wto training worskhop final presentation

8/14/2019 Wto Training Worskhop Final Presentation

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International Trade and theInternational Trade and the

WTOWTO

ByBy

WTO CellWTO Cell

Trade Development Authority ofTrade Development Authority ofPakistanPakistan

33rdrd September 2008September 2008


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International Trade and theInternational Trade and the

WTOWTO WTO An IntroductionWTO An Introduction

GATT:GATT: Negotiations on Agriculture in the WTONegotiations on Agriculture in the WTO

NAMA Negotiations in the WTONAMA Negotiations in the WTO

GATSGATS

TRIPSTRIPS

Regulatory Framework in Pakistan & NTCRegulatory Framework in Pakistan & NTC

RegionalismRegionalism WTOs Dispute Settlement MechanismWTOs Dispute Settlement Mechanism


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ByBy

Abdul Aleem KhanAbdul Aleem Khan

Economist, Advisory Unit,Economist, Advisory Unit,

WTO Cell, TDAPWTO Cell, TDAP

WTO An IntroductionWTO An Introduction


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WTO WTO An IntroductionAn Introduction The World Trade Organization (WTO) is the principalThe World Trade Organization (WTO) is the principal

international organization governing world trade.international organization governing world trade.

It was established in 1995 as a successor institution toIt was established in 1995 as a successor institution tothe General Agreement on Tariffs and Trade (GATT)the General Agreement on Tariffs and Trade (GATT)which was a post-World War II institution.which was a post-World War II institution.

WTO has 153 member countries, representing 95% ofWTO has 153 member countries, representing 95% ofworld trade.world trade.

It aims to provide fair and stable conditions for theIt aims to provide fair and stable conditions for theconduct of international trade with a view toconduct of international trade with a view toencouraging trade and investment that will raise livingencouraging trade and investment that will raise living

standards worldwide.standards worldwide.

WTO is a forum where countries continuously negotiateWTO is a forum where countries continuously negotiateexchanges of trade concessions to further lower theexchanges of trade concessions to further lower thetrade barriers all over the world.trade barriers all over the world.


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WTO WTO An IntroductionAn Introduction(cont. 2)

(cont. 2)

Decisions within the WTO are made by memberDecisions within the WTO are made by membercountries, not by staff and by consensus, not bycountries, not by staff and by consensus, not byformal vote.formal vote.

High-level policy decisions are made by theHigh-level policy decisions are made by the

Ministerial Conference, which is a body of politicalMinisterial Conference, which is a body of politicalrepresentatives (trade ministers) which meet atrepresentatives (trade ministers) which meet atleast every two years.least every two years.

Operational decisions are made by the GeneralOperational decisions are made by the GeneralCouncil ( representative from each memberCouncil ( representative from each membercountry) which meets monthly and chair rotatescountry) which meets monthly and chair rotatesannually.annually.


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WTO WTO An IntroductionAn Introduction(cont. 3)

(cont. 3)

GATT came into force in1948 with 23GATT came into force in1948 with 23

founding members.founding members.

It was intended to promoteIt was intended to promote

nondiscrimination in trade among countries,nondiscrimination in trade among countries,

with the view that open trade was crucialwith the view that open trade was crucialfor economic stability and peace.for economic stability and peace.

Different trade rounds were held so as toDifferent trade rounds were held so as to

liberalize the trade.liberalize the trade.


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GATT and WTO Trade RoundsGATT and WTO Trade Rounds 11stst Round -Round - Geneva in 1947Geneva in 1947

23 Countries participated23 Countries participated

Decided to cut 45,000 trade tariffsDecided to cut 45,000 trade tariffs

22ndnd Round -Round - France in 1949France in 1949


Proposed further reductions in 5,000 tariffsProposed further reductions in 5,000 tariffs

33rdrd Round -Round - Britain in 1950-51Britain in 1950-51


Proposed further reductions in 8,700 tariffsProposed further reductions in 8,700 tariffs

44thth Round -Round - Geneva in 1955-56Geneva in 1955-56


Proposed to Cut Custom Tariffs with a total value of US$2.5 bnProposed to Cut Custom Tariffs with a total value of US$2.5 bn

55thth

Round -Round - (Dillion Round) in Geneva in 1960-62(Dillion Round) in Geneva in 1960-6226 Countries participated26 Countries participated

Proposed to cut 4,400 tariffs covering US$.9 bn worth of tradeProposed to cut 4,400 tariffs covering US$.9 bn worth of trade

66thth Round -Round - (Kennedy Round) in Geneva in 1964-67(Kennedy Round) in Geneva in 1964-67


Decided on substantial tariffs reductions on all industrial productsDecided on substantial tariffs reductions on all industrial productscovering US$40bn of trade.covering US$40bn of trade.


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GATT and WTOGATT and WTOTrade Rounds Cont 2Trade Rounds Cont 2

77thth RoundRound -- (Tokyo Round) in Geneva in 1973-79(Tokyo Round) in Geneva in 1973-79 102 countries participated102 countries participated-Customs cuts averaging 20% to 30% covering US$300 bn-Customs cuts averaging 20% to 30% covering US$300 bn

- Improved framework for subsidies, customs rates and- Improved framework for subsidies, customs rates and technical obstacles to trade.technical obstacles to trade.

88thth Round -Round - (Uruguay Round) started in Uruguay ended in Morroco 1986-94(Uruguay Round) started in Uruguay ended in Morroco 1986-94

123 countries participated123 countries participated

The round led to the creation of WTO, and extended the range of tradeThe round led to the creation of WTO, and extended the range of trade negotiations,negotiations,leading to major reductions in tariffs (about 40%) andleading to major reductions in tariffs (about 40%) and agricultural subsidies, anagricultural subsidies, anagreement to allow full access for textiles andagreement to allow full access for textiles and clothing from developing countries, andclothing from developing countries, andan extension of intellectual propertyan extension of intellectual property rights.rights.

99thth Round -Round - (Doha Round) started - in Doha in 2001 ( at forth Ministerial Conference)(Doha Round) started - in Doha in 2001 ( at forth Ministerial Conference)

- in Cancun in 2003 (at fifth Ministerial Conference)- in Cancun in 2003 (at fifth Ministerial Conference)

- in Hong Kong in 2005 (at sixth Ministerial Conference)- in Hong Kong in 2005 (at sixth Ministerial Conference)

- in Geneva in July 2006 (at seventh Ministerial Conference- in Geneva in July 2006 (at seventh Ministerial Conference Not yet concluded.Not yet concluded.

141 countries participated,141 countries participated,

Subject covered are tariffs, non-tariffs measures, agriculture, labour standards,Subject covered are tariffs, non-tariffs measures, agriculture, labour standards,

environment, competition, investment, transparency, patents etc.environment, competition, investment, transparency, patents etc.


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WTO AgreementsWTO Agreements Agreement on AgricultureAgreement on Agriculture

Agreement on Textiles & Clothing (ATC)Agreement on Textiles & Clothing (ATC)

Agreement on Subsidies and Countervailing MeasuresAgreement on Subsidies and Countervailing Measures

Agreement on Anti-DumpingAgreement on Anti-Dumping

Agreement on SafeguardsAgreement on Safeguards

Agreement on Trade Related Investment Measures (TRIMs)Agreement on Trade Related Investment Measures (TRIMs)

Agreement on Custom ValuationAgreement on Custom Valuation

Agreement on Technical Barriers to Trade (TBT) and on Sanitary and PhytosanitaryAgreement on Technical Barriers to Trade (TBT) and on Sanitary and PhytosanitaryMeasures (SPS)Measures (SPS)

Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)

General Agreement on Trade in Services (GATS)General Agreement on Trade in Services (GATS)

Understanding on Dispute Settlement (DSU)Understanding on Dispute Settlement (DSU)

Special & Differential Treatment ( S& D )Special & Differential Treatment ( S& D )


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GATTGATTNegotiations onNegotiations on

Agriculture in the WTOAgriculture in the WTOPresentation by:Presentation by:

Mujeeb Ahmed KhanMujeeb Ahmed Khan

Head WTO CellHead WTO CellTrade Development Authority ofTrade Development Authority of

PakistanPakistan


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Agreement on Agriculture - ObjectivesAgreement on Agriculture - Objectives

To establish a fair and market-oriented agricultureTo establish a fair and market-oriented agriculturetrading system.trading system.

To initiate a reform process through negotiation ofTo initiate a reform process through negotiation ofcommitments on support and protection.commitments on support and protection.

To establish strengthened and operationallyTo establish strengthened and operationallyeffective rules and disciplines.effective rules and disciplines.

To provide for substantial progressive reduction inTo provide for substantial progressive reduction insupport and protection.support and protection.

To correct and prevent restrictions and distortions inTo correct and prevent restrictions and distortions in

world agricultural markets.world agricultural markets. To achieve specific binding commitments in ;marketTo achieve specific binding commitments in ;market

access, domestic support and export competition.access, domestic support and export competition.


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Special and Differential treatment forSpecial and Differential treatment for

developing countriesdeveloping countries

S & D is an integral element of the negotiations, andS & D is an integral element of the negotiations, andtaking into account the possible negative effect of thetaking into account the possible negative effect of theimplementation of the reform programme on least-implementation of the reform programme on least-developed and net food-importing developing countries.developed and net food-importing developing countries.

While implementing their commitments the developedWhile implementing their commitments the developed

countries to take fully into account the particular needscountries to take fully into account the particular needsand conditions of developing countries.and conditions of developing countries. Greater market access for agriculture products ofGreater market access for agriculture products of

particular interest to developing countries.particular interest to developing countries. Fullest liberalization of trade in tropical products andFullest liberalization of trade in tropical products and

products of importance to the diversification ofproducts of importance to the diversification of

production from the growing of illicit narcotic crops.production from the growing of illicit narcotic crops.


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Reduction commitments in the UruguayReduction commitments in the Uruguay

RoundRound

Developed DevelopingDeveloped Developing

(1995-2000)(1995-2004)(1995-2000)(1995-2004)

Market AccessMarket Access

Average tariff cuts for all ag.products -36% -24%Average tariff cuts for all ag.products -36% -24%

Minimum tariff cuts per product -15% -10%Minimum tariff cuts per product -15% -10%

Domestic SupportDomestic Support

Total cuts in aggregate measurement ofTotal cuts in aggregate measurement of

support -20% -13%support -20% -13%

Export SubsidiesExport Subsidies

Value cut -36% -24%Value cut -36% -24%

Volume Cut -21% -14%Volume Cut -21% -14%


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Domestic SupportDomestic Support

Green Box - Research, Extension,Green Box - Research, Extension,PDS,Decoupled payments etc.PDS,Decoupled payments etc.

Blue Box - Production Limiting Subsidies ;Blue Box - Production Limiting Subsidies ;

Amber Box - AMS-subject to reductionAmber Box - AMS-subject to reductioncommitments;commitments;

- Product specific (MSP)- Product specific (MSP)- Non product specific (input subsidies; fertilizers,- Non product specific (input subsidies; fertilizers,power, irrigation etcpower, irrigation etc


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Domestic Support (contd)Domestic Support (contd)

De minimis support;De minimis support;

Allowed WTO Members to exempt from the calculation of theAllowed WTO Members to exempt from the calculation of the

AMS, below a certain threshold level;AMS, below a certain threshold level;

- Developed countries: 5% of the value of agricultural- Developed countries: 5% of the value of agriculturalproduction of the product concerned and 5% of total value ofproduction of the product concerned and 5% of total value of

agricultural production.agricultural production.

- Developing countries: 10% of the value..- Developing countries: 10% of the value..


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The Doha Mandate for negotiationsThe Doha Mandate for negotiations

We commit ourselves to comprehensiveWe commit ourselves to comprehensive

negotiations aimed at:negotiations aimed at:

Substantial improvement in MARKET ACCESS;Substantial improvement in MARKET ACCESS;

Reductions of, with a view to phasing out, allReductions of, with a view to phasing out, all

forms of EXPORT SUBSIDIES;forms of EXPORT SUBSIDIES;

Substantial reductions in trade distortingSubstantial reductions in trade distorting

DOMESTIC SUPPORT.DOMESTIC SUPPORT.


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Negotiating priorities for Pakistan (contd)Negotiating priorities for Pakistan (contd)

The TRQ in-quota tariffs should be eliminated whereThe TRQ in-quota tariffs should be eliminated wheresubstantial under fill exists.substantial under fill exists.

Sensitive products must be limited to maximum of 1%Sensitive products must be limited to maximum of 1%

-2% of all tariff lines.-2% of all tariff lines.

Special products must be limited to 2% - 3% of all tariffSpecial products must be limited to 2% - 3% of all tarifflines.lines.

A Special Safeguard Mechanism, with strict andA Special Safeguard Mechanism, with strict andtransparent guidelines.transparent guidelines.


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Elimination of Tariff escalation through the use ofElimination of Tariff escalation through the use of

progressively higher tariff reductions for moreprogressively higher tariff reductions for more

processed products.processed products.

Most restrictive overall level of support.Most restrictive overall level of support.

(minimally acceptable position is the G-20(minimally acceptable position is the G-20

proposal of 80% reduction for EU and 70% for theproposal of 80% reduction for EU and 70% for the

U.S).U.S).

Product specific caps for the Amber Box and theProduct specific caps for the Amber Box and the

Blue Box.Blue Box.


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Capping of the Blue box at 2.5% of the value ofCapping of the Blue box at 2.5% of the value ofproduction.production.

Commitment to review the Green and Blue boxCommitment to review the Green and Blue box

criteria to ensure that these programs are trulycriteria to ensure that these programs are trulynon-trade distorting and production limiting.non-trade distorting and production limiting.

Possibility of a cap on Green Box expenditures.Possibility of a cap on Green Box expenditures.

Elimination of all forms of export subsidies,Elimination of all forms of export subsidies,including subsidy elements of export credits,including subsidy elements of export credits,state trading and food aid.state trading and food aid.


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ByBy

Tippu SultanTippu Sultan

Head Advisory Unit, WTO CellHead Advisory Unit, WTO Cell

TDAPTDAP

NAMA NegotiationsNAMA Negotiationsin the WTOin the WTO


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WTO NAMA Negotiations :WTO NAMA Negotiations : (Non Agriculture Market Access)(Non Agriculture Market Access)

Challenges and opportunities for PakistanChallenges and opportunities for Pakistan

The Doha Ministerial Declaration requires thatThe Doha Ministerial Declaration requires thatnegotiations should aim by modalities to be agreednegotiations should aim by modalities to be agreedupon toupon to

a)a) Reduce or eliminate tariffsReduce or eliminate tariffs

b)b) Reduce or eliminate tariff peaksReduce or eliminate tariff peaks

c)c) Reduce or eliminate non tariff barriersReduce or eliminate non tariff barriers

d)d) Not exclude any productsNot exclude any products

e)e) Allow less than full reciprocity to developingAllow less than full reciprocity to developingcountries in making reduction commitments.countries in making reduction commitments.


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NAMA Tariff Cut formulasNAMA Tariff Cut formulas The United States (US) has proposed to use simple Swiss formula with a negotiatedThe United States (US) has proposed to use simple Swiss formula with a negotiated

coefficient.coefficient.

The US elaborated that there could be two coefficients, one separately applied byThe US elaborated that there could be two coefficients, one separately applied by

developing countries and another applied by developed countries.developing countries and another applied by developed countries.

The Simple Swiss formula is expressed as follows:The Simple Swiss formula is expressed as follows:

Final tariff =Final tariff = Coefficient (a) x Initial tariffCoefficient (a) x Initial tariffCoefficient (a) + Initial tariffCoefficient (a) + Initial tariff

Where the:Where the:

Initial tariffInitial tariff is the bond rate, as listed in national schedules, andis the bond rate, as listed in national schedules, and

CoefficientCoefficientis a figure to be negotiatedis a figure to be negotiated


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Different ProposalsDifferent Proposals EU and US proposal:EU and US proposal:

In 6In 6thth Ministerial Conference at Hong Kong, the EU and US proposed usingMinisterial Conference at Hong Kong, the EU and US proposed usingcoefficient ofcoefficient ofa = 10a = 10 for developed countries and a coefficient offor developed countries and a coefficient ofa = 15a = 15 forfordeveloping countries.developing countries.

THE ABI formula:THE ABI formula:The second proposal has been presented by Argentina, Brazil and India, modifiedThe second proposal has been presented by Argentina, Brazil and India, modifiedSwiss-type formula, which incorporates national tariff averages into the formulaSwiss-type formula, which incorporates national tariff averages into the formulareducing the impact of the coefficient and establishing a linkage between tariffreducing the impact of the coefficient and establishing a linkage between tariffreductions and a countrys current tariff levels. It is expressed as follows:reductions and a countrys current tariff levels. It is expressed as follows:

Final tariff = (Final tariff = (Coefficient x National average of bond rates) x Initial tariffCoefficient x National average of bond rates) x Initial tariff

(Coefficient x National average of bond rates) + Initial tariff(Coefficient x National average of bond rates) + Initial tariffWhere the:Where the:

Initial tariffInitial tariffis the bond rate, as listed in national schedules, andis the bond rate, as listed in national schedules, and

CoefficientCoefficientis a figure to be negotiatedis a figure to be negotiated

National average of bond ratesNational average of bond rates is calculated using all non-agricultural bond dutiesis calculated using all non-agricultural bond duties


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Different Proposals . ContDifferent Proposals . Cont

Coefficient proposed by Pakistan:Coefficient proposed by Pakistan:

At the mini-ministerial meeting held in China,At the mini-ministerial meeting held in China,

Pakistan put forward a proposal to bridge thePakistan put forward a proposal to bridge the

difference between the supporters of the Simpledifference between the supporters of the SimpleSwiss formula and the supporters of the ABISwiss formula and the supporters of the ABI

formula.formula.

The coefficients proposed by Pakistan would beThe coefficients proposed by Pakistan would be

aroundaround a = 6a = 6 for developed countries andfor developed countries and

aroundaround a = 30a = 30 for developing countriesfor developing countries


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ConclusionsConclusions

In order to get greater market access, we wouldIn order to get greater market access, we wouldlike to see:like to see:

a)a) Tariff reductions by other developing countriesTariff reductions by other developing countries

b)b) Reduction / elimination of peak tariffs inReduction / elimination of peak tariffs indeveloped countries in products of our exportdeveloped countries in products of our exportinterest; most of their tariffs are otherwise veryinterest; most of their tariffs are otherwise very

low.low.

c)c) Reduction / elimination of non tariff barriers inReduction / elimination of non tariff barriers inall countriesall countries


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General Agreement on Trade inGeneral Agreement on Trade in

Services (GATS)Services (GATS)

The Service Agreement rests on three pillars.The Service Agreement rests on three pillars.

The first is the framework Agreements containingThe first is the framework Agreements containingthe basic obligations which apply to all members.the basic obligations which apply to all members.

The second concerns national schedules ofThe second concerns national schedules ofcommitments.commitments.

The third is a number of measures addressing theThe third is a number of measures addressing thespecial situations of individual services sectors.special situations of individual services sectors.


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WTO classification of Services SectorsWTO classification of Services Sectors

The four modes:The four modes:

Mode IMode I: cross-border -- when a Pakistani firm: cross-border -- when a Pakistani firm

delivers to an overseas customer without leavingdelivers to an overseas customer without leaving

home. Some examples of this mode are internet,home. Some examples of this mode are internet,

telecom, financial services etc.telecom, financial services etc.

Mode IIMode II: consumption abroad -- when a foreign: consumption abroad -- when a foreign

consumer is in the Pakistani market and receives orconsumer is in the Pakistani market and receives or

uses a service. Examples of this mode includeuses a service. Examples of this mode include

tourism, education, machinery sent for repairs etc.tourism, education, machinery sent for repairs etc.


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WTO Classification (contd)WTO Classification (contd)

Mode III:Mode III: Commercial presence -- when theCommercial presence -- when the

Pakistani firm establishes an office abroad;Pakistani firm establishes an office abroad;

Illustrations of Mode-III are branches set up byIllustrations of Mode-III are branches set up by

banks and Hotel chains etc.banks and Hotel chains etc.

Mode IV:Mode IV: movement of natural persons -- whenmovement of natural persons -- when

Pakistani service employees travel to anotherPakistani service employees travel to another

country to provide a service. Examples of thiscountry to provide a service. Examples of this

mode are Doctors, engineers, skilled or semimode are Doctors, engineers, skilled or semiskilled laborers etc.skilled laborers etc.


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Commitments on services in the WTOCommitments on services in the WTO

Each member will submit schedules of commitmentsEach member will submit schedules of commitments

pertaining to different services sectors on each of the fourpertaining to different services sectors on each of the four

modes.modes.

These schedules will then be negotiated in a request andThese schedules will then be negotiated in a request and

offer format resulting in submission of revised schedules.offer format resulting in submission of revised schedules.

11 sectors were approved by the ECC for the proposal11 sectors were approved by the ECC for the proposal

Pakistan has submitted its initial offer on 9 servicesPakistan has submitted its initial offer on 9 services

sectors including 68 sub-sectors (on 24sectors including 68 sub-sectors (on 24thth May 2005).May 2005).


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ECC approved Sectors:ECC approved Sectors:(Marked Red were not in the initial offer)(Marked Red were not in the initial offer)

1.1. Business ServicesBusiness Services

2.2. Communication ServicesCommunication Services3.3. Construction and related engineering ServicesConstruction and related engineering Services

4.4. Distribution servicesDistribution services

5.5. Educational servicesEducational services

6.6. Environmental servicesEnvironmental services

7.7. Financial servicesFinancial services8.8. Health and related social servicesHealth and related social services

9.9. Tourism and travel related servicesTourism and travel related services

10.10. Recreational, cultural and sporting servicesRecreational, cultural and sporting services

11.11. Transport servicesTransport services


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SALIENT FEATURES OF ECC APPROVED OFFER:SALIENT FEATURES OF ECC APPROVED OFFER:

i.i. Commercial presence' - subject to incorporation in Pakistan withCommercial presence' - subject to incorporation in Pakistan with

maximum foreignmaximum foreign equity participation ofequity participation of70%70% is inscribedis inscribedagainst a particular sector or subsector.against a particular sector or subsector.

ii.ii. Establishments to be located in Export processing zones mayEstablishments to be located in Export processing zones maynegotiate higher than 70 percent limits on foreign investmentnegotiate higher than 70 percent limits on foreign investment ..

iii.iii. Profits of foreign-invested companies will be fully repatriableProfits of foreign-invested companies will be fully repatriableexcept as provided in specific sector commitments.except as provided in specific sector commitments.


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SALIENT FEATURES OF ECC APPROVEDSALIENT FEATURES OF ECC APPROVED

OFFER (contd)OFFER (contd)

iv.iv. No legal restriction on acquisition of real estate byNo legal restriction on acquisition of real estate byforeign-invested judicial entities or natural persons.foreign-invested judicial entities or natural persons.

v.v. Subsidies, if any, will be granted to domesticSubsidies, if any, will be granted to domesticcompanies only.companies only.

vi.vi. Movement of natural persons - Unbound, except forMovement of natural persons - Unbound, except formeasures concerning the entry or temporary stay ofmeasures concerning the entry or temporary stay ofnatural persons falling in specified categories.natural persons falling in specified categories.E.g.Intracorporate transferees, Business visitors,E.g.Intracorporate transferees, Business visitors,

Independent Professionals etc...Independent Professionals etc...


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SALIENT FEATURES OF ECC APPROVED OFFERSALIENT FEATURES OF ECC APPROVED OFFER

(contd)(contd)

vii.vii.The commitments relating to Professional services apply onlyThe commitments relating to Professional services apply only

to countries that provide similar commitments to Pakistanto countries that provide similar commitments to Pakistan

except natural persons qualified in the United Kingdom and theexcept natural persons qualified in the United Kingdom and the

USA.USA.

viii. In specific sectors; Access granted both to natural persons andviii. In specific sectors; Access granted both to natural persons andcompanies based on economic needs test. Criteria include ratecompanies based on economic needs test. Criteria include rate

of growth of the services sector recorded by the nationalof growth of the services sector recorded by the national

accounts in the previous 5 years.accounts in the previous 5 years.


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Pakistans offerPakistans offer

SALIENT FEATURES OF INITIAL OFFERSSALIENT FEATURES OF INITIAL OFFERS::

i.i. Commercial presence' - subject to incorporation inCommercial presence' - subject to incorporation inPakistan with maximum foreignPakistan with maximum foreign equity participation ofequity participation of

60%60% is inscribed against a particular sector or subsector.is inscribed against a particular sector or subsector.In certain sub sectors e.g. Engineering services it isIn certain sub sectors e.g. Engineering services it is 51%51%..

ii.ii. In specific sectors; Access granted both to naturalIn specific sectors; Access granted both to naturalpersons and companies based on economic needs test.persons and companies based on economic needs test.


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SALIENT FEATURES OF INITIAL OFFERS (contd)SALIENT FEATURES OF INITIAL OFFERS (contd)

iii. Presence of natural persons in certain sub sectorsiii. Presence of natural persons in certain sub sectorsthere are conditions that qualifications for foreign servicethere are conditions that qualifications for foreign servicesuppliers will be set by the concerned Pakistanisuppliers will be set by the concerned PakistaniAssociation/Council and any other relevant law in force.Association/Council and any other relevant law in force.

iv. Commercial presence in certain sub sectors there areiv. Commercial presence in certain sub sectors there areconditions of Economic needs test e.g. wholesale tradeconditions of Economic needs test e.g. wholesale tradeservices, Franchising etc.services, Franchising etc.

v. The commitments in Financial Services are given to thev. The commitments in Financial Services are given to thenationals and financial institutions of the Members whosenationals and financial institutions of the Members whose

laws and policies do not bar the provision of similarlaws and policies do not bar the provision of similarcommitments to the Pakistani nationals and financialcommitments to the Pakistani nationals and financialinstitutions.institutions.


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Pakistans offerPakistans offer

SALIENT FEATURES OF PROPOSED REVISED OFFER:SALIENT FEATURES OF PROPOSED REVISED OFFER:

i.i. As per the ECC mandate all 11 sectors and 86 sub-As per the ECC mandate all 11 sectors and 86 sub-

sectors covered.sectors covered.

ii.ii. Commercial presence' - subject to incorporation inCommercial presence' - subject to incorporation in

Pakistan with maximum foreignPakistan with maximum foreign equityequity

participation ofparticipation of70%70% is inscribed against ais inscribed against a

particular sector or sub sector. (ECC mandate)particular sector or sub sector. (ECC mandate)


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SALIENT FEATURES OF PROPOSED REVISEDSALIENT FEATURES OF PROPOSED REVISED

OFFER (contd)OFFER (contd)

iii. No limitations on Market Access or National treatmentiii. No limitations on Market Access or National treatment

in Cross border supply (mode I) and Consumptionin Cross border supply (mode I) and Consumption

abroad (mode II) except for Financial Sector and its subabroad (mode II) except for Financial Sector and its sub

sectors.sectors.

iv.iv. Movement of natural persons - Unbound, except forMovement of natural persons - Unbound, except for

measures concerning the entry or temporary stay ofmeasures concerning the entry or temporary stay of

natural persons falling in specified categories.natural persons falling in specified categories.

E.g.Intracorporate transferees, Business visitors,E.g.Intracorporate transferees, Business visitors,

Independent Professionals etc...Independent Professionals etc...


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SALIENT FEATURES OF PROPOSEDSALIENT FEATURES OF PROPOSED

REVISED OFFER (contd)REVISED OFFER (contd)

v. No commitments contingent upon reciprocity by other countries. (ECC plus)v. No commitments contingent upon reciprocity by other countries. (ECC plus)

vi. No requirement of Economic Need Test for granting Market Access or Nationalvi. No requirement of Economic Need Test for granting Market Access or National

Treatment. (ECC plus)Treatment. (ECC plus)

vii.Presence of natural persons in certain sub sectors there are conditions thatvii.Presence of natural persons in certain sub sectors there are conditions that

qualifications for foreign service suppliers will be set by the concerned Pakistaniqualifications for foreign service suppliers will be set by the concerned PakistaniAssociation/Council and any other relevant law in force.Association/Council and any other relevant law in force.

(Initial offer)(Initial offer)

S S


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Pakistans View in Service SectorPakistans View in Service Sector

Pakistan believes that the liberalization inPakistan believes that the liberalization in

Services sector is in our own interest, as itServices sector is in our own interest, as itwill enhance the efficiency of local servicewill enhance the efficiency of local service

suppliers through competition andsuppliers through competition and

introduction of new techniques apart fromintroduction of new techniques apart from

improving the quality of manufactured goods,improving the quality of manufactured goods,

since the service are also inputs forsince the service are also inputs for

manufacturing.manufacturing.

Pakistan is presently consulting variousPakistan is presently consulting various

Domestic stakeholders before a final offer isDomestic stakeholders before a final offer is

made.made.


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Trade Related Intellectual Property RightTrade Related Intellectual Property Right

TRIPSTRIPSPresentation by:Presentation by:

Mujeeb Ahmed KhanMujeeb Ahmed Khan

Head WTO CellHead WTO CellTrade Development Authority ofTrade Development Authority of

PakistanPakistan


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TRIPSTRIPS

TRIPs included in the single undertaking of the URTRIPs included in the single undertaking of the UR It establishes minimum standards for all types ofIt establishes minimum standards for all types of

IPRs (but utility models and breedersIPRs (but utility models and breeders rights)rights) It is based on and supplements, with additionalIt is based on and supplements, with additional

obligations, the Paris, Berne, Rome andobligations, the Paris, Berne, Rome andWashington ConventionsWashington Conventions

It extends to IPRs the principles governingIt extends to IPRs the principles governinginternational trade: MFN, NTinternational trade: MFN, NT

It contains provisions relating to enforcement ofIt contains provisions relating to enforcement ofIPRs, amendment and reservationIPRs, amendment and reservation


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TRIPS (cont2)TRIPS (cont2)

TRIPS requires member states to provideTRIPS requires member states to providestrong protection for intellectual propertystrong protection for intellectual propertyrights. For example, under TRIPS:rights. For example, under TRIPS:

Copyright terms must extend to 50 yearsCopyright terms must extend to 50 years

after the death of the author, althoughafter the death of the author, althoughfilms and photographs are only required tofilms and photographs are only required tohave fixed 50 and to be at least 25 yearhave fixed 50 and to be at least 25 yearterms, respectively.(Art. 7(2),(4)).terms, respectively.(Art. 7(2),(4)).

Copyright must be granted automatically,Copyright must be granted automatically,and not based upon any "formality", suchand not based upon any "formality", suchas registrations or systems of renewal.as registrations or systems of renewal.


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Computer programs must be regarded asComputer programs must be regarded as"literary works" under copyright law and"literary works" under copyright law andreceive the same terms of protection.receive the same terms of protection.

National exceptions to copyright (such asNational exceptions to copyright (such as

"fair use" in the United States) are"fair use" in the United States) areconstrained by the Berne three-step test .constrained by the Berne three-step test . Patents must be granted in all "fields ofPatents must be granted in all "fields of

technology," although exceptions for certaintechnology," although exceptions for certainpublic interests are allowed (Art. 27.2 andpublic interests are allowed (Art. 27.2 and

27.3 [1]) and must be enforceable for at27.3 [1]) and must be enforceable for atleast 20 years (Art 33).least 20 years (Art 33).


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Exceptions to the exclusive rights must be limited,Exceptions to the exclusive rights must be limited,provided that a normal exploitation of the workprovided that a normal exploitation of the work(Art. 13) and normal exploitation of the patent(Art. 13) and normal exploitation of the patent(Art 30) is not in conflict.(Art 30) is not in conflict.

No unreasonably prejudice to the legitimateNo unreasonably prejudice to the legitimate

interests of the right holders of computer programsinterests of the right holders of computer programsand patents is allowed.and patents is allowed. Legitimate interests of third parties have to beLegitimate interests of third parties have to be

taken into account by patent rights (Art 30).taken into account by patent rights (Art 30). In each state, intellectual property laws may notIn each state, intellectual property laws may not

offer any benefits to local citizens which are notoffer any benefits to local citizens which are notavailable to citizens of other TRIPs signatories byavailable to citizens of other TRIPs signatories bythe principles of national treatment (with certainthe principles of national treatment (with certainlimited exceptions, Art. 3 and 5 [2]). TRIPS also haslimited exceptions, Art. 3 and 5 [2]). TRIPS also hasa most favored nation clause.a most favored nation clause.


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Many of the TRIPS provisions on copyright wereMany of the TRIPS provisions on copyright were

imported from the Berne Convention for theimported from the Berne Convention for the

Protection of Literary and Artistic Works andProtection of Literary and Artistic Works and

many of its trademark and patent provisions weremany of its trademark and patent provisions were

imported from the Paris Convention for theimported from the Paris Convention for theProtection of Industrial Property.Protection of Industrial Property.


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IPRs addressed under TRIPsIPRs addressed under TRIPs

Copyrights.Copyrights.

Patents.Patents.

Trade Marks.Trade Marks.

Industrial Designs.Industrial Designs. Layout designs of Integrated circuits.Layout designs of Integrated circuits.

Geographical Indications.Geographical Indications.

Traditional Knowledge and FolkloreTraditional Knowledge and Folklore


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National Tariff CommissionNational Tariff Commission

Established in 1990 under the National Tariff

Commission Act, 1990

FunctionFunction

Implementation of Trade Defense LawsImplementation of Trade Defense Laws


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I l i f T d D f L


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Anti-Dumping Duties Ordinance, 2000Anti-Dumping Duties Ordinance, 2000

MandateMandate

Imposition of anti-dumping measures after due processImposition of anti-dumping measures after due process

ProcedureProcedure

Application processing, preliminary investigation,Application processing, preliminary investigation,

preliminary determination, final investigation, final preliminary determination, final investigation, final

determination, imposition of anti-dumping measures.determination, imposition of anti-dumping measures.The anti-dumping duty is imposed for a period of 5 years.The anti-dumping duty is imposed for a period of 5 years.

Time frameTime frame: 365 days: 365 days


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TRANSPARENCYTRANSPARENCY

Commission maintains a Public File in each investigation, whichCommission maintains a Public File in each investigation, whichcontains all documents (non-confidential) including application,contains all documents (non-confidential) including application,

notices, reports, comments and correspondence with interested partiesnotices, reports, comments and correspondence with interested parties

and other related documents.and other related documents.

The public file is open for inspection and copying to all interestedThe public file is open for inspection and copying to all interested

parties.parties.

The public file is usually inspected by domestic industry, foreignThe public file is usually inspected by domestic industry, foreignmissions, foreign exporters and producers, lawyers etc.missions, foreign exporters and producers, lawyers etc.


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Implementation of Trade Defense Laws


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p

Anti-Dumping Actions Taken by Pakistan

Product Exporters from Initiation

Date

Preliminary

Determination

Final Determination

Anti-Dumping Duties

Polyester Staple

Fibre

Thailand

Korea, Indonesia

09.08.2006 0% to 8.33%

09.02.2007

0% to 10.26%07.06.2007

Tiles China 27.03.2006 0% to 21.02%

30.11.2006

14.85% to 23.65%

30-03-2007

Tinplate UK, USA, Italy,Germany and

France

06.12.2005 Terminated03.06.2006

Formic Acid Finland and

Germany

08.09.2005 16.49% and 6.16%

09.03.2006

13.63% and 6.25 %07-07-2006

Pthalic Anhydride India 11.08.2005 10.94%

13.02.2006

10.94%

26-05-2006*Polyester Filament

Yarn

Indonesia, Korea,

Malaysia, and

Thailand

12.05.2005 0% to 36.56%

12.11.2005

0% to 29.68%17-03-2006

Anti-dumping duties imposed after final determination remain in force for a period of five years.

*15 Price undertakings have been accepted from the exporters and are being monitored



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pAnti-Dumping Actions Taken by Pakistan


Date

Preliminary

Determination

Final Determination

UFMC China 12-01-2005 4.31% to 14.89%

18-07-2005

3.43% to 11.58%

19-11-2005

PVC Resin Iran

Korea

25-6-2004 31.06%

40.18%

26-10-2004

31.06%

40.18%

24-02-2005Acrylic Tow Uzbekistan 16-3-2004 12.71%

13-08-2004

12.71%

10-12-2004

Glacial Acetic Acid Taiwan 1-9-2003 13.77%

25-2-2004

13.77%

18-6-2004

Sorbitol 70%

Solution

France

Indonesia

6-3-2003 96.50% & 91.12%

19-7-2003

96.50% & 22.26%

19-11-2003

Tinplate South Africa 26-2-2002 23.91%

22-7-2002

27.33%

26-11-2002


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Implementation of Trade Defense LawsReviews of Anti-dumping Measures


Date

Status

Sorbitol 70% Solution Indonesia 25-07-2007

(Changed

Circumstances)

Terminated on

02-02-2008

Tinplate South Africa 07-07-2007

(Sunset)

Under Process

Tiles China Request Received

(Newcomer)

Under Process


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Implementation of Trade Defense LawsImplementation of Trade Defense LawsAPPEAL AGAINST THE COMMISSIONS DECISIONAPPEAL AGAINST THE COMMISSIONS DECISION

Appellate Tribunal (Pakistan)Appellate Tribunal (Pakistan)Any interested party can file an appeal against aAny interested party can file an appeal against a

final determination made by the Commissionfinal determination made by the Commission

Dispute Settlement Body (Geneva)Dispute Settlement Body (Geneva)

The government of exporting country may The government of exporting country mayapproach the DSB to challenge the inconsistenciesapproach the DSB to challenge the inconsistenciesof a measure with the WTO Agreementsof a measure with the WTO Agreements

I l t ti f T d D f LI l t ti f T d D f L


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Countervailing Duties Ordinance, 2001Countervailing Duties Ordinance, 2001

MandateMandate

Imposition of countervailing measures after due processImposition of countervailing measures after due process

ProcedureProcedure

Application processing, preliminary investigation, preliminaryApplication processing, preliminary investigation, preliminary

determination final investigation, final determination, imposition ofdetermination final investigation, final determination, imposition of

Countervailing measures.Countervailing measures.The countervailing duty is imposed for a period of 5 years.The countervailing duty is imposed for a period of 5 years.

Time frameTime frame: 365 days.: 365 days.



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Safeguard Measures Ordinance, 2002Safeguard Measures Ordinance, 2002

MandateMandateSafeguard Measures against surge of imports.Safeguard Measures against surge of imports.

ProcedureProcedureApplication processing, investigation, determination and makingApplication processing, investigation, determination and makingrecommendations to the Government.recommendations to the Government.

RecommendationsRecommendations NTC sends recommendations on safeguard measures to the Federal NTC sends recommendations on safeguard measures to the Federal

Govt. for consideration.Govt. for consideration.Safeguard Measures are imposed for a period of 4 years.Safeguard Measures are imposed for a period of 4 years.

Time FrameTime Frame: 120 days.: 120 days.

f f


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Implementation of Trade Defense LawsSafeguard Investigation by Pakistan

Product Date of Initiation Determination

Footwear 17-06-2005 Investigation

Terminated

A i i E F i T d D f A iA i ti E t F i T d D f A ti


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Assisting Exporters Facing Trade Defense ActionsAssisting Exporters Facing Trade Defense Actions

Assisting Pakistani exporters facing foreignAssisting Pakistani exporters facing foreign

actions under WTO Trade Defenseactions under WTO Trade Defense

Agreements.Agreements.

NTC assisted Pakistani exporters of Ethyl NTC assisted Pakistani exporters of Ethyl

Alcohol, Pet Resin and Match Boxes.Alcohol, Pet Resin and Match Boxes.

A i i E F i T d D fA i ti E t F i T d D f


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Assisting Exporters Facing Trade DefenseAssisting Exporters Facing Trade Defense

ActionsActions

The Commission has been assisting the exporters from PakistanThe Commission has been assisting the exporters from Pakistanfacing anti-dumping actions by other WTO Member countries,facing anti-dumping actions by other WTO Member countries,

mainly in the following:mainly in the following:

Response to the questionnairesResponse to the questionnaires

Accounting detailsAccounting details

Procedural complianceProcedural compliance

DSB proceedingsDSB proceedings


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REGIONALISMREGIONALISM

ByBy

Aamir Hussain SiddiquiAamir Hussain Siddiqui

Economist, Research & Information Unit,Economist, Research & Information Unit,



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WTO Provisions forWTO Provisions for

RegionalismRegionalism Article XXIV of GATT 1994:Article XXIV of GATT 1994:

Para 4 of the Doha Declaration: WePara 4 of the Doha Declaration: We

stress our commitment to the WTO asstress our commitment to the WTO asthe unique forum for global trade rule-the unique forum for global trade rule-

making and liberalization, while alsomaking and liberalization, while also

recognizing that regional traderecognizing that regional trade

agreements can play an important roleagreements can play an important rolein promoting the liberalization andin promoting the liberalization and

expansion of trade and in fosteringexpansion of trade and in fostering

development.development.


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If we take into account RTAs which areIf we take into account RTAs which are

in force but have not been notified,in force but have not been notified,

those signed but not yet in force, thosethose signed but not yet in force, those

currently being negotiated, and those incurrently being negotiated, and those in

the proposal stage, we arrive at a figurethe proposal stage, we arrive at a figureof close to 400 RTAs which areof close to 400 RTAs which are

scheduled to be implemented by 2010.scheduled to be implemented by 2010.

Of these RTAs, free trade agreementsOf these RTAs, free trade agreements

(FTAs) and partial scope agreements(FTAs) and partial scope agreementsaccount for over 90%, while customsaccount for over 90%, while customs

unions account for less than 10 %.unions account for less than 10 %.


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World major RTAsWorld major RTAs

European Union (EU) European Union (EU) Custom UnionCustom Union

North America Free Trade Area (NAFTA)North America Free Trade Area (NAFTA)ASEAN Free Trade Area (AFTA)ASEAN Free Trade Area (AFTA)

Gulf Cooperation Council (GCC) Gulf Cooperation Council (GCC) Custom UnionCustom Union

MERCOSUR (MERCOSUR (South American Common MarketSouth American Common Market) ) CustomCustomUnionUnion


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Pakistans positionPakistans position

Pakistan has signed following TradePakistan has signed following Trade

AgreementsAgreements

a.a. SAFTA (RTA)SAFTA (RTA)b.b. FTAs withFTAs with (1)(1) Sri LankaSri Lanka

(2)(2) ChinaChina

(3)(3) MalaysiaMalaysia

c.c. PTAs withPTAs with (1)(1) MauritiusMauritius

(2)(2) IranIran


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S th A i F T d AS th A i F T d A


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Article-7 of the Agreement contains modalities of tariff reductionunder TLP, which are as follows:-No tariff reduction on items in the Sensitive List.Non-LDCs (Pakistan, India, Sri Lanka) shall reduce tariff to 0-5% forLDCs (Bangladesh, Bhutan, Nepal, Maldives) within three years (2009)

Tariff Reduction by Non-LDCs for Non-LDCs

Reduction in two phases:Phase-I (2006-2008)

Existing tariff rates above 20% to be reduced to 20% withintwo years

Tariff below 20% to be reduced on margin of preference basisof 10% per year.

Phase-II (2008-2013)

Tariff to be reduced to 0-5% within 5 years.Tariff Reduction by LDCs for all SAARC MembersReduction in two phases:

Phase-I (2006-2008) Existing tariff rates above 30% to be reduced to 30% withintwo years

Tariff below 30% to be reduced on margin of preference basisof 5% per year. Phase-II (2008-2016)

South Asian Free Trade AreaSouth Asian Free Trade Area

(SAFTA)(SAFTA)


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Sensitive ListSensitive List

Countries No. of tariff lines % of total lines

Bangladesh 1254 24

Bhutan 157 3India 884 16.9

Maldives 671 12.8

Nepal 1310 25.5Pakistan 1183 22.6

Sri Lanka 1065 20.3


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SAFTA Rules of OriginSAFTA Rules of Origin

Annex IV deals with the rules of originAnnex IV deals with the rules of originunder the SAFTA required to qualifyunder the SAFTA required to qualifyproducts for preferential duty benefits.products for preferential duty benefits.Rules of Origin to be operative onRules of Origin to be operative on

01.07.2006. Basic Criteria is as under:01.07.2006. Basic Criteria is as under:

For non-LDCsFor non-LDCs40% value addition + change in tariff40% value addition + change in tariffheading at 4 digits (CTH).heading at 4 digits (CTH).

For LDCsFor LDCs30% value addition + CTH.30% value addition + CTH.


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C


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Pakistan CommitmentsPakistan Commitments

From the date of entry into force Pakistan has granted 100%From the date of entry into force Pakistan has granted 100%immediate tariff concessions on 206 items. In addition Sri Lanka canimmediate tariff concessions on 206 items. In addition Sri Lanka canexport up to 10,000 MT of tea per financial year free of duty.export up to 10,000 MT of tea per financial year free of duty.

Pakistan has also granted 35% of margin of preference on appliedPakistan has also granted 35% of margin of preference on applied(MFN1) tariff rate to exports of beetle leaves from Sri Lanka. Apparel(MFN1) tariff rate to exports of beetle leaves from Sri Lanka. Apparelexports from Sri Lanka (21 categories) are also granted 35% margin ofexports from Sri Lanka (21 categories) are also granted 35% margin ofpreference on applied (MFN) tariff rate up to 3 million pieces. Ceramicpreference on applied (MFN) tariff rate up to 3 million pieces. Ceramic

exports from Sri Lanka to Pakistan are given a margin of preference ofexports from Sri Lanka to Pakistan are given a margin of preference of20% on applied (MFN) tariff rate.20% on applied (MFN) tariff rate.

There is no limit on the quantity of exports. About 10% of tariff lines atThere is no limit on the quantity of exports. About 10% of tariff lines at6-digit level (i.e. 540 items) are included in the negative list of6-digit level (i.e. 540 items) are included in the negative list ofPakistan. These consist of very sensitive items where Pakistan is not inPakistan. These consist of very sensitive items where Pakistan is not ina position to offer any preferential treatment to Sri Lanka.a position to offer any preferential treatment to Sri Lanka.

All other items that are not included in the negative list and immediateAll other items that are not included in the negative list and immediateconcession list are subject to a tariff phase out and would have dutyconcession list are subject to a tariff phase out and would have dutyfree access to Pakistan by 2008.free access to Pakistan by 2008.


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P k Chi FTA


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Pak-China FTAPak-China FTA

Pak China Free Trade Agreement was concluded on JulyPak China Free Trade Agreement was concluded on July1, 2007. The FTA covers overall 14353 products at 8-1, 2007. The FTA covers overall 14353 products at 8-digit level of H.S. Code including 7550 under tariffdigit level of H.S. Code including 7550 under tariffreduction modality provided by China and 6803 underreduction modality provided by China and 6803 underTariff reduction modality of Pakistan.Tariff reduction modality of Pakistan.

Pak- China FTA comprises two phases, providingPak- China FTA comprises two phases, providingelimination and reduction of tariffs within the timeelimination and reduction of tariffs within the timeframe as provided under the agreement.frame as provided under the agreement.The base yearThe base yearfor tariff reduction/elimination is 2006 for China whilefor tariff reduction/elimination is 2006 for China whilethe base year for tariff reduction/ elimination is thethe base year for tariff reduction/ elimination is thefiscal year of 2006-2007 for Pakistan. It is worthfiscal year of 2006-2007 for Pakistan. It is worthmentioning here that thementioning here that the elimination of tariff on theelimination of tariff on theproducts covered in the Early Harvest Program (EHP)products covered in the Early Harvest Program (EHP)shall continue in accordance with the earlier agreedshall continue in accordance with the earlier agreedmodality of tariff elimination for EHP.modality of tariff elimination for EHP.


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Tariff Reduction Modality of ChinaTariff Reduction Modality of China

(Phase-I)(Phase-I)Category

No.Track No. of Tariff

Lines% of Tariff lines

at 8 digit

I Elimination of tariff (Three years) 2681 35.5%

II 0-5% ( five years ) 2604 34.5%

III Reduction on Margin of Preferenceof 50%( five years )

604 8%

IV Reduction on Margin of Preferencefrom 20%( five years)

529 7%

V No Concession 1132 15%

Total 7550


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Tariff Reduction Modality of PakistanTariff Reduction Modality of Pakistan

(Phase-I)(Phase-I)

CategoryNo.

Track No. of TariffLines

% of Tariff linesat 8 digit

I Elimination of tariff (Three years) 2423 35.6

II 0-5% ( five years ) 1338 19.9

III Reduction on Margin of Preference of50%( five years )

157 2.0

IV Reduction on Margin of Preference from20%( five years)

1768 26.1

V No Concession 1025 15.0

VI Exclusion 92 1.4

TOTAL 9803


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Phase II:Both Parties shall endeavor to eliminate thetariffs of no less than 90% of products, both in terms oftariff lines and trade volume within a reasonable period

of time on the basis of friendly consultation andaccommodation of the concerns of both Parties.


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Malaysia-Pakistan Closer EconomicMalaysia-Pakistan Closer Economic

Partnership Agreement (MPCEPA)Partnership Agreement (MPCEPA) This Agreement is the 1st bilateral FTA between two Muslim Countries - membersThis Agreement is the 1st bilateral FTA between two Muslim Countries - members

of OIC. This Agreement is Pakistans first comprehensive FTA incorporating trade inof OIC. This Agreement is Pakistans first comprehensive FTA incorporating trade ingoods, trade in services, investment and Economic Co-operation and Malaysiasgoods, trade in services, investment and Economic Co-operation and Malaysiasfirst bilateral FTA with any south Asian country.first bilateral FTA with any south Asian country.

For trade in Goods Pakistan will eliminate tariff on 43.2% of the current importsFor trade in Goods Pakistan will eliminate tariff on 43.2% of the current importsfrom Malaysia by 2012. On the other hand Malaysia will eliminate tariff on 78% offrom Malaysia by 2012. On the other hand Malaysia will eliminate tariff on 78% ofimports from Pakistan.imports from Pakistan.

In trade in services, both countries have provided WTO plus market accesses toIn trade in services, both countries have provided WTO plus market accesses toeach other. In the field of computer and I.T related services, Islamic Banking,each other. In the field of computer and I.T related services, Islamic Banking,Islamic Insurance (Takaful) Pakistan has secured 100% equity in Malaysia. MarketIslamic Insurance (Takaful) Pakistan has secured 100% equity in Malaysia. Marketaccess in services provided by both countries will impact positively on investmentaccess in services provided by both countries will impact positively on investmentand trade in goods. Mutual recognition arrangements are also apart of the FTA.and trade in goods. Mutual recognition arrangements are also apart of the FTA.

The Agreement also contains a chapter on investment to facilitate entrepreneursThe Agreement also contains a chapter on investment to facilitate entrepreneursof both countries. The incentives available to both countries will not be available toof both countries. The incentives available to both countries will not be available toinvestors from other countries and the bilateral investment treaty signed byinvestors from other countries and the bilateral investment treaty signed byPakistan will have no impact on the investment provisions under the FTA.Pakistan will have no impact on the investment provisions under the FTA.


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Tariff Reduction Modality by MalaysiaTariff Reduction Modality by Malaysia

Category No. of Items Duty Dates for duties

Fast Track 6699 0% 1-1-2009

Normal Track 1215 0% 1-1-2012

Sensitive Track-1 224 5% 1-1-2011



450 items are in Highly Sensitive List, where no concession is given

16 items are in Tariff Rate Quota List

102 items are in Exclusion List


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Tariff Reduction Modality by PakistanTariff Reduction Modality by Pakistan

Category No. of Items Duty Dates for duties

Fast Track 1703 0% 1-1-2009

Normal Track 1206 0% 1-1-2012




765 items are in Highly Sensitive List, where no concession isgiven

129 items are in Margin of Preference -1, on which 5%, 10%,15% and 20% MOP would given in 2008, 2009, 2010 and 2011,respectively

9 items related to Palm nut and oil, are in Margin of Preference

-2, where MOP would be given 10% in 2008 and 2009 and 15% in2010.

P k I PTAP k I PTA


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Pak Iran PTAPak Iran PTA

Pakistan signed Preferential Trade AgreementPakistan signed Preferential Trade Agreement

with Islamic Republic of Iran on 4th March 2004.with Islamic Republic of Iran on 4th March 2004.

The Cabinet ratified the agreement on 25th MayThe Cabinet ratified the agreement on 25th May

2005. As mutually agreed the agreement has2005. As mutually agreed the agreement has

become operational from 1st September 2006.become operational from 1st September 2006.

Preferences granted by both countries to eachPreferences granted by both countries to each

other cover approximately 18% of MFN tariff ofother cover approximately 18% of MFN tariff of

both countries.both countries.

P f i b I tPreferences given by Iran to


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Preferences given by Iran toPreferences given by Iran to

PakistanPakistanTotal 309 ItemsTotal 309 Items

Main items are Textile and Clothing (125 items),Main items are Textile and Clothing (125 items),Chemicals, Marble & Granite, Fish, Bananas,Chemicals, Marble & Granite, Fish, Bananas,Mangoes and Citrus fruits, Pharmaceutical,Mangoes and Citrus fruits, Pharmaceutical,

Plastics, Rubber & Articles, Footwear,Plastics, Rubber & Articles, Footwear,Cutleries, Refrigerators, Electric Motors,Cutleries, Refrigerators, Electric Motors,Brushes, Pens, Pencils & Markers, etc.Brushes, Pens, Pencils & Markers, etc.

Margin of Preference is between 10 to 30Margin of Preference is between 10 to 30

percent, except Rice, which is given TRQpercent, except Rice, which is given TRQstatus, but Commercial benefit is about 96%.status, but Commercial benefit is about 96%.

Preference given by Pakistan toPreference given by Pakistan to


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Preference given by Pakistan tog y

IranIran

Total 475 itemsTotal 475 items

Major items, are animal products, vegetables, fruits, teaMajor items, are animal products, vegetables, fruits, tea& spices, oilseeds, animal of vegetable oils,& spices, oilseeds, animal of vegetable oils,confectionary, salts and minerals, fuels Petroleumconfectionary, salts and minerals, fuels Petroleumand LPG etc. Organic & Inorganic Chemicals,and LPG etc. Organic & Inorganic Chemicals,Pharmaceuticals, Fertilizers, Chemicals, Textile &Pharmaceuticals, Fertilizers, Chemicals, Textile &Clothing materials, Articles Stones, Glass &Clothing materials, Articles Stones, Glass &Glassware, Pig iron and Ferrous alloy, Copper andGlassware, Pig iron and Ferrous alloy, Copper andIndustrial Machines etc.Industrial Machines etc.

Margin of Preference is between 10 to 30 percent,Margin of Preference is between 10 to 30 percent,Organic and Inorganic, Ores and other are givenOrganic and Inorganic, Ores and other are givenhighest MOP of 30%highest MOP of 30%

P k M iti PTAP k M iti PTA


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Pak Mauritius PTAPak Mauritius PTA

Pakistan signed Preferential TradePakistan signed Preferential Trade

Agreement with Republic of MauritiusAgreement with Republic of Mauritius

on 30th July 2007. As mutuallyon 30th July 2007. As mutuallyagreed the agreement has becomeagreed the agreement has become

operational from 1st December 2007.operational from 1st December 2007.

P f t d b M itiPreference granted b Ma riti s


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Preference granted by MauritiusPreference granted by Mauritius


Major items are Vegetables andMajor items are Vegetables and

Fruites, Rice, Biscuits, Tobacco,Fruites, Rice, Biscuits, Tobacco,

Marble & Granites, Articles of Wood,Marble & Granites, Articles of Wood,Carpets, Textile Made-ups, etc.Carpets, Textile Made-ups, etc.

Margin of Preference would becomeMargin of Preference would become

100% one year.100% one year.

P f t d b P ki tPreference granted by Pakistan


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Preference granted by PakistanPreference granted by Pakistan


All are related to Garments (ChapterAll are related to Garments (Chapter

61: Knitted garments and Chapter61: Knitted garments and Chapter

62: Woven Garments)62: Woven Garments)

Margin of Preference is between 30 toMargin of Preference is between 30 to

50%50%

Most of the items are subject TRQs.Most of the items are subject TRQs.

ECO T d A tECO Trade Agreement


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ECO Trade AgreementECO Trade Agreement

Economic Cooperation Organization (ECO), is anEconomic Cooperation Organization (ECO), is anintergovernmental regional organization established inintergovernmental regional organization established in1985 by Iran, Pakistan and Turkey for the purpose of1985 by Iran, Pakistan and Turkey for the purpose ofpromoting economic, technical and cultural cooperationpromoting economic, technical and cultural cooperationamong the Member States. In 1992, the Organization wasamong the Member States. In 1992, the Organization wasexpanded to include seven new members, namely:expanded to include seven new members, namely:Afghanistan, Azerbaijan, Kazakhstan, Kyrgyz Republic,Afghanistan, Azerbaijan, Kazakhstan, Kyrgyz Republic,Tajikistan, Turkmenistan and Uzbekistan.Tajikistan, Turkmenistan and Uzbekistan.

The Organization has a permanent Secretariat in Tehran IranThe Organization has a permanent Secretariat in Tehran Iranheaded by a Secretary General. Mr. Khursheed Anwar, fromheaded by a Secretary General. Mr. Khursheed Anwar, fromPakistan is the current Secretary General of ECOPakistan is the current Secretary General of ECOSecretariat.Secretariat.

ECO Trade Agreement was approved in 2005 in Turkey andECO Trade Agreement was approved in 2005 in Turkey andneed ratification by member governments after which it willneed ratification by member governments after which it willbecome operational.become operational.

Dispute SettlementDispute Settlement


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Dispute SettlementDispute Settlement

Mechanism (DSM) of theMechanism (DSM) of theWTOWTO

ByByAbdul Aleem khanAbdul Aleem khan

Economist, Advisory Unit,Economist, Advisory Unit,


Introduction to the DSUIntroduction to the DSU


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Introduction to the DSUIntroduction to the DSU

What is WTOs DSS & DSUWhat is WTOs DSS & DSU

Need for a DSUNeed for a DSU

Principles: equitable, fast, effective,Principles: equitable, fast, effective,

mutually acceptablemutually acceptable

How are disputes settled?How are disputes settled? The case has been decided: what next?The case has been decided: what next?

What is WTOs DSUWhat is WTOs DSU


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What is WTOs DSUWhat is WTO s DSU

WTOs DSU is the Central Pillar of MTSWTOs DSU is the Central Pillar of MTS

Evolved through years of negotiationsEvolved through years of negotiations

Important achievement of URImportant achievement of UR

Based on Clearly defined rulesBased on Clearly defined rules



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System without DSU is fragileSystem without DSU is fragile Enhances the Practical Value of theEnhances the Practical Value of the

CommitmentsCommitments

Settles disputes in a timely & structuredSettles disputes in a timely & structuredmannermanner

Mitigates the imbalances betweenMitigates the imbalances between

stronger and weaker playersstronger and weaker players

Members Trust it!Members Trust it!

Improvements over GATT 1947Improvements over GATT 1947


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pp

- a set of Principles- a set of Principles The system is designed to be: Equitable,The system is designed to be: Equitable,

Fast, Effective, Mutually AcceptableFast, Effective, Mutually Acceptable

Following agreed procedures instead ofFollowing agreed procedures instead of

taking unilateral actiontaking unilateral action Clearly defined stagesClearly defined stages

Flexible-but not so flexible deadlinesFlexible-but not so flexible deadlines

A case shall normally take 12-15 monthsA case shall normally take 12-15 months

Blocking the ruling is difficultBlocking the ruling is difficult

Encourages consultation & mediationEncourages consultation & mediation

How are Disputes Settled?How are Disputes Settled?


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How are Disputes Settled?How are Disputes Settled?

Settling disputes is the responsibilitySettling disputes is the responsibilityof DSB.of DSB.

Consultation (1st stage up to 60Consultation (1st stage up to 60

days)days)The Panel (2The Panel (2ndnd stage 45 days + 6stage 45 days + 6

months)months)

How the Panel works?How the Panel works?

How the Panel Works?How the Panel Works?


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How the Panel Works?How the Panel Works?

Before the First HearingBefore the First Hearing First HearingFirst Hearing

RebuttalsRebuttals

ExpertsExperts First DraftFirst Draft

Interim ReportInterim Report

ReviewReview Final ReportFinal Report

The Report becomes a rulingThe Report becomes a ruling

AppealAppeal


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AppealAppeal

Either side can appeal a panels ruling.Either side can appeal a panels ruling.(Sometimes both sides do so)(Sometimes both sides do so)

Each appeal is heard by 3 members of aEach appeal is heard by 3 members of a

permanent 7-member Appellate Bodypermanent 7-member Appellate Body

The appeal can uphold, modify or reverseThe appeal can uphold, modify or reverse

the panels legal findings and conclusions.the panels legal findings and conclusions.

DSB has to accept or reject the appealsDSB has to accept or reject the appeals

report within 30 daysreport within 30 days

The case has been decidedThe case has been decided


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what next?what next? Bring Policy in line with the RulingBring Policy in line with the Ruling Inform the DSBInform the DSB

Adjustment PeriodAdjustment Period

Mutually Acceptable CompensationMutually Acceptable Compensation Limited Trade SanctionsLimited Trade Sanctions

How to impose sanctions?How to impose sanctions?

DSB watchesDSB watches

Pakistans ExperiencePakistans Experience


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Pakistan s ExperiencePakistan s Experience

As complainant as respondent as third party3 cases: 2 cases: 9 cases:

1 DS58 US DS36 EC DS32 US

2 DS192 US DS107 US DS33 US

3 DS327 Egypt DS58 US

4 DS190 Argentina

5 DS243 US

6 DS246 EC

7 DS267 US

8 DS334 Turkey9 DS367

Australia

Major CasesMajor Cases


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Dispute

Number

Description Request forConsultations

PAKISTAN AS COMPLAINANT DS58DS58 United States Import Prohibition of Certain Shrimp and Shrimp Products

(Complainants: India; Malaysia; Pakistan; Thailand)8 October 1996

DS192DS192United States Transitional Safeguard Measure on Combed Cotton Yarn fromPakistan (Complainant: Pakistan)

3 April 2000

DS327DS327Egypt Anti-Dumping Duties on Matches from Pakistan (Complainant:Pakistan)

21 February 2005

PAKISTAN AS RESPONDENT

DS36DS36 Pakistan Patent Protection for Pharmaceutical and Agricultural ChemicalProducts (Complainant: United States)

30 April 1996

PAKISTAN AS THIRD PARTY

DS243DS243United States Rules of Origin for Textiles and Apparel Products (Complainant:India)

11 January 2002

DS246DS246European Communities Conditions for the Granting of Tariff Preferences toDeveloping Countries (Complainant: India)

5 March 2002

DS267DS267United States Subsidies on Upland Cotton (Complainant: Brazil) 27 September 20

02

OTHER CASES

DS316DS316European Communities Measures Affecting Trade in Large Civil Aircraft(Complainant: United States)

6 October 2004

DS317DS317United States Measures Affecting Trade in Large Civil Aircraft (Complainant:European Communities)

6 October 2004

DS347DS347European Communities Measures Affecting Trade in Large Civil Aircraft

(Second Complaint) (Complainant: United States)

31 January 2006

DS 58: Import Prohibition of CertainDS 58: Import Prohibition of Certain


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pp

Shrimp and Shrimp ProductsShrimp and Shrimp Products

Complainant: Pakistan, Malaysia, India, ThailandComplainant: Pakistan, Malaysia, India, Thailand

Respondent: USARespondent: USA

Third Parties:Third Parties: Australia; Colombia; Costa Rica; EuropeanAustralia; Colombia; Costa Rica; European

Communities; Ecuador; El Salvador; Guatemala; HongCommunities; Ecuador; El Salvador; Guatemala; Hong

Kong, China; Japan; Mexico; Nigeria; Pakistan;Kong, China; Japan; Mexico; Nigeria; Pakistan;

Philippines; Senegal; Singapore; Sri Lanka; VenezuelaPhilippines; Senegal; Singapore; Sri Lanka; Venezuela

8 October 1996: Complainants requested for8 October 1996: Complainants requested for

consultation concerning a ban on Importation of Shrimpconsultation concerning a ban on Importation of Shrimp

& Shrimp Products from the complainants, imposed by& Shrimp Products from the complainants, imposed byUS under section 609 of US Public Law 101-162.US under section 609 of US Public Law 101-162.

Violations of Articles I, XI and XIII of GATT 1994, as wellViolations of Articles I, XI and XIII of GATT 1994, as well

nullification and impairment of benefits, were alleged.nullification and impairment of benefits, were alleged.

DS 58 (cont )DS 58 (cont.)


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DS 58 (cont.)DS 58 (cont.) 9 January 1997: Malaysia and Thailand requested the9 January 1997: Malaysia and Thailand requested the

establishment of a panel.establishment of a panel. 22 Jan 1997: the DSB deferred the establishment of a panel.22 Jan 1997: the DSB deferred the establishment of a panel.

30 January 1997: Pakistan also requested the establishment of a30 January 1997: Pakistan also requested the establishment of a

panel.panel.

25 February 1997: DSB established a panel25 February 1997: DSB established a panel

25 February 1997: India also requested the establishment of a25 February 1997: India also requested the establishment of apanel on the same matter.panel on the same matter.

20 March 1997: DSB deferred the establishment of a panel.20 March 1997: DSB deferred the establishment of a panel.

10 April 1997: Further to a second request to establish a panel by10 April 1997: Further to a second request to establish a panel by

India, the DSB agreed to establish a panel. It was also agreed toIndia, the DSB agreed to establish a panel. It was also agreed to

incorporate this panel with that already established in respect ofincorporate this panel with that already established in respect ofthe other complainants.the other complainants.

On 15 April 1997, the Panel was composed.On 15 April 1997, the Panel was composed.

DS 58 (cont )DS 58 (cont )


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DS 58 (cont.)DS 58 (cont.)

15 May 1998: Report of the Panel was circulated to Members.15 May 1998: Report of the Panel was circulated to Members. The Panel found that the import ban in shrimp and shrimp products asThe Panel found that the import ban in shrimp and shrimp products as

applied by the United States is inconsistent with Article XI:1 of GATT 1994,applied by the United States is inconsistent with Article XI:1 of GATT 1994,

and cannot be justified under Article XX of GATT 1994.and cannot be justified under Article XX of GATT 1994.

13 July 1998: the US notified its intention to appeal certain issues of law13 July 1998: the US notified its intention to appeal certain issues of law

and legal interpretations developed by the Panel.and legal interpretations developed by the Panel.

12 October 1998: Appellate Bodys Report was circulated to Members.12 October 1998: Appellate Bodys Report was circulated to Members. The Appellate Body reversed the Panels finding that the US measure atThe Appellate Body reversed the Panels finding that the US measure at

issue is not within the scope of measures permitted under the chapeau ofissue is not within the scope of measures permitted under the chapeau of

Article XX of GATT 1994, but concluded that the US measure, whileArticle XX of GATT 1994, but concluded that the US measure, while

qualifying for provisional justification under Article XX(g), fails to meet thequalifying for provisional justification under Article XX(g), fails to meet the

requirements of the chapeau of Article XX.requirements of the chapeau of Article XX.



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DS 58 (cont.)DS 58 (cont.)

6 November 1998: The DSB adopted the Appellate Body Report and the6 November 1998: The DSB adopted the Appellate Body Report and thePanel Report, as modified by the Appellate Body Report.Panel Report, as modified by the Appellate Body Report.

On 25 November 1998, the US informed the DSB that it was committed toOn 25 November 1998, the US informed the DSB that it was committed to

implementing the recommendations of the DSB and was looking forwardimplementing the recommendations of the DSB and was looking forward

to discussing with the complainants the question of implementation. Theto discussing with the complainants the question of implementation. The

parties to the dispute announced that they had agreed on anparties to the dispute announced that they had agreed on animplementation period of 13 months from the date of adoption of theimplementation period of 13 months from the date of adoption of the

Appellate Body and Panel Reports, i.e. it expired on 6 December 1999.Appellate Body and Panel Reports, i.e. it expired on 6 December 1999.

On 22 December 1999, Malaysia and the United States informed the DSBOn 22 December 1999, Malaysia and the United States informed the DSB

that they had reached an understanding regarding possible proceedingsthat they had reached an understanding regarding possible proceedings

under Articles 21 and 22 of the DSU.under Articles 21 and 22 of the DSU.



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DS 58 (cont.)DS 58 (cont.) 27 January 2000: US stated that it had implemented the27 January 2000: US stated that it had implemented the

DSBs rulings and recommendations.DSBs rulings and recommendations.

12 October 2000: Malaysia requested that the matter be12 October 2000: Malaysia requested that the matter be

referred to the original panel pursuant to Article 21.5 of thereferred to the original panel pursuant to Article 21.5 of the

DSU, considering that by not lifting the import prohibition andDSU, considering that by not lifting the import prohibition and

not taking the necessary measures to allow the importationnot taking the necessary measures to allow the importation

of certain shrimp and shrimp products in an unrestrictiveof certain shrimp and shrimp products in an unrestrictivemanner, the US had failed to comply with themanner, the US had failed to comply with the

recommendations and rulings of the DSB.recommendations and rulings of the DSB.

23 October 2000: DSB referred the matter to the original23 October 2000: DSB referred the matter to the original

panel pursuant to Article 21.5 DSU.panel pursuant to Article 21.5 DSU.

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