide to the industry.

6. Paradigm of provincial government toward the private sector, especially the industrial sector, needs to undergo a major change.

The provinces should self-impose investment, GPP (Gross Provincial Product) growth and employment growth targets.

The provincial ministries should see themselves as facilitator and act as a tunnel for attracting Federal inputs for the benefits of provincial stakeholders. When it comes to WTO, the name of the game is competitiveness. Each province and its administration should wage its own war to increase the competitiveness of the industry located in it.

The provincial administration should inculcate the feeling in the mind of the industry that increased interaction with the provincial ministries will benefit the industry and expedite solution of its problems.

7. The Provincial Committee on Investment (PCOI), traditionally a dormant institution, should be activated and asked to play a proactive role.

Competitiveness can only be achieved through efficient governance.

The provinces should plead the case of its industry for achieving good governance.

AKBER SHEIKH
Courtesy Business Recorder