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News Clips 18 June, 2013

[ Rs 7.5 billion earmarked for textile policy initiatives ]
[ Revised Trade Policy by end of July ]
[ Bangladesh approves trade deal with US ]
[ Tesco stops sourcing from a Bangladesh factory due to safety concerns ]
[ US announces safety grant for Bangladesh factories ]

Rs 7.5 billion earmarked for textile policy initiatives   [ top ]

BUSINESS RECORDER, Tahir Amin, June 16, 2013
The government has earmarked Rs 7.5 billion in the budget 2013-14 against the demand of Rs 30 billion for the implementation of textile policy. The Ministry of Textile Industry had demanded the money for taking up various initiatives under the textile policy (2009-14). In the outgoing fiscal year (2012-13), the same amount - Rs 7.5 billion - was earmarked in the budget against the demand of Rs 30 billion.

However, because of financial crisis, the Ministry has so far received just Rs 3 billion. The Ministry had also demanded Rs 35 billion in the budget 2011-12, but the government released Rs 7.5 billion because of which initiatives announced in the textile policy could not be implemented.

Officials told this correspondent that the amount would be spent on implementation of textile policy, including Textile Investment Support fund, drawback of local taxes, refund of past Research and Development (R&D) claims and magnetisation of Purified Terephthalic Acid. The government had announced Rs 42 billion for textile export promotion under the textile policy in the budget 2010-11 of which 67 percent was to be spent on textile and clothing industry for their consolidation and value-addition of the sector. However, the Ministry got just Rs 7.75 billion in 2010-11. Officials believed that under these circumstances, the textile policy was unlikely to yield the desired results.

Revised Trade Policy by end of July   [ top ]

THE NEWS, Javed Mirza, June 18, 2013
KARACHI: Dissatisfied with the Pakistan Peoples Party (PPP) framed trade policy, the PML-N government has initiated seeking input of the business community for the new trade policy, an official said.

Azam Muhammad, executive director general (Domestic Commerce), ministry of commerce and industry, said that the new trade policy will be announced by the end of July and would give sufficient focus to promote domestic commerce, which is one of the most important segments of the economy.

For this purpose, necessary institutional, legal mechanism and business processes are being established to facilitate domestic commerce regulations to facilitate the growth of domestic commerce, he said.

The Strategic Trade Policy Framework 2012-15 had envisaged an export target of $95 billion in three years. The business / export sectors and even the Trade Development Authority of Pakistan (TDAP) had expressed concerns over the export target, which lacked details and framework, the official said.

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that the export target of $95 billion is unrealistic without uninterrupted supply of electricity and gas and improving the law and order situation.

The value-added textile export sector had expressed reservations over the Strategic Trade Policy Framework (STPF 2012-15) that the textile sector had been meted out step-motherly treatment and grossly neglected.

Javed Bilwani of the value-added textile sector, expressed concerns over the fundraising of Rs5 billion for EXIM Bank from export development surcharge levied on exporters.This decision was taken without the consultation of major stakeholders, he said, adding that the EXIM Bank is import and export bank and it is unjustified that funds contributed as export development surcharge be available for importers.

“Export development surcharge consists of the hard-earned money of the exporters, which are being squandered away left right and centre to entities having no major stake in exports.The export development funds were being granted for purchase of land, construction of buildings, etc, for projects, which had nothing to do with the development of exports,” Bilwani said.

He cited the example of Pakistan Institute of Fashion Design, which was the recipient of the major amount of EDF several times, although this institute had no contribution to the exports because all designs were supplied by foreign buyers but this institute was meted out special treatment, which was beyond understanding.

Lamenting on the fact that while the exporters struggled hard to earn foreign exchange for the country and contributed 0.25 percent of the export proceed to the EDF, the funds were granted to entities who had been availing of grants from the Public Sector Development Programme (PSDP) and other funds and should never be granted funds from the EDF, which was the right of the genuine exporters.

Bangladesh approves trade deal with US   [ top ]

DAWN, June 18, 2013
DHAKA, June 17: Bangladesh on Monday approved a trade agreement with the United States as it comes under intense pressure from Washington to improve labour rights following a series of factory disasters.

Bangladesh’s Cabinet, led by Prime Minister Sheikh Hasina, agreed the Trade and Investment Cooperation Framework Agreement (TICFA) to be signed with the United States, cabinet secretary Musharraf Hossain Bhuiyan told AFP.

The deal will lead to stronger trade and investment ties between the two countries on the back of growing Bangladeshi garment exports to the US, he said.

The deal will also “ensure protection of intellectual property, curb corruption and ensure labour rights”, he told reporters.

Bangladeshi trade officials have said Washington proposed the deal several years ago, but Dhaka resisted signing the accord because of concerns it could lead to scrutiny of the country’s poor labour and intellectual property laws.

Dhaka’s position reversed after it came under intense pressure, including from Western governments, to improve working conditions in the country’s 4,500 garment factories following a series of industrial disasters that killed some 1,250 people.

A spokesperson for the US embassy in Dhaka welcomed Monday’s decision saying “we look forward to further discussion so that the agreement can be signed in the near future”.

Two-way goods trade between the countries totalled $5.4 billion in 2012, according to the Office of the United States Trade Representative website.

Last week the US said it would soon decide whether to suspend Bangladesh from a duty-free accord as it urged Dhaka to take action to improve labour conditions.

Tesco stops sourcing from a Bangladesh factory due to safety concerns   [ top ]

REUTERS, Jun 15, 2013
LONDON (Reuters) - Tesco, the world's No. 3 retailer, has stopped sourcing clothes from a factory in Bangladesh after discovering serious problems with the safety of a building, the company said on Saturday.

The move follows a survey the British-based supermarket chain conducted in the wake of the collapse of the Rana Plaza factory complex in Dhaka in April that killed 1,129 people.

"A structural survey of a site we source from in Bangladesh, owned by Liberty Fashions, has revealed serious problems with the safety of one of the buildings," Tesco said in a statement.

"We immediately made the owners aware of our findings, and tried to find an alternative to ceasing production of Tesco products on this site. We are disappointed that this was not possible...

"Our concerns about the structure of this building are so serious that we decided our only option was to stop taking clothes from this site with immediate effect."

Tesco, which has promised to conduct structural surveys of all the factories it sources from, said it had urged the owners of the site to stop all production and to evacuate the premises to ensure the safety of its workers.

It had also informed the relevant authorities, other customers of the site and the Bangladesh Garment Manufacturers and Exporters Association (BMGEA) of the survey results and its decision to stop sourcing from the site.

The retailer said it had stopped using 15 factories of concern in Bangladesh in the past 12 months.

Bangladesh has pledged to improve safety in the garment industry after the Rana Plaza collapse but has not pledged any new money to relocate dangerous buildings.

The collapse of Rana Plaza, a factory built on swampy ground outside Dhaka with several illegal floors, on April 24 ranks amongst the world's worst industrial accidents and has galvanized brands to look more closely at their suppliers.

Very low labor costs and, critics say, shortcuts on safety, makes the country of 160 million the cheapest place to make large quantities of clothing.

Companies are split over how to improve conditions. Big European names have signed an accord that would make them legally responsible for safety at Bangladesh factories. U.S. firms like Wal-Mart Stores Inc have broken ties with non-compliant factories.

US announces safety grant for Bangladesh factories   [ top ]

BBC NEWS, June 14, 2013
The US has said it will provide grants to help improve safety standards in Bangladesh garment factories.

The US Labor Department will give $2.5m (£1.6m) to help improve the enforcement of fire and safety standards and ensure better protection of workers.

The grants come amid concerns over safety standards in Bangladesh's garment factories, one of the biggest employers in the country. In April, the collapse of a factory killed more than 1,100 people.

The Rana Plaza incident, Bangladesh's worst industrial tragedy, triggered calls for greater scrutiny of working conditions in Bangladesh factories - most of which make garments for the US and European markets.

Western retailers and the Bangladeshi government announced a series of measures to improve conditions for the country's millions of clothing workers, something which activists have been demanding for years.

Several big names, including Sweden's H&M, the biggest buyer of Bangladeshi-made clothes, signed up to a legally-binding code requiring them not just to meet minimum fire and building safety standards, but also to pay for them.

"In recent months, the government of Bangladesh, industry, worker and civil society organisations and other groups have engaged in stepped-up efforts to address fire and building safety concerns," the Department of Labor said in a statement.

"The government and other stakeholders, however, have a great deal of additional work to do in order to implement existing and developing plans.

"The Department of Labor's funding of technical assistance represents one important element in a broader strategy to address these issues."

The funding will be awarded through the department's Bureau of International Labor Affairs.