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Finding access to
WTO?s tough regime
FIGHTING our way into the tough world of the World Trade
Organization (WTO) is a tremendous task. While it is full of
opportunities for our industry, business and exports, the
challenges are formidable.
However, the Senate has taken an initiative and is understood
to have drafted a plan designed to benefit the country from
the WTO regime.
The Senate?s special committee on WTO challenges, has worked
for nearly two years under its Chairman, Senator Dr Abdul
Hafeez Sheikh, Minister for Privatization and Investment to
prepare its report and recommendations that will go to Senate
for approval.
Its members, prominent figures in their own right, are
believed to have recommended mechanisms and strategies to make
our economic and business interests move ahead in a systematic
manner.
Pakistan has enforced and is implementing most of the WTO
philosophy, agreements and rules for the last ten years. It
started with trade liberalization as far back as 1980s, by
slashing its highest tariff from 225 to merely 25 per cent.
The tariff slabs were reduced to four. Ministry of Commerce (MoC)
says the trade weighted tariff now is merely 11?12 per cent.
Imports have been liberalized to the extent that there are no
quotas and one does not require any licence to import.
In order to conform to WTO agreements and rules, Pakistan?s
compliance has been comprehensive? in the form of legislation,
rules, procedures and enforcement. MoC and other ministries
have piloted, and got enacted, a whole array of WTO-related
legislation to regulate the business, covering various sectors
of both imports and exports.
It is complying with market access, domestic support and
export subsidies?the three pillars of the Agreement on
Agriculture, by reducing tariff on each line, conversion of
regulatory duty to a fixed specific one. Applied rates on farm
imports are very low.
National Tariff Commission is overseeing enforcement of WTO-conforming
safeguard measures law in the light of Agreement on Subsidies
and Counterveiling Measures.
Pakistan now has more than 4,500 standards for textiles,
chemicals, electronics, farm products, food and other items
that should help it export more to the global markets.
It has been eliminating subsidies on exports and legislation
is in place to help foreign firms operate in Pakistan in the
services sector. As part of these measures, subsidised bank
lending rates for specific sectors have been eliminated.
Pakistan has, so for, committed itself to only half of the 12
services sectors. These include financial, telecom, health,
engineering and construction, tourism and business services.
Only 24 countries have undertaken WTO-conforming steps
covering trade related investment measures (TRIMS). Pakistan
is one of them. Pakistan Intellectual Property Rights
Organization (PIPRO) has been established to ensure
enforcement of intellectual property rights to make them
comply with TRIPS.
While all stake holders have been moving forward on compliance
with WTO agreements, rules and procedures, steps will have to
be taken to ensure a larger and well-deserved share of
business in the expanding global market. It is in this context
that the Parliamentary efforts, based on ensuring the
interests of all stakeholders, come into focus.
?We will go ahead, and comply what the Parliament and the
government decides on implementing the WTO regime, and expect
them to ensure our business interests.? This is the consensus
among the stakeholders and the business organizations, one
hears. Everyone hopes, the Parliament and the government move
successfully in that direction.
There are, however, concerns on this count and have to be
taken care of. The reason is that, since WTO came into
operation, advanced nations have levied high tariffs on items
of export interest to developing countries like Pakistan. On
the other hand, the advanced countries, generally, have made
only small reductions in their tariff on products that are
exported by developing nations.
Pakistan will have to fight against the increasing number and
severity of technical and regulatory barriers that advanced
countries employ to hinder exports of developing countries. It
requires to develop systems and policies to ensure compliance
with WTO standards and technical regulations so that its
exports expand and are unhindered by steps being taken by
advanced countries.
It needs to develop scientific and technical institutions and
experts to help exports, especially by setting up national
regulatory institutions, process technologies, and extensive
research.
In order to improve competition and fight anti-competitive
actions abroad, Pakistan can support formation of an
international body for the task. Domestically, the 35-year old
Monopoly Control Authority (MCA) which has become virtually
toothless, should be fortified.
Another likely proposal is to undertake tariff rationalization
that will promote businesses and sectors in which Pakistan
traditionally has a clear advantage.
Pakistan, sources say, will support conclusion of a WTO
agreement on movements of manpower and workers, because we
have surplus manpower which can be profitably employed abroad.
It will not only help Pakistan benefit from enlarged home
remittances, but our workers will also improve their skills
and expertise while working abroad in a more capital intensive
environment and latest technology.
It has to fight against restrictions on labour movement that
have followed, directly or indirectly, in the wake of 9/11.
Pakistani workers who become redundant at home due to free
imports and foreign competition, will have to be retrained for
jobs in fields where Pakistan has a comparative advantage, and
they are re-employed.
Several stakeholders are understood to have presented their
viewpoint to the Committee and recommended sector-specific
strategies for international negotiations an securing
Pakistan?s interest. This is what the trade bodies have to
say:
The Federation of Pakistan Chambers of Commerce and Industry (
FPCC&I ) sources said, it will like to ensure a role for
legislators and setting a consultation process, prior to
entering into agreements or understanding on foreign fora. It
will like continuation of tariff and non-tariff protective
measures through extensions for some of the sectors.
The All Pakistan Textile Mills Association (APTMA), it is
understood, will like continuation of low interest rates and a
stable exchange rate, transparent and consistent government
policies, focused research and financing of orgnizations in
garment sector in particular, an awareness of who its foreign
competitors are, human resource development, setting up of
textile testing and certification labs, and measures to
attract large FDI inflows.
Pakistan Pharmaceutical Manufacturers Association( PPMA )is
understood to maintain that under Trips, multinationals will
gain and earn huge profits through their sale of new products
at higher rates, and for longer duration under increased
patent protection. The interest of the poor in developing
countries will be harmed because they will have no access to
new and essential pharmaceuticals.
Pakistan Carpet Manufacturers and Exporters (PCM&EA) whose
hand knotted carpets are wholly exportable, proposes setting
up of a carpet city first at Lahore and then at Karachi to
protect against environmental hazard. It also has proposed
setting up a carpet export development board to look after
research, developing marketing and arranging exhibitions, at
home and abroad, by itself, rather than the EPB.
TRIMs is considered by Pakistan Automobile Manufacturers
Association(PAMA) to be its key headache. Trims lays down that
measures contrary to GATT rules should be phased out. Auto
manufacturers are using the infant-industry-like arguments
saying it is in take off stage, and when it is fully
established, it will be an engine for growth of engineering.
It supports a mechanism to eliminate under-invoicing on future
import of auto parts.
Pakistan Sugar Mills Association (PSMA) proposes that in order
to compete cheap EU sugar, Pakistan should join
Brazil-Australia Group to jointly complain to Dispute
Settlement Forum of WTO against sugar subsidies. It can also
discount European subsidies through domestic steps to cut cost
of sugar production, or it should levy additional duty on
subsidized sugar when it is imported.
These actions will help the country prepare itself not only to
successfully face the future competition, but will also earn
for Pakistan a prominent place in the global market.
The DAWN
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Pakissan.com;
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