Transcript WTO and Pakistan: opportunities and policy challenges.

‫ﺑﺴﻡﺍﷲﺍﻠﺮﺤﻤﻦﺍﻠﺮﺤﻴﻢ‬
In The Name Of Allah most Beneficent The most Merciful
PRESENTED BY:
MUHAMMAD ADNAN HYE
WTO and Pakistan:
opportunities and policy
challenges.
In 1930 Smoot-Hawley tariff act under which the average import duty in
the U S A reached the all time high of 59% in 1930, provoking foreign
retaliation.
In 1932 , 60 countries retaliated with stiff tariff increases of their own, in the
face of the deepening world depression. The result was a collapse of world
trade and this contributed in a significant way to the spreading and the
deepening of the depression around the world.
Trade agreement act of 1934
Trade legislation were based on the most-favored nation
The GATT TRADE Rounds, 1947-93
Year
Place/
Name
Number of
participating
country
Subject
covered
% cut in
Tariffs
1947
Geneva
23
Tariffs
21
1949
Annecy
13
Tariffs
2
1951
Torquay
38
Tariffs
3
1956
Geneva
26
Tariffs
4
1960-61
Geneva
(Dillon round)
26
Tariffs
2
1964-67 Geneva
( Kennedy
Round)
62
Tariffs and antidumping
measures
35
1973-79 Geneva
( Tokyo Round)
102
Tariffs, non-tariff
measures,
Multilateral measures
33
1986-93 Geneva
123
Tariffs, non- tariff
measures, agriculture,
services , textiles
Intellectual property,
dispute Settlement,
creation of WTO
34
( Uruguay Round)
SOURCE: WTO newsletter ( Geneva, May 1998 ), P.2
OPPORTUNITIES:
With the implementation of the agreement Pakistan’s major exports
would receive significant tariff reduction from the DC’s and the LDC’S.
Pakistani exports will face a weighted average post-round tariff
AGREEMENT ON TEXTILE AND CLOTHING
The multi-fiber agreement (MFA) is an arrangement to manage textile
and clothing trade. The MFA allotted quotas to regulate imports of
textiles and clothing into developed countries from developing
countries.
MFA applies to 80% of the world textile and clothing exports with
around 40% participants and 100 bilateral restraint agreements. MFA
quotas have thus led to a loss in the export earnings of developing
countries.
The textile and clothing sector in PAKISTAN is an important segment
of the economy .It accounts for 8% of GDP and 30% of the value added
and 40% of the labor force in the manufacturing sector and the 75% of
merchandise exports.
The MFA Is clearly discriminatory and thereby openly violates the
basic principal of the WTO.Pakistan’s textile and clothing exports are
largely directed towards quota countries, particularly the high value
added products whose quota utilization rate are very high .
PERCENTAGE
(Percentage)
Good
Non-quota countries
Quota countries
Quota utilization
Yarn
95
5
99.40
Fabrics
72
28
99.80
Made-ups
71
71
98.10
In case of clothing
Gains from trade liberalization
Scenario-1
Scenario-2
500
1300
AGREEMENT ON AGRICULTURE
The implementation of the agreement Ingco and winters (1995)
predict that for Pakistan’s major agricultural imports real prices
Increase Price
3.8%
2.1%
1.8%
Cotton
wheat
Rice
Course Grain sugar
0.9%
Decrease Price
1.2%
There will be welfare losses for Pakistan due to agriculture trade
liberalization
43 Million US$
27.2 Million US$
Through Reforms
Potential Induce Investment and
increasing returns in the sector
are also taken into account
GENERAL AGREEMENT ON TRADE IN SERVICES
In this agreement, first round of negotiations has
achieved limited liberalization; however it has opened
the door of liberation in future.
Participation in GATS provides opportunity to
increase the efficiency in service sectors.
Greater access to higher quality service inputs.
Market access for its own competitive service exports
such as construction service and professional service
(Low wage skill labor)
620
108
Possible Commitments
Made commitments
35.2%
27.8%
No national treatment
limitation
No market access
limitation
Agreement on trade – related investment
measures
The TRIM’S
agreement prohibits a number of conditions which
government often imposes on foreign investment to encourage
investment in accordance with national priorities.
Under agreement:
Pakistan attracts foreign investment by extending many attractive
incentives to foreigners. i.e.
Tariff exemptions
To induce multinational enterprises to meet a minimum level of
performance criteria.
With the removal of restrictions on foreign investment, Pakistan may
be successful in attracting more foreign investment.
Agreement on trade-related intellectual property
rights
With implementations of this, increases demand for royalty
payments and restrictions on the transfer of technology.
Dynamic gains is that increase in the supply in the foreign
knowledge and technology under the TRIPs environment should
stimulate the domestic R & D activities and ultimately promote the
technological-led development in the country.
POLICY CHALLENGES





Textiles and clothing
Agriculture
Services
Agreement on traderelated investment
measure


Agreement on trade-related
intellectual property rights
Dumping issues
Eco-and social-dumping
issues
A strategic direction
END OF PRESENTAION
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