ISLAMABAD, March 4: Pakistan will work out a list of items, mostly textile products, to be manufactured in the proposed reconstruction opportunity zones (ROZs) for export at zero custom duty to the United States.
A senior official told Dawn on Saturday that the proposal for the establishment of these zones had already been discussed with the US authorities at technical level during the last year and even during the recent visit of the Pakistani prime minister to Washington.
However, the US has changed the name from qualified industrial zones (QIZs) to ROZs on the reason that the QIZs were mandated into law by the Congress only for Israel and Jordan and the same name could not be given to another scheme.
Therefore, the new proposed scheme for Pakistan would be called ROZs for which the Congress would have to give authorization, the official added. “It was just changing of name. The facility under the two programmes would be the similar,” the official added.
The US President George W. Bush had accepted the Pakistani proposal in a meeting with his Pakistani counterpart and later in a news conference announced that the trade zones established in the remote areas (tribal and border) would get duty free access on goods exported to the US market.
Mr Bush said that the facility was agreed on the theory that economic vitality and economic prosperity for people in the remote regions of Pakistan would help defeat the terrorists and their ‘hateful ideology’.
It is estimated that following the implementation of the proposal export of those Pakistani products would increase manifold which were currently subject to high customs duty in the US.
The bilateral trade between the two countries was recorded at $5 billion during the year 2004-05.
According to the official, it was agreed under the proposal that all those items will be allowed at zero per cent duty, which were currently attracting higher customs duty in the US.
When asked whether the US agreed to allow all textile products manufactured in the ROZs at zero per cent duty, the official said that it would be negotiated later on. “We are working on a list to be finalized in consultation with the relevant stakeholders,” the official added. He said that the methodology and areas of items would be considered later at technical level.
The facility was offered to Pakistan by the US after mutual consultation, the official said and added that Pakistan could jointly establish industries with Afghanistan in border areas.
“It would depend on the understanding between Pakistan and Afghanistan,” the official remarked. Pakistan would export finished or semi finished products from these zones to the US.
Under the joint declaration, the United States will provide financial support for the establishment of a centre for entrepreneurship in Pakistan under the Broader Middle East and North Africa (BMENA) Initiative.
