بسماهللالرحمنالبسماهللالرحمنال رحيمرحيم

In The Name Of Allah most Beneficent The most In The Name Of Allah most Beneficent The most MercifulMerciful

PRESENTED BY:

MUHAMMAD ADNAN HYE

WTO and Pakistan:WTO and Pakistan:opportunities and opportunities and policy challenges.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

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

The GATT TRADE Rounds, 1947-93

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( Uruguay Round)

123 Tariffs, non- tariff measures, agriculture, services , textiles Intellectual property, dispute Settlement, creation of WTO

34

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)

Good Non-quota countries   Quota countries  Quota utilization

      Yarn        95     5       99.40

     Fabrics    72    28       99.80

     Made-ups    71    71       98.10

PERCENTAGE

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

Decrease Price

Increase Price3.8%

2.1%

1.8%

1.2%

0.9%

wheat Course Grain sugar

Cotton Rice

There will be welfare losses for Pakistan due to agriculture trade liberalization

27.2 Million US$

43 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)

Possible Commitments Made commitments

620

108

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 exemptionsTo 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 trade-

related investment measure

Agreement on trade-related intellectual property rights

Dumping issues Eco-and social-dumping

issues

A strategic direction

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END OF PRESENTAION