SWEDEN

ANNUAL REPORT 2004

Anjum Assad Amin Commercial Counsellor

Commercial Wing Embassy of Pakistan,

65 Karlavägen 114 49 Stockholm

2

Preface After stagnation and a declining trend during the past years, Pakistan’s exports to Sweden picked up sharply by a 23% in the year 2003-2004. Imports growth was enormous: 70% during the same period but the balance of trade remained positive. Consumer demand in Swedish Market grew by steady a 3% during 2004. Visit of Gen. Pervez Musharaf, the Honourable President of Pakistan in July 2004 gave a real boost to bilateral economic, investment, trade and business activities. An impact was observed in frequent visits of exchanged of delegations from Sweden to Pakistan and vice versa. Mr. Humayun Akhtar Khan, the Honourable Minister for Commerce had a short but very meaningful visit to Sweden to lobby market access for Pakistan in GSP+. His business meetings with leading multinational companies of Sweden provided an effective mutual interaction. Leading newspapers of Sweden covered the visit. Sweden supported Pakistan for market access by GSP+ and so did Estonia, Finland and Latvia. Besides, Sweden has supported Pakistan in PET, Basmati Rice regulations and anti dumping in Bed linen. H & M, a leading Swedish multinational chain store, established their buying office in Karachi. Currently they are buying garments worth US $ 30 million from Pakistan. In future two years, they plan to increase procurements from Pakistan up to US $100 million. Other Swedish companies to start / expand their operations in Pakistan during 2004 include Ericsson (telecommunication), Bombardier (Railway signalling), IKEA, MQ (ready made garments), Lindex (ready made garments) and Becker Leathers (leather garments). It was not an easy task to activate trading activities and accomplish high growth in exports with only one staff member (Secretary). Output of this office will increase manifold if strengthened in terms of staff and logistics. Sweden has a strong stable economy with a generous welfare system. Despite all the amenities, strong weather makes life very hard. Persisting low temperature up to –25.0 C with an hours average daily sunlight during the months of November, December and January, required courage, strength and adaptability. Swedish winter during the year 2004 prolonged until April 2005. Despite limitations and restrictions I was able to work with zeal, zest and vigour due to good support and encouragement by the Ministry of Commerce for which I want to extend my thanks. My efforts to increase Pakistan’s exports to Sweden will be sustained and strengthened in future.

Anjum Assad Amin

April 20, 2005

3

Contents

1. Introduction to Sweden 4 2. Swedish Economy and Trade 4 3. Future Projections 5

4. Major Companies 6

5. Market Access /Trade Agreements/International 6 Organizations

5.1 European Union 5.2 Sweden and the European Monetary Union 5.3 Anti-Dumping Duties on Cotton type Bed Linen 5.4 EU Regulation No. 1503/96 Super Basmati

5.5 GSP+ 5.6 Anti- Dumping on PET

6. Sweden’s Global Imports 9 7. Sweden’s Global Exports 10 8. Competitor Analysis 11 9. Pakistan Sweden Bilateral Trade (Time Series) 12

10. Product Analysis, Pakistan’s Exports to Sweden 15 11. Trade Promotional Activities 21 A. Business Meetings

B. Business visits C. Trade Fairs/Exhibitions

D. Seminars E. Delegations

F. Miscellanies

12. Recommendations / Proposals 28

4

1.Introduction to Sweden With an area of 449, 964 sq.km, Sweden is one of the largest countries in Western Europe, equal to the size of California, Iraq, Spain or Thailand. Inhabited by 9 million, majority (85%), live in the southern half of the country. The major cities are Stockholm (Capital), Gothenburg and Malmo. The average temperature in July is +18 but the temperature falls below freezing (up to -20 C in December, January and February), with heavy snowfall. Average sunlight during the months of November, December and January is one hour a day. During the summers the average for May, June and July is 10 hours per day. Sweden has world-class infrastructure with excellent highway and railway systems, modern ports for containerised shipping, and deregulated telecommunications. Official language is Swedish but English is widely spoken. Majority, 90% are Evangelical Lutheran. Muslim and Jewish are minority. National currency is Swedish Korona with Exchange Rate as under: - Rate valid as of: 15/4/2005 100ore =1 Swedish krona (plural:kronor) US$ 1: SEK 7.16 Eu 1: SEK 9.18 Skr 1: Rs. 8.3 Following its heavy fall in the autumn, the dollar recovered against both the euro and the krona. At the same time, the krona has weakened slightly against the euro, which means that the trade-weighted SEK/TCW rate has fallen recently. The SEK/TCW forecast is on average 123,6 for 2005 and 122,5 for 2006 and 2007. 2. Swedish Economy and Trade With total Exports worth US$ 101 billion, and imports US$ 90 billion, Sweden is a small open economy strongly dependent on foreign trade that accounts for 40-45% of real GDP. Major industrial groups in Sweden have a large share of their production abroad, mostly in EU countries. With only 0.2% of the world population, Sweden accounts for about 2% of world trade. More than half of the Swedish trade is with EU countries. Other major trade partners are Nordic countries, Finland, Norway and Denmark. United States is the largest single region outside of Europe that accounts for 14% of Swedish exports. Since not very late, the trade of Sweden has concentrated on Japan, China, Hong Kong, South Korea, Malaysia and Singapore. Asia now accounts for about 12% of Swedish Exports. State Bank’s (Riksbank) monetary policy target is price stability that is operated by keeping inflation at 2 per cent. The reports predict that the Economic upturn in Sweden will continue in the coming years and the resource utilisation will increase gradually both in Sweden and abroad. Despite high global economic growth and international inflation, high domestic productivity growth has kept

5

the inflation levels at low in Sweden. A number of factors to depress inflation levels include falling prices for food and clothes. This is also linked to increased price competition in the non-durable goods trade and abolished import quotas on textile goods. Therefore, despite the stable economic upswing, inflation is expected to remain low in 2005 and rise only moderately during the forecast period to around 2 per cent two years ahead. The recovery in the Swedish economy began in 2003 and has since continued. Growth in 2004 was 3, 5 per cent. The high growth rate has been supported by strong international demand for Swedish products. Productivity has also increased rapidly, particularly in the industry. Export of services has increased more than expected. The increased surplus from trade in services has been an important factor behind the high growth in the business sector in 2004. Some of this stems from merchandising, but service exports have been the strongest factor on the whole. 3. Future Projections Import Demand Economic activity is expected to improve gradually in all sectors. Growth in domestic demand is expected to accelerate, while the contribution from net exports will slacken. During 2005, more investment by the firms and more consumption by the households is expected to account for the major part of the increase in demand. Household’s increased willingness to consume is supported by rising disposable incomes and improved labour market prospects. All in all, imports of goods are expected to grow by around 7 per cent annually in the coming years. Structural changes also appear to have contributed to the low domestic inflation. This is particularly true of food prices, which have dropped recently. Tougher competition in the retail food market has contributed to the dampening food price inflation. Low price food chains in the country have resulted in lower food prices and probably also squeezed profit margins in the sector. Food prices have fallen by 0,8 per cent in the past year. Export Supply Growth in the Swedish economy picked up in 2003 through 2004 is expected to remain high in the coming years. Resource utilisation in the economy is still relatively low but is forecasted to rise in the period ahead. As economic activity strengthens, labour market situation is expected to improve during the forecast period. Domestic cost pressures are anticipated to gradually rise in the coming years.

GDP (growth) by expenditure

2003 2004 2005 2006 2007 Private

consumption 1,5 1,8 (2,4) 2,7 (2,8) 3,0 (3,0) 3,3

Exports 5,0 10,2 (9,7) 6,6 (6,0) 6,1 (6,3) 6,0 Imports 4,9 6,7 (6,9) 7,5 (6,9) 6,6 (6,9) 6,7

6

Households’ real disposable incomes rose by 1, 3 per cent in 2004. In 2005 and 2006 their real incomes are expected to grow by around 3 per cent a year, slightly stronger than previously estimated. This is partly because inflation is now anticipated to be lower. Competition Low-cost countries such as China and Poland have increased their share of Swedish imports substantially in recent years. Other low cost countries having recently joined EU will have advantage in terms of duty free market access and low freights that includes Eastern European and Baltic countries. 4.Major Companies An important factor of success of Swedish companies is Internationalisation in investment that has enabled them to sustain and expand their operations despite cyclical fluctuations in the world economies. Major Companies of Sweden in order of sales US $ Billions are: - • Ericsson • Volvo Trucks • Skanska • Electrolux • Volvo Cars • IKEA • Sandvik • SCA • Securitas • Atlas Copco • Scania • SKF • Vattenfall 5. Market Access /Trade Agreements/International Organizations Pakistan’s access to Swedish market is dependent on the memberships and trade agreements of Sweden with the rest of the world. Sweden is a member of EU; EFTA; the UN; the WTO; the Nordic Council (NC); the Council of the Baltic Sea States (CBSS); the Arctic Council (AC); the Partnership for Peace (PFP); the Organization for Security and Cooperation in Europe (OSCE); the Council of Europe (CE); and the Organization for Economic Cooperation and Development (OECD); Australia Group, FAO, G- 6, G- 9, G-10, IBRD, IDA, IFAD, ILO, IMF, Interpol ISO, NAM (guest), OECD, OPCW, UNCTAD, UNESCO, UNHCR, UNIDO, WHO, WIPO. Tariffs, quotas, import duties and related issues are the same as for EU.

7

5.1 EUROPEAN UNION Since January 1, 1995, Sweden joined Customs Union and the Common Trade Policies of European Union, Single Market and partly, Common Commercial Policy, CCP. After joining EU, Sweden’s competence to propose and approve legislation and enter into agreements with other countries has to be shared with the rest of EU members. Despite that Sweden has been compelled to side with the anti-dumping proceedings /measures against Asia, and Central and Eastern Europe regarding agricultural policy, export subsidies and border protection, necessary adjustments have been made to maintain its independent position and influence EU and WTO toward the liberalization of policies in EU.

5.2 SWEDEN AND EUROPEAN MONETARY UNION Sweden was not accepted for participation in EMU at the launch of the Monetary Union in 1999 for the reason that Sweden failed to fulfil the criterion of a stable exchange rate in relation to other participating countries and therefore, granted a derogation from the Monetary Union which was examined , in 2000, 2002 and 2004 without any change. Swedish Parliament (Riksdag) decided in 1997 that Sweden would not participate in the Monetary Union. Sweden has also not made a conscious effort to fulfil the criterion of a stable exchange rate which is an important requirement for participation in exchange rate cooperation – ERM2. Membership of ERM2 is voluntary. On 14 September 2003, a referendum was held to determine whether or not Sweden should introduce the euro as its currency. The majority of voter were of the opinion that Sweden should remain outside the Monetary Union. Accordingly, the Swedish Central Bank (Riksbank), continues to exercise monetary policy in Sweden. This implies that the Swedish krona continues to be Sweden's currency and will not be a part of the exchange rate mechanism ERM2. The main reason for Swedes to not to opt for Euro is the scepticism that Euro will affect the competitiveness of Swedish companies in EMU countries as well as the trading partners through the disappearance of transaction costs and easier price comparisons. 5.3 ANTI-DUMPING DUTIES ON COTTON TYPE BED LINEN Being a member of EU, Sweden has been compelled to side with the anti-dumping proceedings and measures against Asia, Central Europe and Eastern Europe regarding agricultural policy, export subsidies and border protection, but necessary adjustments have been made to maintain its independent position and influence EU and WTO toward the liberalization of policies in EU.

8

Sweden opposed the definite anti-dumping duties on imports of cotton-type bed linen from Pakistan in 1997. Sweden also opposed the anti-dumping duties on import of Bed Linen from Pakistan during the Anti Dumping proceedings against Pakistan in 2004. 5.4 AMENDMENT IN EU REGULATION NO.1503/96 FOR EXCLUDING SUPER BASMATI FROM THE ELIGIBILITY OF ABATEMENT. The amendment in EU regulation to exclude Super Basmati from the eligibility of Abatement had important implications in view of growing demand of fine qualities of rice due to taste development of Swedish consumer as well as growing demand for Pakistani rice that was 3.74 metric tonnes in the year 2003-2004 compared to 2.3 in 2002-2003. Sweden has conveyed to the Commission to rescind its decision relating to Super Basmati to ensure Pakistan’s continuous exports of rice to Europe and particularly Sweden. Trade Policy Department was of the view that, ‘Sweden, together with some other EU member states, considers that the issue needs to be discussed further and that talks with the affected countries should be carried out so as to reach an acceptable solution’. Sweden opposed the amendment in the EU Regulation No. 1503/96 excluding super basmati from the eligibility of Abatement. 5.5 SWDEN’S SUPPORT TO GSP + MARKET ACCESS TO PAKISTAN A series of meetings were held to lobbying of GSP + market accesses to Pakistan. Resultantly, the Swedish Government expressed the following views: -

1. Sweden is in favour of a transparent and predictable system of Market Access to EU for developing countries and therefore, supports a simpler system of GSP for next ten years.

2. Previous system was simpler than the new proposal scheme. 3. The objectives & potential of the proposed system are not coherent with

the technical details of the documentation. Special and differentiated treatment of the Least Developed Countries does not seem to take effect under the GSP+ scheme due to intricate provisions and requirements of the system.

4. All alternatives under the vulnerability criteria will be considered. 5. Sweden will favour a three-year preparation time for the ratification of

the conventions. 6. January 2006 would be considered for implementation of the proposal. 7. There may not be any flexibility from Sweden on ILO conventions. 8. Sweden would be receptive to any alternative criteria that may suit other

Member States. 9. Pakistan may focus on lobbying with new Member States in order of

priority and in accordance with their voting strength. 10. Changing the proposal against the wishes of the Commission might not

be simple in view of,’ Internal Services’. 11. More pressure may be built up from EU Parliament, Traders and

Importers and Trade Associations.

9

12. Sweden will consider the alternatives to modify the proposed GSP+ system by keeping WITH IN the framework of Development and Sustainable Development.

13. Development criteria for graduation will be preferred. Lobbying efforts were further strengthened due to the visit of the Honourable Minister for Commerce to Stockholm and the meetings held with the Ministry of Trade and Foreign Affairs. Sweden supported Pakistan to qualify as beneficiary under the new GSP. 5.6 ANTI DUMPING PROCEEDINGS ON PAKISTAN PET Provisional Anti-dumping duty on PET Resin was notified in February 2004 at 14.8%. After the lobbying efforts by Pakistan Government and Private sector, the Commission corrected the arithmetic error as a result of which the Commission worked out the dumping duty at 6.5%. However, the Commission did not correct its methodology error which if corrected would have brought the dumping duty to zero. An urgent meeting was arranged with Mr. Håkan Söderlundh of Foreign Trade Policy with Mr. Shabbir Diwan of Gatron Industries Limited & Novatex Limited Karachi in Brussels to apprise the Swedish Authorities of the facts. Sweden opposed provisional Anti Dumping proceedings on Pakistan ‘s PET. 6. Sweden’s Global Imports Swedish industry is mainly an assembly industry, depending largely on imported goods, 70% of Sweden’s total imports are therefore, inputs for this industry.

Imports from 20 largest Countries of consignment (US $ million)

Ranking Country Value (Jan.-Dec) Share % Change % 2004 2003

2004 2003 2004 2003 2004/2003

Total 101,573 83,028 100 100 9 1 1 Germany 19,042

15,564 18.7 18,7 11

2 2 Denmark 9,167

7,534 9.1 9 4

4 3 Norway 7,362 6,724 8.1 7,2 4

10

3 4 United Kingdom 7,709 6,507 7.8 7,6 8 5 5 Netherlands 6, 821 5, 650 6.8 6,7 21 6 6 Finland 6,306

4,685 5.6 6,2 7

7 7 France 5,525

4,544 5.5 5,4 5

8 8 Belgium 4,135

3,561 4.3 4,1 -7

9 9 USA 3,709

3,264 3.9 3,7 8

10 10 Italy 3,365

2,874 3.5 3,3 14

12 11 Poland 2,535

1,901 2.3 2,5 2

14 12 Japan 2, 435

1,854 2.2 2,4 16

11 13 China 3, 256 1,835 2.2 3,2 5 15 14 Spain 1,626

1,344 1.6 1,6 43

13 15 Russia 2,530 1,253 1.5 2,5 -7 16 16 Ireland 1,451

1,248 1.5 1,4 -12

17 17 Austria 1,099

1,105 1.3 1,1 2

18 18 Switzerland 1,131

1,073 1.3 1,1 2

20 19 Hong Kong 365 886 1.1 0,4 10 19 20 Estonia 918 827 1.0 0,9 -3 The above table reflects the following: • Total imports to Sweden during Jan- Dec 2004 , were US $ 90 billion. • Imports increased by 3 % compared to a decline of 2% over the previous year. • With the exception of USA, Sweden’s top ten importing partners are EU and

Scandinavian Countries. Imports from EU countries increased by 4% except for UK with a decline of 7%.

• Imports from EMU countries increased by 5%. • Imports from African countries declined by 15%. • Imports from Germany and Denmark increased by 4% and 2% respectively. • Imports from Russia increased by 5 % compared with 165% during the last year. • Trade with other countries of accession with Europe, Latvia, Czech republic,

Hungary and Lithuania increased by 16 %. • High increases in imports were from China (35 %), Iran (65 %) , South Korea

(21 %) , Turkey (36 %) , Lithuania (46 %) and Hungary (37 %). • Major countries of import from Asia are Japan, China, Russia, HongKong, Iran,

South Korea Turkey and Taiwan. • Pakistan does not figure in the first 30 trading partners of Sweden as follows:

11

Country Value (Jan.-Dec) Share % Change % Pakistan

2004 84

2003 76

2004 0,1

2003 0,1

2004/2003 10

7. Sweden’s Global Exports The value of Sweden’s total exports during January-December 2004 was US$ 101, 573 million compared to US$ 101541 million during the period January- December 2003 with an increase of 3% during the previous year (US$98539). Engineering products comprise more than half of Sweden’s exports. Electronic equipment, machinery and motor vehicles are other important export goods. Other Electronics including communication and computer-related products are the fastest growing segment of Swedish exports. Large international companies such as Ericsson, ABB, Electrolux, Volvo and Saab account for nearly 70% of total industrial employment and approximately 80% of exports of manufactured products. During 2004, Exports to EU countries increased by 10% and North America and by 2% compared with 4% to EU and 4% to North America during 2003. 8. Competitor Analysis During the period 2004, Pakistan’s share in total Swedish Trade remained 0.1 % in keeping with the previous share. Similarly, India’s share of 0.3% remained constant. Both India and Pakistan, does not figure in first 30 countries of exports to Sweden. China’s share in total exports to Sweden increased from 2.2 % to 2.4 % and ranking improved from 13th to 11th. Iran ‘s share decreased from 0.8% to 0.5 0%. Turkey ‘s share improved from 0.6 % in 2002-2003 to 0.7% in 2004. Shares of other competitors are as under: - Share of Competitors in the Exports to Sweden 2003 and 2004

Country % Share 2003 % Share 2004 China 2.2 2.4 Turkey

0.6 0.7

Taiwan 0.6 0.6 Iran 0.8 0.5 Thailand 0.4 0.3 India 0.3 0.3 Malaysia 0.3 0.2

12

Bangladesh 0.2 0.2 Singapore 0.1 0.1 Pakistan 0.1 0.1 Sri Lanka 0.0 0.0 Our main competitors in export of bed wear are Turkey, India, China, Poland, and Czech Republic. Whereas China, Hong Kong, Turkey, Bangladesh, South Korea and India for ready-made garments. 9. Pakistan Sweden Bilateral Trade (Time Series Analysis) Year 2003-2004 is characterised with the highest bilateral trade reflected by highest growth in exports 23.3% and imports, 70.5% compared to the past 5 years. Pakistan's exports to Sweden during the period 1999-2004 have gradually increased except for the year 2002-2003. As depicted in the above graph below, exports from Pakistan to Sweden have steadily increased except for a high jump 23.3% in the year 2003-2004. In comparison, Pakistan's imports during the same period were stable except for enormous increase during 2003-2004 from US$ 39.5 million to US $ 67.5 million, mainly due to high demand of telecommunication equipment during the year 2003. High growth in imports perpetuated further in 2004 with a 70% growth. Pakistan’s Trade with Sweden during 1999-2000 to 2003-2004 (Value in million US$)

YEAR EXPORTS IMPORTS TOTAL TRADE BALANCE GROWTH IN EXPORTS

1999-2000 61.3 49.5 110.8 (+) 11.8

2000-2001 61.3 47.5 108.8 (+) 13.8 0 %

2001-2002 60.0 33.7 93.7 (+) 26.2 (2.14)%

2002-2003 58.4 39.5 97.9 (+) 19 2.7 %

2003-2004 72.0 67.4 139.4 (+) 4.6 23.3 %

13

Graph Pakistan’s Trade with Sweden during 1999-2000 to 2003-2004 (Value in million US$)

0

20

40

60

80

100

120

140

160

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

Exports Imports

Total trade

The balance of trade, in the period under consideration gradually declined from US$ 18 to US $ 4.6 but remained positive. The balance of trade has always remained positive: the maximum reached US $ (+) 26.2 in the year 2001-2002. 9.1 EXPORTS TO SWEDEN

Annual data for exports January- December 2000-2004 shows that exports have gradually increased except for a decline in the year 2002. Growth in exports was the highest at 23% during 2004.

Pakistan’s Exports to Sweden during 2002 to 2004 Jan-Dec. Jan-December 2000 to 2004 (Value in million US$) YEAR EXPORTS Growth 2000 58.8 - 2001 62.5 6.2 2002 57.2 -8.5 2003 62.7 9.6 2004 76.5 22.3

14

Pakistan’s major exports to Sweden during the year 2003-2004 were, Bed Wear, Ready-made Garments, Sports Goods, Knitwear (Hosiery), Cotton Fabrics, Apparel & Clothing of Leather, Made-up Articles of Textiles, Carpets and Floor Covering, Art silk/Synthetic Textiles and Rice. 9.2 IMPORTS FROM SWEDEN Pakistan’s total imports from Sweden during the year 2003-2004 were, US$67.4 million. As evident from the table below, Pakistan’s demand for imports from Sweden have been declining since the year 199-2000, except for a sudden rise in 2003-2004 with a growth rate of 70.5%. Trend in Imports from Sweden US $ million June – July 1999-2000 2000-2001 2001-20002 2002-2003 2003-2004 49.5 47.7 33.8 39.5 67.4 Main imports from Sweden during the year 2003-2004 included Newsprint, Transmission Apparatus, Cellular Mobile Phones with Battery, Chemical Products and, Pharmaceuticals, Wood Pulp paper & Board, Electrical machinery appliances/parts, Iron and Steel Equipment for distribution electricity. Paper, paperboard & articles, Gen. industrial machinery parts and equipment, transport vehicle, Iron & steel, Viscose fibre (Rayon fibre); Pharmaceutical products, Special machinery for particular industry, Surgical instruments, Pulp and waste paper, Dairy products & birds eggs, Transport equipments Non-ferrous metal, Gold unwrought, Pulp & waste paper, Power gen. mach./equip. & Others. A comparison of the major imports during the past two fiscal years shows that the only product with substantive continued demand since the past year was Newsprint. For other items, previous imports were negligible. For such developments major factors on supply side were strengthening of bilateral relations after the visit of the President of Pakistan in the year 2004, followed by a number of trade delegations from Sweden and award of contract for cellular phones to Ericsson from Sweden. On demand side, rising per capita income and consumer demand, growing industrial activity, further investments and growth of Engineering and other Heavy manufacturing sectors in Pakistan.

-100

1020304050607080

2000 2001 2002 2003 2004

ExportsGrowth

15

Pakistan’s Imports Demand from Sweden (Commodities) Value in US$ million

Commodities

2002-03 2003-2004

Newsprint in Rolls or Sheets

7.3 9.2

Transmission Apparatus 0.623 5.0 Cellular Mobile phone with battery

0.200 3.2

Chem. Wood Pulp semi Bleach/bleach

1.6 3.1

Automatic Circuit breaker

0.008 2.7

Sack Kraft Paper unbleached

0.275 1.7

Foil refined copp not backed

1.34 1.5

Mechanical Wood Pulp 0.948 1.4 Kraftiner uncoated un bleached.

0.687 1.3

Parts of Gas turbines 0.288 1.2 Gener set in Eng - 1.2

In order of value, Pakistan ‘s imports from Sweden are Engineering Products, Paper and paperboard, Chemical Products, Telecommunications appliances/parts, Equipment for distribution of electricity, Non Ferrous Metals, Non Electrical Machinery, Pharmaceuticals and Paper Pulp.

10. Product Analysis

Pakistan’s Exports to Sweden The following table depicts the statistics of the most important products of

exports from 1997-98 to 2002-2003. Year 2001-02 is taken as base year. A smooth graph also reflects the growth of the items under consideration.

16

Top Ten Commodities Value in ‘000’ Dollars

Order as 2003- 2004

Commodities

1999-00

2000-01

2001-02

2002-03

2003-2004

% Change

1 Bed wear

13204 12202 15327 12254 13832 12.9%

2 Readymade garments

5759 6537 5996 7514 11301 50.4%

3 Sports goods

4834 5194 3090 8203 8753 6.7 %

4 Knitwear (Hosiery)

4757 4018 3954 4539 7858 73.1%

5 Cotton fabrics 6373 4295 4693 5171 6094 17.8% Towels

3673 5448 4026 4161 4882 17.3%

6 Apparel and clothing of Leather

9085 10369 6695 3323 4236 27.5%

7 Made up articles of textiles

2943 2817 3646 3019 3055 1.2%

8 Carpets & rugs 3511 3373 2599 1831 2185 19.3% 9 Artsilk &

Synthetic Textiles

1,126 2152 91.1%

10 Rice

859 733 688 1200 1841 53.4%

17

Top five commodities

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-2004

US

'000

' Dol

lars

Bed wear Sports goods Readymade garments Cotton fabrics Hosiery

1.BED WEAR Bed wear is the main item of import to Sweden form Pakistan. Exports of bed wear during July –June 2003-2004 were US$ 13.8 million, which increased by 13% compared to a decline of 20% during 2002-2003. The volume of export of bed wear from Pakistan to Sweden increased from 15,000 tonnes to 18000 tonnes in the year 2000-01 to 2001-02 however, the total value of exports was the same due to shift to lower price categories. The highest import value was US $ 17.65 in 1997-98. The trend has been declining except for 25% increase in value during the year 2001-2002 and 2003-2004.

18

One of the reasons for lower exports is lower average price by Pakistani exporters. A few suppliers previously exporting to US market desperate to penetrate to Scandinavian market depressed the prices. Per capita expenditure on household textiles in Sweden is ECU 104.9, the second highest in Europe followed by Denmark (ECU 134). The average import prices of bed linen imported to Sweden in ECU ranged from the highest 12.72 France, Turkey 7.45 and Pakistan 5.73. Swedish market for beds wear was ECU160 million in the year 2004. 2.READY MADE GARMENTS Previously positioned at 3rd Ready Made Garments has improved in 2004 to 2nd largest item of export from Pakistan to Sweden with a value of US$ 11.3 million due to consistent high growth in past two years. Exports of ready-made garments grew by 50.4 % during the year 2003-2004 and 25% during 2002-2003 with a previous decrease of 8.3% in 2001-2002. The trend during the 90 ‘s was also declining, the lowest in 1999-2000. A few contributory factors towards higher exports during 2003-2004 were; modernisation of garments manufacturing industry to meet international standards, huge quantities of Cat. 6 procured by H & M (A Sweden based Chain store), setting up of more representative offices of Swedish Garments Companies, MQ, Lindex etc. 3.SPORTS GOODS Since 1998-1999, the trend of exports of Sports Goods has been increasing with in the range of 6% -17% per year. However, during the year 2002-2003, the increase was fabulous- a three fold higher exports and a growth of 166% that did not sustain, as the growth for the year 2003-2004 is meagre, 6.7% compared to the previous year. Current US$ 8.7 million, was achieved due to strenuous efforts of Pakistan Sports goods industry, Trade Associations, Manufacturers, Government Agencies and International organisations to restore the good image by successful implementation of International projects for elimination of child labour. Investments in the Sports Good Industry to meet international requirements also helped to boost the exports during the year 2002-2003 and sustain the growth during 2003-2004. Most of the Swedish importers are diverting to China and Taiwan for quality and price. Additionally, a number of Swedish / EU companies have set up their own manufacturing facilities in China. 4.KNITWEAR HOSIERY Currently US$ 8.86 million a sharp rise of 73.1% in 2003-2004 is observed in export of Knitwear Hosiery to Sweden. Although overall exports of Hosiery declined from Pakistan by 5.9% Exports to Sweden remained satisfactory at 14 %.

19

Opening of liaison offices of leading Swedish Garment companies in Pakistan coupled with efforts for further marketing including quality, more information, visit of delegations, single visits, participation in fairs had a positive impact on growth. 5.COTTON FABRICS During 2003-2004, Exports of Cotton Fabrics to Sweden were US $ 6.0 million with a growth rate 17.8 % much higher to 10 % during 2002-2003 and 2001-2002. The increase in value of Cotton Fabrics have sustained despite fall in average per unit price from US $ 0.77 to US $ 0.73. Cotton Fabrics imports were almost double during 19997-98 with a much higher average price per unit at US $ .1.17 compared to the current value of exports and price per unit. One of the main buyers of Pakistan’s quality cotton fabrics is IKEA (A Sweden based Chain store). 6.TOWELS After a sharp downturn in 1999-2000 and 2001-2002 (A -26 % change) the exports of towels have shown an increase of 3 % during 2002-2003. Towels, the fourth highest product of exports to Sweden during 1997-98, has now become moved down to sixth position. Value of export have almost halved during 1997-2003 over a period of six years. 7.LEATHER GARMENTS During 2003-2004 total export of Leather Garments to Sweden was US $ 4.2 million. A growth of 27.5% is a sign of revival and encouraging keeping in view a consistently declining trend since 1997-98 onwards. During the previous year exports of Leather Garments decreased by 50% adding up to 42% decline in 2001-2002. From 3rd position in 1997-98 the product has moved to 7th place in 2002-2003. As the Leather Garments are grouped under Fashion Clothes, fashion trends play important role in determining the demand. Fashion forecasts in the year 2003 predicted a higher demand of Leather Garments in fall/winter 2004-2005. The same was mentioned in the annual report by the Commercial Section Stockholm Sweden 2003. 8.MADE UP ARTICLES OF TEXTILES Currently at US$ 3.1 million, the growth in exports of Made up Articles of Textiles has picked up at 1.2% compared to decline of 17 % during 2002-2003. The year 2001-2002 was marked with growth of 29%. During the past five years, the overall trend has been constant with variations up to +/- 30 %.

20

9.CARPETS AND RUGS Currently US$ 2.2 millions, Carpets have shown an encouraging growth of 19.3 % during 2003-2004 in contrast to decline in the past years. After reaching a peak in 1999-2000, exports of Carpets and Rugs had a decreasing trend until 2002-2003. Carpets are essential part of interior and are considered as exotic luxury in Sweden. A number of factors affecting the demand of carpets including ; taste and trends, consumer’s preferences, income distribution etc. Lately, the trend for oriental carpets has revived in Sweden. 10. Art silk & Synthetic Textiles Previously not in the top ten items of exports to Sweden, exports of this product have grown by 91.1 %, during 2003-2004 with a total value of US$ 2.2 million. 11.Rice

Though 11th in the ranking of exports from Pakistan to Sweden, Rice is a very important product with a great potential for growth. During 2003-2004, exports of Rice to Sweden were US$ 1.841 million with a growth of 53.4 %. The year 2002-2003 had an increase of 74% reaching to the highest in the past six years. Export price of rice per kg from Pakistan was US $ 0.62 in 1997-98 gradually coming down to the lowest, US $ 0.46 in 2001-2002, again improving to US $ 0.46 in 2002-2003 and US $ 0.49 in 2003-2004. The retail price for polished rice in the local market is almost US $ 1.00 for ordinary rice and in the range of US $ 1.50 to US $ 2.00 per kg for good quality Basmati rice.

As estimated by Swedish Board of Agriculture, total per year consumption of rice in

Sweden has increased from 27,700 tons in 1996 to 43,500 tons in 2001-2002. The per capita consumption of rice increased from 1 kg in 1960 to above 4 kg in 2002.

The share of Basmati rice in the total import of rice in Sweden has increased from

nil, six years back to 28 % in 2004. India and Pakistan being the main suppliers. Pakistan’s exports of rice to Sweden are likely to grow in future in view of recent

investment of a Pakistan origin company in polishing and milling unit for rice with a 28000 tons capacity in Åhus, at the south east port of Sweden.

Another important company K-2 based in Uppsala, has also started importing rice

from Pakistan since the end of 2004. Due to good business ethics the company is likely to succeed in selling huge quantities.

21

11. Trade Promotional Activities A. Business Meetings 1. Anti- dumping investigation against Pakistani Cotton –type Bed linen to Sensitise to Pakistan’s position to the representative of Swedish Government to the Committee of Member States, a meeting was held with International Trade Policy Department, Ministry of Foreign Affairs on January 8, 2004. Ambassador Mr. Shahid A. Kamal, Mrs. Anjum Assad Amin, Commercial Counsellor, Mr. Håkan Söderlundh, Deputy Director, Mr. Björn Nellhede, Counsellor, Ms. Cecilia Lif, Senior Administrative Officer from International Trade Policy Department, Ministry of Foreign Affairs, Ms. Ailda Fridh and Ms. Helena, Senior Research Officers from National Board of Trade joined the discussions. The background of the subject issue and Pakistan’s position was conveyed to further request to EC to reconsider the issue and terminate the present proceedings without the imposition of anti-dumping measures. An Aide Memoire, based on the brief note of the above letter was presented to the meeting. 2. Amendment in EU regulation No1503/96 excluding Super Basmati from the eligibility of Abatement. The meeting was held in order to sensitise to Pakistan’s position to the representative of Swedish Government to the Committee of Member States, with International Trade Policy Department, and Ministry of Foreign Affairs on January 8, 2004. Ambassador Shahid A. Kamal, Mrs. Anjum Assad Amin, Commercial Counsellor, Mr. Håkan Söderlundh, Deputy Director, Mr. Björn Nellhede, Counsellor, Ms. Cecilia Lif, Senior Administrative Officer from International Trade Policy Department, Ministry of Foreign Affairs. Ms. Ailda Fridh , Ms. Helena, Senior Research Officers from National Board of Trade attended the meeting. As a follow up of the meeting, Ms. Cecilia Lif informed that, ‘Sweden, together with some other EU member states, considers that the issue needs to be discussed further and that talks with the affected countries should be carried out so as to reach an acceptable solution’. Sweden opposed the amendment in the EU regulationNo1503/96 excluding Super Basmati from the eligibility of Abatement. 3.Meeting with Ms. Maija Tasa Aun, Economic and Commercial Affairs, Embassy of Estonia on 27.08.04 to discuss the tools and techniques of export promotion in Sweden. 4.A meeting was on Anti- dumping investigation against Pakistani Cotton –type Bed linen with Mr. Håkan Söderlundh, Deputy Director, and Ministry of Foreign Affairs on April 30, 2003. Mr. Bo Esselius, Senior Research Officer, National Board of Trade was also present. An Aide Memoire, based on the brief note as per enclosure of the above letter was presented to the meeting.

22

5.Meeting held with Ravindra Parasnis, Regional Parasnis of Swedish Trade Council in Stockholm to brief him about the latest developments in the economy of Pakistan and to explore the opportunities for further cooperation. Ambassador and myself participated in the meeting. 6. Meeting with Mr. Waseem Mehr Chief Executive of Mehr Enterprises, Gujranwala, an exporter of quality Basmati, IRRI-9 and IRRI-6 from Pakistan to Sweden was facing difficulties in determination of classification of Super Kernel Basmati Rice, IRRI-9 and IRRI-6 by the Swedish Customs. European Commission informed Pakistan Mission to European Communities that as IRRI- 6 and IRRI-9 are long grain rice. Their findings were based upon the websites of a few Pakistani exporters of rice who advertised / marketed IRRI – 9, IRRI- 6 as long grain. Swedish authorities were informed to make necessary adjustments. 7. Meeting with Ms. Lina Nertby from Stockholm Chambers of Commerce the contact person for all the trade promotion activities for the Embassies with the Chambers and further coordination with the Stockholm Massan. Discussion was held to determine the strategy to organise the trade promotion activities during the year. It was concluded that Pakistan may consider participation in the Formex , Skydd and Goda Kitchen during 2004. 8.AntiDumping meeting on PET held on June 11, 2005. An urgent meeting was arranged with Mr. Håkan Söderlundh of Foreign Trade Policy with Mr. Shabbir Diwan of Gatron Industries Limited & Novatex Limited Karachi in Brussels to apprise the Swedish Authorities of the facts. Sweden opposed provisional Anti Dumping proceedings on Pakistan ‘s PET. 9.Meeting with Mr. Mauri Malveholm, Chief Executive of SWEFLY AB for provision of information regarding Business/Investment Venture for Allama Iqbal International Airport Lahore. Provided the status of services such as ground handling companies, fuel suppliers, catering suppliers, cargo services, and hotels for crew. 10.Meeting with Mr. Mansour Safa of Orient Mattor (Carpets), Stockholm on August 30, 2004. Mr. Safa is importer of Pakistani,’Peshawari’ type carpets from Sh. Mohammad Hanif & Company, Karachi. His partner, Mr. Mahzoon mahmoud, of Orient Mattor, Linkoping Sweden, facilitated in issuance of necessary business visa. Orient Mattor are regular buyers of Pakistani Carpets. Mr. Safa along with Mr. Mahzoon was invited to attend Expo, to be held in Karachi in February 2005. 11.Meetings of Mr. Waseem of Mehr Enterprises, rice exporters were arranged with a leading and growing Food Chain Willy’s, (Axfood). 12.Meeting with Mr. Bjorn Palmqvist Manager H & M on 6.09.2004.H & M’s current exports from Pakistan are over 3 million tousers @ 7 dollar /piece, 21-24 million dollar to all over world, especially Europe. However, only 10 % of their exports from Pakistan are destined to Sweden that amounts to US $ 2.4 Million.

23

H & M intend to increase their procurements from Pakistan. They plan to close down their operations from Mauritius and Turkey. Their current focus is on trousers, Category 6. Currently their main suppliers are Soorty Enterprises, Karachi and Leglar Nafees Lahore. Mr. Bjorn Palmqvist mentioned the problems with withholding tax and visa. Necessary actions were taken to solve the problems. 13. Meeting with Mr. Wang 17.09.2004 Mr. Wang along with his partner intended to set up a unit of polypropyline in Karachi or Sialkot. Necessary information was provided for investment opportunities in this sector. 14. Meeting with Hakan Söderlund and Mr. Raashid Anwar Lawyer (M/S Gul Ahmed Textile Mills Karachi) 20.09.2004In order to sensitise Pakistan’s position to the representative of Swedish Government to the Committee of Member States, a meeting was held with International Trade Policy Department, Ministry of Foreign Affairs on September 20, 2004. Besides myself and tan and Mr. Raashid Anwer, Mr. Håkan Söderlundh, Senior Advisor, Mr. Björn,Nellhede, Counsellor International Trade Department, Ministry of Foreign Affairs and Mr. Bo Esselius Senior Adviser Customs Union Department, National Board of Trade participated. 15.Meeting with Mr. Mikael Kubu, the CEO / Attorney at Law of Ackordscentralen Stockholm AB, a company dealing with bankruptcies and legal matters of the dying industries. Mr. Kubu informed that phasing out industries are auctioned at a short notice and it would not be feasible for any one based in Pakistan to participate in such auctions. 16. Meeting with Mr. Yawar Mian of Captial Traders, (21.10.2004) Mr. Mian is journalist recently moved from Dubai to Sweden, aspiring to start trading between Pakistan and Sweden. All the information, i.e., address lists and product briefs provided. 17. Meeting on New GSP Proposal Stockholm (26.11.04) This was one of the preliminary meetings to sensitise Pakistan ‘s position and to have the feed back on the New GSP proposal from the representatives of Swedish Government to the Committee of Member States was held on November 26, 2004 with the Ministry of Foreign Affairs and International Trade Policy Department. Among the participants were Ms. Carin Lindunger, Deputy Director International Trade Policy Department Ministry of Foreign Affairs, Ms. Christina Linnarud, Desk Officer, Department for Asia and the Pacific Ministry of Foreign Affairs and Mr. Magnus Nikkkarinen, Analyst Global Trade Department, National Board of Trade. Ms. Caroline Däcko, represented Associate from Sidley Austin Brown & Wood LLP Brussels. I presented the case of Pakistan to the meeting according to the ‘Paper re the position of Pakistan under the current proposal for the new GSP Scheme’ and the briefing by Economic Minister Brussels. 18.Preliminary meeting on New GSP PROPOSAL, RIGA (Latvia) (3.12.04)

24

As above, a preliminary meeting to sensitise Pakistan ‘s position on the New GSP proposal was held Ms. Inga Ernstsone, Head of International Trade and Investment Division and Ms. Marta Veikeniece, Senior Desk Officer International Trade and Investment Division. I presented the case of Pakistan to the meeting according to, ‘ Three options presented by Pakistan for amendment in the European Commission’s – Proposal on GSP Submitted to Member States’. Latvia supported Pakistan to qualify as beneficiary under the new GSP Scheme. B. Business Visits 1 Visit to Åhus, Malmo for inaugeration of Amanat Nawaz Rice Mills. Governor of Åhus and the representatives of Invest in Sweden Agency were present. Other partners in the investment include Mr. Jehan Zeb, Oslo and Mr. Mussarat Chaudry Bradford; UK.Other Pakistan based businessmen from all over the Europe attended the event. 2. Study tour to Gälve on April 15, 2004. Participated in a one-day arranged by Chambers of Commerce for Commercial Counsellors. Local units producing tea and coffee were visited. The visit provided a good opportunity for much needed interaction with the local industry. 3. Meeting with Roki Textilier AB Jonkoping , importers of Towels and Bed Sheets from Pakistan. Currently they are deviating from Bed Sheets to Dockers/ Workwear/ Trousers and Woven Shirts and Sports wear. Met Roki Met with Mr. Anwar Chaudhry, Chief Executive, Ms. Rokhsaneh Chaudhry Senior Manager and Mr. Asim Chaudhry, Textile Designer. Discussions were held on the decreasing trend of exports of Towels from Pakistan to Sweden. Discussions were held regarding Bed Wear as the exports from Pakistan to Sweden have been declining in value terms more than the quantity. 4. Meeting with Carin Lind, Vice President Jönköping Chambers of Commerce Commerce Jönkoping to to discuss the overdue payment from M/S Jeltex, Sweden to M/S Y. Ensaf Sialkot for USD 9242.50 who sent their merchandise to M/S Jeltex Sports Anderstorp Sweden. Being a private organisation, Chambers could not help. 5.Visit to Estonia, August 9, 2004 to meet with the desk officer for Pakistan in the Ministry of Foreign Affairs, Ms Inga Poldma and Ms. Pille Unger to brief them about the economic developments in Pakistan and the high growth rates achieved during past few years. Possibilities of trade promotion for various commodities, e.g. Cotton Fabrics, Bed wear, Knitwear Artsilk synthetic Textiles discussed. Ms. Poldma intimated the progress regarding the Draft Agreement for Avoidance of double taxation that is under consideration with the Ministry of Finance Tallin. 6.Study Visit to IKEA, Findus and other companies, 6-8 October, 2004 Visit to South of Sweden was arranged by Chambers of Commerce Stockholm. Participants from 26 countries included Ambassadors and Commercial Counsellors. Visited IKEA, Findus, Diab, GARO AB, Gnosjö Muncipality and

25

East Sweden Chamber of Commerce Linköping. This visit was informative and helped contact building with the industry. C. Fairs 2004

1. Visited the Stockholm Furniture Fair held from February 4-8, 2004. Brochures and visiting cards of the relevant importers collected and forwarded to EPB and Associations. 2. Visited Boat Show Feb 28-7 March 2004 at Stockholm Massan. Information provided to EPB. 3.Visited Nordic Garden Fair 1-4 April 2004 at Stockholm Massan and information provided to EPB. 4. Pakistan ‘s official participation in the Formex Fair held in Stockholm Mässan August 19-22, 2004. M/s Adnan Apparel Karachi, M/s BIL Exporters, Karachi, and M/s Hasham Towels, Karachi participated. 5.SKYDD, 21-24, Exhibition of Work wear and Safety, Stockholm Massan. Prestige Apparel, Karachi and Scantex, Karachi participated. M/S Immi Garments Lahore dropped at the last moment. Both Prestige and Scantex had ample marketing opportunities due to prominent and strategic location of the stall. Both the companies reported having established long term contacts with the Swedish importers. 6.Participation in Food & Beverages Fair (Göda Köket), November 12-14, 2004 By Stockholm Chambers of Commerce in cooperation with the Stockholm International Fairs Pakistan had a sponsored a stand at the fair. The fair is visited by 35 000 consumers and food related visitors. M/S Imran Traders Multan, exporters of Fresh Fruits, Vegetables, Rice, Lentils and Spices in collaboration with a local Restaurant Lilla Karachi represented the stall. 7.Expo 2005 The following steps taken to market the fair: - • Information circulated to all Chambers and Trade Associations through e-

mail in October • Important importers /buying houses contacted telephonically to visit Expo

2005 in October • Address lists of important business contacts sent to DG EPB- October 29. • Display of Posters in the Embassy in November • Address lists of more than 500 addresses of importers of Core and

Development Sectors covering the following products on floppy sent to VC EPB- November 25.

The invitations were extended without any financial implications for the Government of Pakistan. Ministry of Commerce and EPB duly informed about the progress. Invigorate efforts were continued to persuade Traders, Importers and Investors to attend Expo 2005.

26

D. Seminars 1. Trade and Investment Opportunities in Pakistan, at Stockholm University March 16, 2004. Represented Pakistan as a speaker at Stockholm Business School, University of Stockholm on Sweden Asia Business Education Centre (SABEC) day. Presentation highlighted recent Trade and Investment Opportunities and improved Economy of Pakistan.

2.Code of Conduct For Foreign Companies in Developing Countries from a human Rights perspective’ on 24.08.2004 by Stockholm Chambers of Commerce. Focus of the seminar was the rights provided by International Human Law, International Humanitarian Law, Code of Conducts, General Obligation, Equal Opportunity and Non Discriminatory treatment, Security of persons, Workers Respect for National Sovereignty, Consumer Protection and Environment Protection. 3.Attended a Seminar /Conference on sponsoring Partners AUGUST 17, 2004, Third Meeting of Sponsoring Partners of the Global Water Partnership Organization (GWPO)-Stockholm 4. Seminar on ’Open Trade Gate Sweden’ by National Board of Trade 2.9.04 National Board of Trade that is a government agency to provides the Government with analyses and recommendations on trade policy. Director General Mrs. Elizebeth Tulen opened the seminar. Ms. Urika and Mr. Marcus Hellqvist together gave the presentation of the services being offered by the National Board of Trade under ‘SOLVIT’. 5.Seminar in Stockholm Chambers on September 8, 2004 to evaluate sponsored participation of developing countries in the exhibitions. Focus of the seminar was evaluation of participation in Formex held in August 2004. 6.Euro China Forum Conference Stockholm (November 11-12, 2004) A two day seminar held at Stockholm School of Business Management by Academia Sinica in Shanghai the forum aims to draw attention to sweeping reforms within political, financial, scientific and social arenas taking place in Chain and addresses how these reforms will affect and relate to the European Union and its member states current political stance. Participation in this conference provided an opportunity to get an insight in the latest developments in China with reference to EU. 7. Rig’s Partners, Economic Diplomats’ Conference at Rig, Latvia (02.12.04) Mr. Gundars Bojars, the Chairman of the Riga City Council opened the conference. Mr. Andris Liepins, Under Secretary of State, Ministry of Economics, Mr. Andris Teikmanis, Under Secretary of State, Ministry of Foreign Affairs, Mr. Leonids Loginovs, Chairman of Riga Free Port Authority, Mr. Andris Ozols, Director of the Latvian Investment and Development Agency (LIDA) represented the Latvian Government.

27

E. Delegations 1. State Visit President of Pakistan visited Stockholm from July 4- 6, 2004. Relevant programme included: - • Business Seminar, ‘Changing Institutions – Pakistan and the Challenges

of the Twenty- First Entury’addressed by President Pervez Musharraf at Stockholm School of Economics. Over 120 economists, diplomats, businessmen and press journalists attended the seminar. The event was organised by Stockholm International Peace Research Institute (SIPRI) and Stockholm Institute of Transition Economics (SITE). Commercial Counsellor coordinated the organisation of the seminar. Ambassador Rolf Ekeus, OSCE High Commissioner on National Minorities, Chairman of the SIPRI governing Board welcomed the President.President Pervez Musharraf spoke about the Economy of Pakistan, Growth Rates over last five years, Pakistan’s role in war against terrorism, empowerment of women, Human Rights, Child Labour and other current issues.

• President’s Business Meetings with Mr. Kenth- Åke Jönsson, Group

Senior Vice President Saab AB, Mr. Leif Kempe, Director Export Finance SAAB AB and Mr. Olle RYD, Director General of Swedish Export Credit Guarantee Board.

• President’s meeting with Mr. Anders Scharp, Board Member of Invester AB and the host of the business dinner at the Grand Hotel.

• Business Dinner with the business community hosted by Mr. Anders Scharp. Almost 30 companies were invited to the dinner. 5.07.04

• Breakfast meeting hosted by the Swedish Trade Council and chaird by Mr. Ulf Dinkelspiet, President of the Council. 6.07.04. President addressed the meeting after the breakfast.

• Delegation of Parliamentarians Commercial Counsellor was responsible

to coordinate the visit of Dr. Shahzad Wasim, Senator, Chairman Standing Committee Cabinet & Establishmnet, Mr.Amin Aslam malik, Member National Assembly and Ms. Hina Rabbani Khar, Member National Assembly. .

• Informal Meeting and boat trip with the President. A limited group of

Government Servants, friends of President and MNA’s were invited by the President for an after dinner boat trip on July 5, 2004. Commercial Counsellor had opportunity to directly meet and talk to the President. In response to President’s questions, Commercial Counsellor briefed him about the Wasa Ship, Skansen and Grona Lund.

28

2.Visit of Honourable Minister for Commerce to Stockholm, 16- 17 December 2004 Mr. Humayun Akhtar, Minister for Commerce visited Stockholm to lobby New GSP Scheme. He was accompanied by Mr. Tariq Iqbal Puri, Minister, Pakistan Mission in Brussels. The programme included: - • A breakfast meeting with the State Secretary for Trade Ministry of Foreign

Affairs Division, Mr. Lars Olof Lindgren was held. • A meeting of the Minister with multinational companies of Sweden was

arranged the same day. • The Business meeting was followed by interview of the Minister by the

leading newspapers of Sweden Aftonbladet and Svenska Dagbladet. 3.Visit of Pakistan Railways Delegation, August 4-5, 2004-08-06 Led by Mr. Ghaus Bux Mehr, Minister of Pakistan Railways the delegation included Gen.® Hamid Hassan Butt, General Manager (M & S), Pakistan Railways, Mr. Ashfaq Ahmad, Mr. Saeed Akbar Maher, Pakistan Railways and Mr. Mahtab H. Mohiuddin, Executive Director Equinox Marketing (Pvt) Ltd / Panasian Group Pakistan to have meetings with Bombardier Transportation (Signal) AB, Sweden. Delegation visited Klara Traffic Control Centre, demonstration of an Ebilock CBI in operation at Liljeholmen, Demonstration of PC based Local Control System, visit to Strängbetong Slipers Factory in Kungsörat, A VI Maskiner – Flexible track Machines.

4.Visit of Mr. Tariq Malik of Al- Ahmad Enterprises. The following meetings were organised: - • Grönsakshallen Sorunda in Stockholm (dry nuts etc.) • Abdul Qayyum in Uppsala • Mattias Peterson – OLW in Stockholm (dry nuts etc.) • R. Lundberg AB in Malmö (dry nuts etc.) • Orminge Hälsobutik in Stockholm (salt lamps) F. Miscllaneous Subscription to Kompass Commercial Section has subscribed to Kompass. The information retrieved from Kompass is being regularly used in office and being disseminated to exporters and EPB. Subscription to Kompass has enabled this office to meet the requirements of Pakistani exporters for provision of latest information / addresses of the importers in Sweden. Information on Fan and Furniture required by EPB As desired by EPB, the above information was provided within two days of asking. Fan and Furniture, included 28 items as subgroups and due to limitations of staff, it was not so easy to collect and compile the information in two days.

29

12.Recommendations / Proposals In order to further boost Pakistan’s exports to Sweden the following steps may be initiated:

1. Currently there is no direct PIA flight to Sweden. This affects the cost of air shipments, especially fruits and vegetables that are being indirectly exported through Frankfurt, Rotterdam or London. For such consignments, uncertainties and delays can not be afforded. In view of growing demand for ethnic fruits (Mangoes) and vegetable, the advantage may be fully materialised with direct flights either by PIA or other airline from Stockholm. This will also increase the frequency of travel of Sweden based passengers to Pakistan thus opening many avenues for investments and boosting of exports. Government Policies may be adjusted to encourage Foreign Airlines to operate their flights to Pakistan.

2. Sweden is an important market to target in view of one of the highest per capita income, high consumer power, stable economy and good business practices. Pakistan may take this opportunity to market food products specially Basmati rice and food mix/spices/pastes. India has recently launched its food mixes through one of the leading companies Santa Maria through franchising. Another item selling very well from India is rough finish furniture with a slightly antique look. Also, ‘Indiska’ has come up as a growing chain store in Sweden selling everything exotic including garments, silk scarves, accessories, interior, music, gifts and shoes at low prices.

3. Government or Chambers at appropriate level may invite semi official delegations comprising of investment companies, chain stores, agents and trade promotion organisations from Sweden to visit Pakistan. Visits of incoming delegations from Pakistan to Sweden are not as effective due to a number of factors; lack of prior planning, frequent changes in arrival schedules, delayed information etc. It is hard to secure a meeting with Swedish companies and nearly impossible to revise or postpone. Generally Purchase Directors of Swedish companies are busy visiting exhibitions and travel abroad. An outgoing delegation from Sweden to Pakistan will ensure participation of interested companies who will be keen to do business with Pakistan. Besides it will be an opportunity to dispel and correct the biased image of Pakistan created by press and media.

4. Since a number of European companies have huge investments in manufacturing in China, EU considerations to impose barriers and restrictions may not prevail due to inherent interest of European Companies in Chinese origin goods. This implies that Pakistani manufacturers will have tough competition from China in sportswear, sports goods garments and knitwear. In the long term, similar interests may be created for Pakistan by encouraging European companies to invest in Pakistan.

5. Commercial Section Stockholm is responsible to look after four EU countries, Sweden, Finland, Estonia and Latvia. Support staff of Commercial Counsellor includes one Secretary and one Messenger.

30

While Commercial Section of Embassy of India is only accredited to Sweden and Latvia, total manpower is 5 members. Similarly, Malaysia is accredited to only Sweden and Norway but total manpower is 5. Staff strength of Commercial Section Stockholm is not in proportion to the responsibilities and given workload. Posting of required staff will increase the commercial activities resulting in higher output.