PAKISTAN UNVEILS NEW TRADE POLICY TO BOOST EXPORTS Pakistani government allowed freer cotton and rice export in a three-year new trade policy aimed at narrowing the country's yawning trade gap. Commerce and Planning Minister Mahbubul Haq said in a televised speech the government had also decided to allow duty-free import of cotton yarn to make the textile industry more competitive, and to link bulk tea imports to the export of Pakistani products. Cotton and rice are Pakistan's main exports, which have been handled exclusively by state corporations since early 1970s. But Haq said now the private sector would also export cotton and rice along with the corporations, which meets a long-standing demand of the local traders. The duty-free import of cotton yarn has been allowed to bring down prices and help the local ancillary industries compete effectively in the world market, he said. Haq said the new policy, effective from the fiscal year 1987/88 beginning on July 1, would be for three years but reviewed every year. It was a departure from the previous practice of announcing trade policies for a single fiscal year, and Haq said it would enable the businessmen to plan their market strategies over a longer period. He said an export credit of 250 mln dlrs had been provided for the export of engineering goods to selected third world countries on soft credit terms. Pakistan's 1986/87 exports at 3.6 billion dlrs, 18.2 per cent more than in the previous year, and imports at 5.23 billion dlrs compared to 5.63 billion dlrs in 1985/86. He said the government policy was to rationalise and streamline import controls. "It has been observed that due to restrictions on imports, specially on raw materials and intermediate goods, local industry has been suffering for want of necessary inputs," he said. "Prices have been on the increase and quality of goods produced has been low. This restrictive policy also gave rise to smuggling and hampering of exports." He said that to correct this situation, 136 items had freed from import restrictions. Previously, Pakistan has met its trade gap largely from remittances from its nationals working abroad, mainly in the Gulf. However, the remittances have begun to fall after the drop in oil prices in recent years leading to the spectre of a balance of payments crisis for Pakistan.