International Trade and the WTO By WTO Cell Trade Development Authority of Pakistan 3 rd September 2008

International Trade and the International Trade and the WTOWTO

ByBy

WTO CellWTO Cell

Trade Development Authority of Trade Development Authority of PakistanPakistan

33rdrd September 2008 September 2008

International Trade and the International Trade and the WTOWTO

WTO – An Introduction WTO – An Introduction GATT: GATT: Negotiations on Agriculture in the WTO Negotiations 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 WTO’s Dispute Settlement MechanismWTO’s Dispute Settlement Mechanism

ByBy

Abdul Aleem KhanAbdul Aleem Khan

Economist, Advisory Unit, Economist, Advisory Unit,

WTO Cell, TDAPWTO Cell, TDAP

WTO – An IntroductionWTO – An Introduction

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

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

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

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

It aims to provide fair and stable conditions for the It aims to provide fair and stable conditions for the conduct of international trade with a view to conduct of international trade with a view to encouraging trade and investment that will raise encouraging trade and investment that will raise living standards worldwide.living standards worldwide.

WTO is a forum where countries continuously WTO is a forum where countries continuously negotiate exchanges of trade concessions to negotiate exchanges of trade concessions to further lower the trade barriers all over the world.further lower the trade barriers all over the world.

WTO – WTO – An IntroductionAn Introduction (cont…. 2)(cont…. 2)

Decisions within the WTO are made by Decisions within the WTO are made by member countries, not by staff and by member countries, not by staff and by consensus, not by formal vote.consensus, not by formal vote.

High-level policy decisions are made by the High-level policy decisions are made by the Ministerial Conference, which is a body of Ministerial Conference, which is a body of political representatives (trade ministers) political representatives (trade ministers) which meet at least every two years.which meet at least every two years.

Operational decisions are made by the General Operational decisions are made by the General Council ( representative from each member Council ( representative from each member country) which meets monthly and chair country) which meets monthly and chair rotates annually.rotates annually.

WTO – WTO – An IntroductionAn Introduction (cont…. 3)(cont…. 3) GATT came into force in1948 with 23 GATT came into force in1948 with 23

founding members.founding members.

It was intended to promote It was intended to promote nondiscrimination in trade among nondiscrimination in trade among countries, with the view that open trade countries, with the view that open trade was crucial for economic stability and was crucial for economic stability and peace.peace.

Different trade rounds were held so as Different trade rounds were held so as to liberalize the trade.to liberalize the trade.

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

23 Countries participated23 Countries participatedDecided to cut 45,000 trade tariffsDecided to cut 45,000 trade tariffs

22ndnd Round - Round - France in 1949France in 194913 Countries participated13 Countries participatedProposed further reductions in 5,000 tariffsProposed further reductions in 5,000 tariffs

33rdrd Round - Round - Britain in 1950-51Britain in 1950-5138 Countries participated38 Countries participatedProposed further reductions in 8,700 tariffsProposed further reductions in 8,700 tariffs

44thth Round - Round - Geneva in 1955-56Geneva in 1955-5626 Countries participated26 Countries participatedProposed 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 participatedProposed 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 1964-6762 Countries participated62 Countries participatedDecided on substantial tariffs reductions on all industrial productsDecided on substantial tariffs reductions on all industrial products

covering US$40bn of trade.covering US$40bn of trade.

GATT and WTO GATT and WTO Trade Rounds … Cont… 2Trade Rounds … Cont… 2

77thth Round Round - - (Tokyo Round) in Geneva in 1973-79(Tokyo Round) in Geneva in 1973-79102 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 1986-94123 countries participated123 countries participatedThe round led to the creation of WTO, and extended the range of trade The round led to the creation of WTO, and extended the range of trade negotiations, leading to major reductions in tariffs (about 40%) and negotiations, leading to major reductions in tariffs (about 40%) and

agricultural subsidies, an agreement to allow full access for agricultural subsidies, an agreement to allow full access for textiles and textiles and clothing from developing countries, and an extension of clothing from developing countries, and an extension of intellectual property intellectual property rights.rights.

99thth Round - Round - (Doha Round) started - in Doha in 2001 ( at forth Ministerial (Doha Round) started - in Doha in 2001 ( at forth Ministerial Conference)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 - in Hong Kong in 2005 (at sixth Ministerial

Conference)Conference)- in Geneva in July 2006 (at seventh Ministerial - in Geneva in July 2006 (at seventh Ministerial

ConferenceConference Not yet concluded.Not yet concluded.

141 countries participated, 141 countries participated, Subject covered are tariffs, non-tariffs measures, agriculture, labour Subject covered are tariffs, non-tariffs measures, agriculture, labour

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

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 Phytosanitary Agreement on Technical Barriers to Trade (TBT) and on Sanitary and Phytosanitary Measures (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 )

GATTGATTNegotiations on Negotiations on

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

Mujeeb Ahmed KhanMujeeb Ahmed KhanHead WTO CellHead WTO Cell


Agreement on Agriculture - ObjectivesAgreement on Agriculture - Objectives

To establish a fair and market-oriented agriculture To establish a fair and market-oriented agriculture trading system.trading system.

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

To establish strengthened and operationally To establish strengthened and operationally effective rules and disciplines.effective rules and disciplines.

To provide for substantial progressive reduction in To provide for substantial progressive reduction in support and protection.support and protection.

To correct and prevent restrictions and distortions To correct and prevent restrictions and distortions in world agricultural markets.in world agricultural markets.

To achieve specific binding commitments To achieve specific binding commitments in ;market access, domestic support and export in ;market access, domestic support and export competition.competition.

Special and Differential treatment for Special and Differential treatment for developing countriesdeveloping countries

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

While implementing their commitments the While implementing their commitments the developed countries to take fully into account the developed countries to take fully into account the particular needs and conditions of developing particular needs and conditions of developing countries.countries.

Greater market access for agriculture products of Greater market access for agriculture products of particular interest to developing countries.particular interest to developing countries.

Fullest liberalization of trade in tropical products Fullest liberalization of trade in tropical products and products of importance to the diversification and products of importance to the diversification of production from the growing of illicit narcotic of production from the growing of illicit narcotic crops.crops.

Reduction commitments in the Uruguay Reduction commitments in the Uruguay RoundRound

Developed Developing Developed Developing

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

Market Access Market 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 of Total cuts in aggregate measurement of support -20% -13%support -20% -13%

Export Subsidies Export Subsidies Value cut -36% -24%Value cut -36% -24% Volume Cut -21% -14%Volume Cut -21% -14%

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 reduction Amber Box - AMS-subject to reduction commitments;commitments;

- Product specific (MSP)- Product specific (MSP) - Non product specific (input subsidies; fertilizers, - Non product specific (input subsidies; fertilizers,

power, irrigation etcpower, irrigation etc

Domestic Support (contd)Domestic Support (contd)

De minimis support;De minimis support;

Allowed WTO Members to exempt from the Allowed WTO Members to exempt from the calculation of the AMS, below a certain threshold calculation of the AMS, below a certain threshold level;level;

- Developed countries: 5% of the value of - Developed countries: 5% of the value of agricultural production of the product agricultural production of the product concerned and 5% of total value of agricultural concerned and 5% of total value of agricultural production.production.

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

The Doha Mandate for negotiationsThe Doha Mandate for negotiations

““We commit ourselves to comprehensive We 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, all Reductions of, with a view to phasing out, all forms of EXPORT SUBSIDIES;forms of EXPORT SUBSIDIES;

Substantial reductions in trade distorting Substantial reductions in trade distorting DOMESTIC SUPPORT.DOMESTIC SUPPORT.

Negotiating priorities for PakistanNegotiating priorities for Pakistan

Highest possible tariff reductions. (even U.S Highest possible tariff reductions. (even U.S proposal for 55%-90% for developed and slightly proposal for 55%-90% for developed and slightly less for developing)less for developing)

Maximum tariff caps.(75% for developed and Maximum tariff caps.(75% for developed and 100% for developing)100% for developing)

Expansion of tariff rate quotas. (from the current Expansion of tariff rate quotas. (from the current 5% to 20% of domestic consumption, with and 5% to 20% of domestic consumption, with and end-date agreed for their eventual elimination)end-date agreed for their eventual elimination)

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

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

Sensitive products must be limited to maximum Sensitive products must be limited to maximum of 1% -2% of all tariff lines.of 1% -2% of all tariff lines.

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

A Special Safeguard Mechanism, with strict and A Special Safeguard Mechanism, with strict and transparent guidelines.transparent guidelines.


Elimination of Tariff escalation through the use of Elimination of Tariff escalation through the use of progressively higher tariff reductions for more progressively 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 the proposal of 80% reduction for EU and 70% for the U.S).U.S).

Product specific caps for the Amber Box and the Product specific caps for the Amber Box and the Blue Box.Blue Box.


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

Commitment to review the Green and Blue box Commitment to review the Green and Blue box criteria to ensure that these programs are truly criteria to ensure that these programs are truly non-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.

ByBy

Tippu SultanTippu Sultan

Head Advisory Unit, WTO CellHead Advisory Unit, WTO Cell

TDAPTDAP

NAMA NegotiationsNAMA Negotiationsin the WTO in the WTO

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 that The Doha Ministerial Declaration requires that negotiations should aim by modalities to be agreed negotiations should aim by modalities to be agreed upon 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 developing Allow less than full reciprocity to developing countries in making reduction commitments.countries in making reduction commitments.

NAMA Tariff Cut formulasNAMA Tariff Cut formulas The United States (US) has proposed to use simple Swiss The United States (US) has proposed to use simple Swiss

formula with a negotiated coefficient.formula with a negotiated coefficient.

The US elaborated that there could be two coefficients, one The US elaborated that there could be two coefficients, one separately applied by developing countries and another applied separately applied by developing countries and another applied by developed countries.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 Coefficient (a) x Initial tarifftariff

Coefficient (a) + Initial tariffCoefficient (a) + Initial tariff

Where the:Where the:

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

CoefficientCoefficient is a figure to be negotiated is a figure to be negotiated

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

In 6In 6thth Ministerial Conference at Hong Kong, the EU and US proposed using Ministerial Conference at Hong Kong, the EU and US proposed using coefficient of coefficient of a = 10a = 10 for developed countries and a coefficient of for developed countries and a coefficient of a = 15a = 15 for for developing countries.developing countries.

THE ABI formula: THE ABI formula: The second proposal has been presented by Argentina, Brazil and India, The second proposal has been presented by Argentina, Brazil and India, modified Swiss-type formula, which incorporates national tariff averages into modified Swiss-type formula, which incorporates national tariff averages into the formula reducing the impact of the coefficient and establishing a linkage the formula reducing the impact of the coefficient and establishing a linkage between tariff reductions and a country’s current tariff levels. It is expressed between tariff reductions and a country’s current tariff levels. It is expressed as follows: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 (Coefficient x National average of bond rates) + Initial

tarifftariffWhere the:Where the:

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

CoefficientCoefficient is a figure to be negotiated is a figure to be negotiated

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

Different Proposals …. Cont…Different 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 the Pakistan put forward a proposal to bridge the difference between the supporters of the difference between the supporters of the Simple Swiss formula and the supporters of Simple Swiss formula and the supporters of the ABI formula. the ABI formula.

The coefficients proposed by Pakistan would The coefficients proposed by Pakistan would be around be around a = 6a = 6 for developed countries and for developed countries and around around a = 30a = 30 for developing countries for developing countries

Pakistan’s position after NAMA Pakistan’s position after NAMA NegotiationsNegotiations

Pakistan is fairly comfortably place in this Pakistan is fairly comfortably place in this negotiation, because:negotiation, because:

a)a) Our tariff rates are relatively lowOur tariff rates are relatively low

b)b) We are hardly giving any subsidyWe are hardly giving any subsidy

c)c) Our reliance on custom revenue has Our reliance on custom revenue has reduced drastically and constitutes only reduced drastically and constitutes only 15% of our total revenue.15% of our total revenue.

ConclusionsConclusions

In order to get greater market access, we would In order to get greater market access, we would like 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 in Reduction / elimination of peak tariffs in developed countries in products of our export developed countries in products of our export interest; most of their tariffs are otherwise very interest; most of their tariffs are otherwise very low.low.

c)c) Reduction / elimination of non tariff barriers in Reduction / elimination of non tariff barriers in all countriesall countries

GATSGATS

Presentation by:Presentation by:


Trade Development Authority of PakistanTrade Development Authority of Pakistan

General Agreement on Trade in General 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 containing The first is the framework Agreements containing the basic obligations which apply to all members.the basic obligations which apply to all members.

The second concerns national schedules of The second concerns national schedules of commitments.commitments.

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

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 leaving delivers 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 consumer is in the Pakistani market and receives or uses a service. Examples of this mode include or uses a service. Examples of this mode include tourism, education, machinery sent for repairs tourism, education, machinery sent for repairs etc.etc.

WTO Classification – (contd)WTO Classification – (contd)

Mode III:Mode III: Commercial presence -- when the Commercial presence -- when the Pakistani firm establishes an office abroad; Pakistani firm establishes an office abroad; Illustrations of Mode-III are branches set up by Illustrations 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 -- when movement of natural persons -- when Pakistani service employees travel to another Pakistani service employees travel to another country to provide a service. Examples of this country to provide a service. Examples of this mode are Doctors, engineers, skilled or semi mode are Doctors, engineers, skilled or semi skilled laborers etc.skilled laborers etc.

Commitments on services in the WTOCommitments on services in the WTO

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

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

four modes.four modes.

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

and offer format resulting in submission of revised and offer format resulting in submission of revised

schedules.schedules.

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

Pakistan has submitted its initial offer on 9 services Pakistan 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).

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 Services

3.3. 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 services

8.8. 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

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

i.i. ‘‘Commercial presence' - subject to incorporation in Commercial presence' - subject to incorporation in Pakistan with maximum foreign Pakistan with maximum foreign equity participation ofequity participation of 70%70% is inscribed against a particular sector or subsector. is inscribed against a particular sector or subsector.

ii.ii. Establishments to be located in Export processing zones Establishments to be located in Export processing zones may negotiate higher than 70 percent limits on foreign may negotiate higher than 70 percent limits on foreign investmentinvestment . .

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

SALIENT FEATURES OF ECC APPROVED SALIENT FEATURES OF ECC APPROVED OFFER (contd)OFFER (contd)

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

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

vi.vi. Movement of natural persons - Unbound, Movement of natural persons - Unbound, except for measures concerning the entry or except for measures concerning the entry or temporary stay of natural persons falling in temporary stay of natural persons falling in specified categories. E.g.Intracorporate specified categories. E.g.Intracorporate transferees, Business visitors, Independent transferees, Business visitors, Independent Professionals etc...Professionals etc...

SALIENT FEATURES OF ECC APPROVED OFFER SALIENT FEATURES OF ECC APPROVED OFFER (contd)(contd)

vii. vii. The commitments relating to ‘Professional The commitments relating to ‘Professional services’ apply only to countries that provide services’ apply only to countries that provide similar commitments to Pakistan except natural similar commitments to Pakistan except natural persons qualified in the United Kingdom and the persons qualified in the United Kingdom and the USA.USA.

viii. In specific sectors; Access granted both to viii. In specific sectors; Access granted both to natural persons and companies based on natural persons and companies based on economic needs test. Criteria include rate of economic needs test. Criteria include rate of growth of the services sector recorded by the growth of the services sector recorded by the national accounts in the previous 5 years.national accounts in the previous 5 years.

Pakistan’s offerPakistan’s offer

SALIENT FEATURES OF INITIAL OFFERSSALIENT FEATURES OF INITIAL OFFERS::

i.i. ‘‘Commercial presence' - subject to Commercial presence' - subject to incorporation in Pakistan with maximum foreign incorporation in Pakistan with maximum foreign equity participation ofequity participation of 60%60% is inscribed is inscribed against a particular sector or subsector. In against a particular sector or subsector. In certain sub sectors e.g. Engineering services it certain sub sectors e.g. Engineering services it is is 51%51%..

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

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

iii. ‘Presence of natural persons’ – in certain sub iii. ‘Presence of natural persons’ – in certain sub sectors there are conditions that qualifications for sectors there are conditions that qualifications for foreign service suppliers will be set by the foreign service suppliers will be set by the concerned Pakistani Association/Council and any concerned Pakistani Association/Council and any other relevant law in force.other relevant law in force.

iv. ‘Commercial presence’ – in certain sub sectors iv. ‘Commercial presence’ – in certain sub sectors there are conditions of Economic needs test e.g. there are conditions of Economic needs test e.g. wholesale trade services, Franchising etc.wholesale trade services, Franchising etc.

v. The commitments in Financial Services are given v. The commitments in Financial Services are given to the nationals and financial institutions of the to the nationals and financial institutions of the Members whose laws and policies do not bar the Members whose laws and policies do not bar the provision of similar commitments to the Pakistani provision of similar commitments to the Pakistani nationals and financial institutions.nationals and financial institutions.

Pakistan’s offerPakistan’s 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 As per the ECC mandate all 11 sectors and 86 sub-sectors covered.sub-sectors covered.

ii.ii. Commercial presence' - subject to incorporation Commercial presence' - subject to incorporation in Pakistan with maximum foreign in Pakistan with maximum foreign equity equity participation ofparticipation of 70%70% is inscribed against a is inscribed against a particular sector or sub sector. (ECC mandate)particular sector or sub sector. (ECC mandate)

SALIENT FEATURES OF PROPOSED REVISED SALIENT FEATURES OF PROPOSED REVISED OFFER (contd)OFFER (contd)

iii. No limitations on Market Access or National iii. No limitations on Market Access or National treatment in Cross border supply (mode I) and treatment in Cross border supply (mode I) and Consumption abroad (mode II) except for Consumption abroad (mode II) except for Financial Sector and its sub sectors.Financial Sector and its sub sectors.

iv.iv. Movement of natural persons - Unbound, Movement of natural persons - Unbound, except for measures concerning the entry or except for measures concerning the entry or temporary stay of natural persons falling in temporary stay of natural persons falling in specified categories. E.g.Intracorporate specified categories. E.g.Intracorporate transferees, Business visitors, Independent transferees, Business visitors, Independent Professionals etc...Professionals etc...

SALIENT FEATURES OF PROPOSED SALIENT FEATURES OF PROPOSED REVISED OFFER (contd)REVISED OFFER (contd)

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

vi. No requirement of Economic Need Test for granting vi. No requirement of Economic Need Test for granting Market Access or National Treatment. (ECC plus)Market Access or National Treatment. (ECC plus)

vii.Presence of natural persons’ – in certain sub sectors vii.Presence of natural persons’ – in certain sub sectors there are conditions that qualifications for foreign there are conditions that qualifications for foreign service suppliers will be set by the concerned service suppliers will be set by the concerned Pakistani Association/Council and any other relevant Pakistani Association/Council and any other relevant law in force.law in force.

(Initial offer)(Initial offer)

Pakistan’s View in Service SectorPakistan’s View in Service Sector

Pakistan believes that the liberalization in Pakistan believes that the liberalization in Services sector is in our own interest, as it Services sector is in our own interest, as it will enhance the efficiency of local service will enhance the efficiency of local service suppliers through competition and suppliers through competition and introduction of new techniques apart from introduction of new techniques apart from improving the quality of manufactured improving the quality of manufactured goods, since the service are also inputs for goods, since the service are also inputs for manufacturing.manufacturing.

Pakistan is presently consulting various Pakistan is presently consulting various Domestic stakeholders before a final offer is Domestic stakeholders before a final offer is made.made.

Trade Related Intellectual Property RightTrade Related Intellectual Property Right

TRIPSTRIPSPresentation by:Presentation by:



TRIPSTRIPS

TRIPs included in the single undertaking of TRIPs included in the single undertaking of the URthe UR

It establishes minimum standards for all types It establishes minimum standards for all types of IPRs (but utility models and breedersof IPRs (but utility models and breeders’’ rights) rights)

It is based on and supplements, with It is based on and supplements, with additional obligations, the Paris, Berne, Rome additional obligations, the Paris, Berne, Rome and Washington Conventions and Washington Conventions

It extends to IPRs the principles governing It extends to IPRs the principles governing international trade: MFN, NTinternational trade: MFN, NT

It contains provisions relating to enforcement It contains provisions relating to enforcement of IPRs, amendment and reservationof IPRs, amendment and reservation

TRIPS (cont…2)TRIPS (cont…2)

TRIPS requires member states to provide TRIPS requires member states to provide strong protection for intellectual property strong protection for intellectual property rights. For example, under TRIPS:rights. For example, under TRIPS:

Copyright terms must extend to 50 years Copyright terms must extend to 50 years after the death of the author, although after the death of the author, although films and photographs are only required to films and photographs are only required to have fixed 50 and to be at least 25 year have fixed 50 and to be at least 25 year terms, 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", such and not based upon any "formality", such as registrations or systems of renewal. as registrations or systems of renewal.

TRIPS (cont…3)TRIPS (cont…3) Computer programs must be regarded as Computer programs must be regarded as

"literary works" under copyright law and "literary works" under copyright law and receive the same terms of protection. receive the same terms of protection.

National exceptions to copyright (such as National exceptions to copyright (such as "fair use" in the United States) are "fair use" in the United States) are constrained by the Berne three-step test .constrained by the Berne three-step test .

Patents must be granted in all "fields of Patents must be granted in all "fields of technology," although exceptions for technology," although exceptions for certain public interests are allowed certain public interests are allowed (Art. 27.2 and 27.3 [1]) and must be (Art. 27.2 and 27.3 [1]) and must be enforceable for at least 20 years (Art 33). enforceable for at least 20 years (Art 33).

TRIPS (cont…4)TRIPS (cont…4) Exceptions to the exclusive rights must be Exceptions to the exclusive rights must be

limited, provided that a normal exploitation of the limited, provided that a normal exploitation of the work (Art. 13) and normal exploitation of the work (Art. 13) and normal exploitation of the patent (Art 30) is not in conflict. patent (Art 30) is not in conflict.

No unreasonably prejudice to the legitimate No unreasonably prejudice to the legitimate interests of the right holders of computer interests of the right holders of computer programs and patents is allowed. programs and patents is allowed.

Legitimate interests of third parties have to be Legitimate 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 not In each state, intellectual property laws may not offer any benefits to local citizens which are not offer any benefits to local citizens which are not available to citizens of other TRIPs signatories by available to citizens of other TRIPs signatories by the principles of national treatment (with certain the principles of national treatment (with certain limited exceptions, Art. 3 and 5 [2]). TRIPS also limited exceptions, Art. 3 and 5 [2]). TRIPS also has a most favored nation clause. has a most favored nation clause.

TRIPS (cont…5)TRIPS (cont…5)

Many of the TRIPS provisions on copyright were Many of the TRIPS provisions on copyright were imported from the Berne Convention for the imported from the Berne Convention for the Protection of Literary and Artistic Works and Protection of Literary and Artistic Works and many of its trademark and patent provisions were many of its trademark and patent provisions were imported from the Paris Convention for the imported from the Paris Convention for the Protection of Industrial Property.Protection of Industrial Property.

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

Tippu SultanTippu Sultan

Head Advisory Unit, WTO CellHead Advisory Unit, WTO Cell

TDAPTDAP

Regulatory Framework Regulatory Framework in Pakistan and NTCin Pakistan and NTC

Regulatory Framework in Regulatory Framework in PakistanPakistan

Ministry of Commerce is responsible Ministry of Commerce is responsible for negotiating and representing for negotiating and representing Pakistan at multilateral negotiations.Pakistan at multilateral negotiations.

MOC takes its position after MOC takes its position after consultation with all ministries, consultation with all ministries, divisions, associations and chambers.divisions, associations and chambers.

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

Functions of the Commission

The Commission is the implementing body for two WTO

agreements, namely, Agreement on Subsidies & CVDs, and

Agreement on Safeguards.

Pakistan’s Trade Defence Laws:

Anti-Dumping Duties Ordinance, 2000

Countervailing Duties Ordinance, 2001

Safeguards Measures Ordinance, 2002


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

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

ProcedureProcedureApplication 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

TRANSPARENCYTRANSPARENCY

Commission maintains a Public File in each investigation, which Commission maintains a Public File in each investigation, which contains all documents (non-confidential) including application, contains all documents (non-confidential) including application, notices, reports, comments and correspondence with interested parties notices, 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 interested The public file is open for inspection and copying to all interested parties.parties.

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

TRANSPARENCYTRANSPARENCY

Throughout the investigation, the Commission keeps all interested Throughout the investigation, the Commission keeps all interested parties including the governments of exporting countries informed of the parties including the governments of exporting countries informed of the developments in an investigation. developments in an investigation.

In addition, the following documents are available on the Commission’s In addition, the following documents are available on the Commission’s website and are, therefore, in the public domain:website and are, therefore, in the public domain:

Notice of InitiationNotice of Initiation

Notice of Preliminary DeterminationNotice of Preliminary Determination

Report on Preliminary Determination Report on Preliminary Determination

Notice of Final DeterminationNotice of Final Determination

Report on Final DeterminationReport on Final Determination

Commission’s website: www.ntc.gov.pkCommission’s website: www.ntc.gov.pk

Implementation of Trade Defense Laws

Anti-Dumping Actions Taken by Pakistan

Product Exporters fromInitiation

Date

Preliminary

Determination

Final Determination

Anti-Dumping Duties

Polyester Staple Fibre

ThailandKorea, Indonesia

09.08.20060% to 8.33%

09.02.2007 0% to 10.26%

07.06.2007

Tiles China 27.03.20060% to 21.02%

30.11.200614.85% to 23.65%

30-03-2007

TinplateUK, USA, Italy, Germany and France

06.12.2005 Terminated

03.06.2006

Formic AcidFinland and Germany

08.09.200516.49% and 6.16%

09.03.200613.63% and 6.25 %

07-07-2006

Pthalic Anhydride India 11.08.200510.94%

13.02.200610.94%

26-05-2006

*Polyester Filament

Yarn

Indonesia, Korea,

Malaysia, and

Thailand

12.05.20050% to 36.56%

12.11.20050% 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

Implementation of Trade Defense LawsAnti-Dumping Actions Taken by Pakistan


Date

Preliminary

DeterminationFinal Determination

UFMC China 12-01-20054.31% to 14.89%

18-07-20053.43% to 11.58%

19-11-2005

PVC ResinIran

Korea25-6-2004

31.06%

40.18%

26-10-2004

31.06%

40.18%

24-02-2005

Acrylic Tow Uzbekistan 16-3-200412.71%

13-08-2004

12.71%

10-12-2004

Glacial Acetic Acid Taiwan 1-9-200313.77%

25-2-2004

13.77%

18-6-2004

Sorbitol 70%

Solution

France

Indonesia6-3-2003

96.50% & 91.12%

19-7-2003

96.50% & 22.26%

19-11-2003

Tinplate South Africa 26-2-200223.91%

22-7-2002

27.33%

26-11-2002

Implementation of Trade Defense LawsReviews of Anti-dumping Measures


DateStatus

Sorbitol 70% Solution Indonesia

25-07-2007

(Changed

Circumstances)

Terminated on

02-02-2008

Tinplate South Africa07-07-2007

(Sunset)Under Process

Tiles ChinaRequest Received

(Newcomer) Under Process

Implementation of Trade Defense LawsImplementation of Trade Defense LawsAPPEAL AGAINST THE COMMISSION’S DECISIONAPPEAL AGAINST THE COMMISSION’S DECISION

Appellate Tribunal (Pakistan)Appellate Tribunal (Pakistan)Any interested party can file an appeal against a Any interested party can file an appeal against a final determination made by the Commission final determination made by the Commission

Dispute Settlement Body (Geneva)Dispute Settlement Body (Geneva)The government of exporting country may The government of exporting country may approach the DSB to challenge the inconsistencies approach the DSB to challenge the inconsistencies of a measure with the WTO Agreements of a measure with the WTO Agreements


Countervailing Duties Ordinance, 2001Countervailing Duties Ordinance, 2001

MandateMandateImposition of countervailing measures after due process Imposition of countervailing measures after due process

ProcedureProcedure

Application processing, preliminary investigation, preliminary Application processing, preliminary investigation, preliminary determination final investigation, final determination, imposition of determination 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.

Implementation of Trade Defense Laws

Safeguard Measures Ordinance, 2002Safeguard Measures Ordinance, 2002

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

ProcedureProcedureApplication processing, investigation, determination and making Application processing, investigation, determination and making recommendations to the Government.recommendations to the Government.

RecommendationsRecommendationsNTC 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.

Implementation of Trade Defense LawsSafeguard Investigation by Pakistan

Product Date of Initiation Determination

Footwear 17-06-2005Investigation

Terminated

Assisting Exporters Facing Trade Defense ActionsAssisting Exporters Facing Trade Defense Actions

Assisting Pakistani exporters facing foreign Assisting Pakistani exporters facing foreign actions under WTO Trade Defense actions 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.

Assisting Exporters Facing Trade Defense Assisting Exporters Facing Trade Defense ActionsActions

The Commission has been assisting the exporters from Pakistan The Commission has been assisting the exporters from Pakistan facing 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 details Accounting details

• Procedural compliance Procedural compliance

• DSB proceedingsDSB proceedings

REGIONALISMREGIONALISM

ByBy

Aamir Hussain SiddiquiAamir Hussain Siddiqui

Economist, Research & Information Unit, Economist, Research & Information Unit, WTO Cell, TDAPWTO Cell, TDAP

WTO Provisions for WTO Provisions for RegionalismRegionalism

Article XXIV of GATT 1994: Article XXIV of GATT 1994: Para 4 of the Doha Declaration: We Para 4 of the Doha Declaration: We

stress our commitment to the WTO as stress our commitment to the WTO as the unique forum for global trade rule-the unique forum for global trade rule-making and liberalization, while also making and liberalization, while also recognizing that regional trade recognizing that regional trade agreements can play an important role agreements can play an important role in promoting the liberalization and in promoting the liberalization and expansion of trade and in fostering expansion of trade and in fostering development. development.

Global tendency of RTAsGlobal tendency of RTAs

Some 380 RTAs have been notified Some 380 RTAs have been notified to the GATT/WTO up to July 2007. to the GATT/WTO up to July 2007. Of these, 300 RTAs were notified Of these, 300 RTAs were notified under Article XXIV of the GATT under Article XXIV of the GATT 1947 or GATT 1994; 22 under the 1947 or GATT 1994; 22 under the Enabling Clause; and 58 under Enabling Clause; and 58 under Article V of the GATS. At that same Article V of the GATS. At that same date, 205 agreements were in date, 205 agreements were in force.force.

If we take into account RTAs which are If 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, those those signed but not yet in force, those currently being negotiated, and those in currently being negotiated, and those in the proposal stage, we arrive at a figure the proposal stage, we arrive at a figure of close to 400 RTAs which are of close to 400 RTAs which are scheduled to be implemented by 2010. scheduled to be implemented by 2010.

Of these RTAs, free trade agreements Of these RTAs, free trade agreements (FTAs) and partial scope agreements (FTAs) and partial scope agreements account for over 90%, while customs account for over 90%, while customs unions account for less than 10 %.unions account for less than 10 %.

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 Custom

UnionUnion

MERCOSUR (MERCOSUR (South American Common MarketSouth American Common Market) – ) – Custom UnionCustom Union

Pakistan’s positionPakistan’s position

Pakistan has signed following Trade Pakistan 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

South Asian Association for Regional South Asian Association for Regional CooperationCooperation

The South Asian Association for Regional The South Asian Association for Regional Cooperation (SAARC) was established when its Cooperation (SAARC) was established when its Charter was formally adopted on December 8, Charter was formally adopted on December 8, 1985 by the Heads of State or Government of 1985 by the Heads of State or Government of Bangladesh, Bhutan, India, Maldives, Nepal, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Pakistan and Sri Lanka.

SAARC provides a platform for the peoples of SAARC provides a platform for the peoples of South Asia to work together in a spirit of South Asia to work together in a spirit of friendship, trust and understanding. It aims to friendship, trust and understanding. It aims to accelerate the process of economic and social accelerate the process of economic and social development in Member States.development in Member States.

SAFTA is an economic agreement for free trade SAFTA is an economic agreement for free trade among member states. among member states.

Article-7 of the Agreement contains modalities of tariff reduction under 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% for LDCs (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% within two years Tariff below 20% to be reduced on margin of preference basis of 10% per year. Phase-II (2008-2013) Tariff to be reduced to 0-5% within 5 years.Tariff Reduction by LDCs for all SAARC Members Reduction in two phases: Phase-I (2006-2008) Existing tariff rates above 30% to be reduced to 30% within two years Tariff below 30% to be reduced on margin of preference basis of 5% per year. Phase-II (2008-2016) Tariff to be reduced to 0-5% within 8 years.

South Asian Free Trade Area South Asian Free Trade Area (SAFTA)(SAFTA)

Sensitive ListSensitive List

Countries No. of tariff lines % of total lines

Bangladesh 1254 24

Bhutan 157 3

India 884 16.9

Maldives 671 12.8

Nepal 1310 25.5

Pakistan 1183 22.6

Sri Lanka 1065 20.3

SAFTA Rules of OriginSAFTA Rules of OriginAnnex IV deals with the rules of origin Annex IV deals with the rules of origin under the SAFTA required to qualify under the SAFTA required to qualify products for preferential duty benefits. products for preferential duty benefits. Rules of Origin – to be operative on Rules 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 tariff 40% value addition + change in tariff heading at 4 digits (CTH).heading at 4 digits (CTH).

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

Pak-Sri Lanka Free Trade AgreementPak-Sri Lanka Free Trade Agreement

Salient Features Salient Features • • Came into force from June 2005.Came into force from June 2005.

• • Establishment of a Free Trade Area through Establishment of a Free Trade Area through complete or phased elimination of tariffs. complete or phased elimination of tariffs. • • The FTA does not remove all tariffs on all goods The FTA does not remove all tariffs on all goods at once. at once. • • Negative Lists to protect national interests of Negative Lists to protect national interests of both countries. both countries. • • The Rules of Origin (ROO) criteria to ensure a The Rules of Origin (ROO) criteria to ensure a minimum local content. minimum local content. • • Adequate safety clauses to protect domestic and Adequate safety clauses to protect domestic and national interests of both countries. national interests of both countries. • • Review and consultation mechanisms to ensure Review and consultation mechanisms to ensure the smooth operation of the Agreement. the smooth operation of the Agreement.

Pakistan Commitments Pakistan 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 immediate tariff concessions on 206 items. In addition Sri Lanka can export up to 10,000 MT of tea per financial year free of can export up to 10,000 MT of tea per financial year free of duty.duty.

Pakistan has also granted 35% of margin of preference on Pakistan has also granted 35% of margin of preference on applied (MFN1) tariff rate to exports of beetle leaves from Sri applied (MFN1) tariff rate to exports of beetle leaves from Sri Lanka. Apparel exports from Sri Lanka (21 categories) are also Lanka. Apparel exports from Sri Lanka (21 categories) are also granted 35% margin of preference on applied (MFN) tariff rate granted 35% margin of preference on applied (MFN) tariff rate up to 3 million pieces. Ceramic exports from Sri Lanka to up to 3 million pieces. Ceramic exports from Sri Lanka to Pakistan are given a margin of preference of 20% on applied Pakistan are given a margin of preference of 20% on applied (MFN) tariff rate.(MFN) tariff rate.

There is no limit on the quantity of exports. About 10% of tariff There is no limit on the quantity of exports. About 10% of tariff lines at 6-digit level (i.e. 540 items) are included in the negative lines at 6-digit level (i.e. 540 items) are included in the negative list of Pakistan. These consist of very sensitive items where list of Pakistan. These consist of very sensitive items where Pakistan is not in a position to offer any preferential treatment Pakistan is not in a position to offer any preferential treatment to Sri Lanka.to Sri Lanka.

All other items that are not included in the negative list and All other items that are not included in the negative list and immediate concession list are subject to a tariff phase out and immediate concession list are subject to a tariff phase out and would have duty free access to Pakistan by 2008.would have duty free access to Pakistan by 2008.

Sri Lanka CommitmentsSri Lanka Commitments From the date of entry into force Sri Lanka has granted From the date of entry into force Sri Lanka has granted

immediate duty free access to Pakistan for 102 immediate duty free access to Pakistan for 102 products. In addition, Sri Lanka has allowed Pakistan to products. In addition, Sri Lanka has allowed Pakistan to export Long Grained Pakistan Rice (Basmathi) up to export Long Grained Pakistan Rice (Basmathi) up to 6000 MT per year and potatoes up to 1000 MT during 6000 MT per year and potatoes up to 1000 MT during the off season (i.e. June-July & Oct-Nov) free of duty.the off season (i.e. June-July & Oct-Nov) free of duty.

The negative list of Sri Lanka has about 13% of tariff The negative list of Sri Lanka has about 13% of tariff lines at 6-digit level (697 items) where the country lines at 6-digit level (697 items) where the country would not give any preferential concessions to Pakistan.would not give any preferential concessions to Pakistan.

All other items, which are not included in the immediate All other items, which are not included in the immediate 100% concession list and the negative list, are subject 100% concession list and the negative list, are subject to a duty phase out and would be made duty free by to a duty phase out and would be made duty free by 2010.2010.

Pak-China FTAPak-China FTA

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

Pak- China FTA comprises two phases, providing Pak- China FTA comprises two phases, providing elimination and reduction of tariffs within the time elimination and reduction of tariffs within the time frame as provided under the agreement. frame as provided under the agreement. The base The base year for tariff reduction/elimination is 2006 for China year for tariff reduction/elimination is 2006 for China while the base year for tariff reduction/ elimination is while the base year for tariff reduction/ elimination is the fiscal year of 2006-2007 for Pakistan. It is worth the fiscal year of 2006-2007 for Pakistan. It is worth mentioning here that the mentioning here that the elimination of tariff on the elimination of tariff on the products covered in the Early Harvest Program (EHP) products covered in the Early Harvest Program (EHP) shall continue in accordance with the earlier agreed shall continue in accordance with the earlier agreed modality of tariff elimination for EHP.modality of tariff elimination for EHP.

Tariff Reduction Modality of China Tariff 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 Preference of 50%( five years )

604 8%

IV Reduction on Margin of Preference from 20%( five years)

529 7%

V No Concession 1132 15%

Total 7550

Tariff Reduction Modality of Pakistan Tariff Reduction Modality of Pakistan (Phase-I)(Phase-I)

Category No.

Track No. of Tariff Lines

% of Tariff lines at 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 of 50%( five years )

157 2.0

IV Reduction on Margin of Preference from 20%( five years)

1768 26.1

V No Concession 1025 15.0

VI Exclusion 92 1.4

TOTAL 9803

Phase II: Both Parties shall endeavor to eliminate the tariffs of no less than 90% of products, both in terms of tariff lines and trade volume within a reasonable period of time on the basis of friendly consultation and accommodation of the concerns of both Parties.

Malaysia-Pakistan Closer Economic Malaysia-Pakistan Closer Economic Partnership Agreement (MPCEPA)Partnership Agreement (MPCEPA)

This Agreement is the 1st bilateral FTA between two Muslim Countries - This Agreement is the 1st bilateral FTA between two Muslim Countries - members of OIC. This Agreement is Pakistan’s first comprehensive FTA members of OIC. This Agreement is Pakistan’s first comprehensive FTA incorporating trade in goods, trade in services, investment and Economic incorporating trade in goods, trade in services, investment and Economic Co-operation and Malaysia’s first bilateral FTA with any south Asian country. Co-operation and Malaysia’s first bilateral FTA with any south Asian country.

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

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

The Agreement also contains a chapter on investment to facilitate The Agreement also contains a chapter on investment to facilitate entrepreneurs of both countries. The incentives available to both countries entrepreneurs of both countries. The incentives available to both countries will not be available to investors from other countries and the bilateral will not be available to investors from other countries and the bilateral investment treaty signed by Pakistan will have no impact on the investment investment treaty signed by Pakistan will have no impact on the investment provisions under the FTA. provisions under the FTA.

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

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 is given

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% in 2010.

179 items are in Exclusion List

Pak – Iran PTAPak – Iran PTA

Pakistan signed Preferential Trade Pakistan signed Preferential Trade Agreement with Islamic Republic of Iran Agreement with Islamic Republic of Iran on 4th March 2004. The Cabinet ratified on 4th March 2004. The Cabinet ratified the agreement on 25th May 2005. As the agreement on 25th May 2005. As mutually agreed the agreement has mutually agreed the agreement has become operational from 1st September become operational from 1st September 2006. 2006.

Preferences granted by both countries to Preferences granted by both countries to each other cover approximately 18% of each other cover approximately 18% of MFN tariff of both countries. MFN tariff of both countries.

Preferences given by Iran to Preferences given by Iran to PakistanPakistan

Total 309 ItemsTotal 309 ItemsMain items are Textile and Clothing (125 Main items are Textile and Clothing (125

items), Chemicals, Marble & Granite, Fish, items), Chemicals, Marble & Granite, Fish, Bananas, Mangoes and Citrus fruits, Bananas, Mangoes and Citrus fruits, Pharmaceutical, Plastics, Rubber & Articles, Pharmaceutical, Plastics, Rubber & Articles, Footwear, Cutleries, Refrigerators, Electric Footwear, Cutleries, Refrigerators, Electric Motors, Brushes, Pens, Pencils & Markers, Motors, Brushes, Pens, Pencils & Markers, etc.etc.

Margin of Preference is between 10 to 30 Margin of Preference is between 10 to 30 percent, except Rice, which is given TRQ percent, except Rice, which is given TRQ status, but Commercial benefit is about status, but Commercial benefit is about 96%. 96%.

Preference given by Pakistan to Preference given by Pakistan to IranIran

Total 475 itemsTotal 475 items

Major items, are animal products, vegetables, fruits, Major items, are animal products, vegetables, fruits, tea & spices, oilseeds, animal of vegetable oils, tea & spices, oilseeds, animal of vegetable oils, confectionary, salts and minerals, fuels Petroleum confectionary, salts and minerals, fuels Petroleum and 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 and Glassware, Pig iron and Ferrous alloy, Copper and Industrial 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 given Organic and Inorganic, Ores and other are given highest MOP of 30%highest MOP of 30%

Pak – Mauritius PTAPak – Mauritius PTA

Pakistan signed Preferential Trade Pakistan signed Preferential Trade Agreement with Republic of Mauritius Agreement with Republic of Mauritius on 30th July 2007. As mutually on 30th July 2007. As mutually agreed the agreement has become agreed the agreement has become operational from 1st December 2007.operational from 1st December 2007.

Preference granted by MauritiusPreference granted by Mauritius


Major items are Vegetables and Major 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 become Margin of Preference would become 100% one year. 100% one year.

Preference granted by PakistanPreference granted by Pakistan


All are related to Garments (Chapter All are related to Garments (Chapter 61: Knitted garments and Chapter 61: Knitted garments and Chapter 62: Woven Garments)62: Woven Garments)

Margin of Preference is between 30 to Margin of Preference is between 30 to 50%50%

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

ECO Trade AgreementECO Trade Agreement

Economic Cooperation Organization (ECO), is an Economic Cooperation Organization (ECO), is an intergovernmental regional organization established in intergovernmental regional organization established in 1985 by Iran, Pakistan and Turkey for the purpose of 1985 by Iran, Pakistan and Turkey for the purpose of promoting economic, technical and cultural cooperation promoting economic, technical and cultural cooperation among the Member States. In 1992, the Organization was among the Member States. In 1992, the Organization was expanded 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 Iran The Organization has a permanent Secretariat in Tehran Iran headed by a Secretary General. Mr. Khursheed Anwar, from headed by a Secretary General. Mr. Khursheed Anwar, from Pakistan is the current Secretary General of ECO Pakistan is the current Secretary General of ECO Secretariat.Secretariat.

ECO Trade Agreement was approved in 2005 in Turkey and ECO Trade Agreement was approved in 2005 in Turkey and need ratification by member governments after which it will need ratification by member governments after which it will become operational.become operational.

Dispute Settlement Dispute Settlement Mechanism (DSM) of the Mechanism (DSM) of the

WTOWTO

ByBy

Abdul Aleem khanAbdul Aleem khan

Economist, Advisory Unit, Economist, Advisory Unit,

WTO Cell, TDAPWTO Cell, TDAP

Introduction to the DSUIntroduction to the DSU

What is WTO’s DSS & DSUWhat is WTO’s DSS & DSU

Need for a DSU Need 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 WTO’s DSUWhat is WTO’s DSU

WTO’s DSU is the Central Pillar of MTSWTO’s 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

Need for a DSUNeed for a DSU

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

CommitmentsCommitments Settles disputes in a timely & Settles disputes in a timely &

structured mannerstructured manner Mitigates the imbalances between Mitigates the imbalances between

stronger and weaker players stronger and weaker players Members Trust it!Members Trust it!

Improvements over GATT 1947 Improvements over GATT 1947 - 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 of Following 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?

Settling disputes is the responsibility Settling disputes is the responsibility of DSB.of DSB.

Consultation (1st stage – up to 60 Consultation (1st stage – up to 60 days)days)

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

How the Panel works?How the Panel works?

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

Either side can appeal a panel’s ruling. Either side can appeal a panel’s ruling. (Sometimes both sides do so)(Sometimes both sides do so)

Each appeal is heard by 3 members of Each appeal is heard by 3 members of a permanent 7-member Appellate Bodya permanent 7-member Appellate Body

The appeal can uphold, modify or The appeal can uphold, modify or reverse the panel’s legal findings and reverse the panel’s legal findings and conclusions.conclusions.

DSB has to accept or reject the appeals DSB has to accept or reject the appeals report within 30 daysreport within 30 days

The case has been decided The case has been decided 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

Pakistan’s ExperiencePakistan’s Experience

As complainant as respondent as third party

3 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 – Turkey

9 DS367 – Australia

Major CasesMajor CasesDispute Number Description Request for

Consultations

PAKISTAN AS COMPLAINANT

DS58 United States — Import Prohibition of Certain Shrimp and Shrimp Products (Complainants: India; Malaysia; Pakistan; Thailand)

8 October 1996

DS192 United States — Transitional Safeguard Measure on Combed Cotton Yarn from Pakistan (Complainant: Pakistan)

3 April 2000

DS327 Egypt — Anti-Dumping Duties on Matches from Pakistan (Complainant: Pakistan) 21 February 2005

PAKISTAN AS RESPONDENT

DS36 Pakistan — Patent Protection for Pharmaceutical and Agricultural Chemical Products (Complainant: United States)

30 April 1996

PAKISTAN AS THIRD PARTY

DS243 United States — Rules of Origin for Textiles and Apparel Products (Complainant: India) 11 January 2002

DS246 European Communities — Conditions for the Granting of Tariff Preferences to Developing Countries (Complainant: India)

5 March 2002

DS267 United States — Subsidies on Upland Cotton (Complainant: Brazil) 27 September 2002

OTHER CASES DS316 European Communities — Measures Affecting Trade in Large Civil Aircraft (Complainant: United

States)6 October 2004

DS317 United States — Measures Affecting Trade in Large Civil Aircraft (Complainant: European Communities)

6 October 2004

DS347 European Communities — Measures Affecting Trade in Large Civil Aircraft (Second Complaint) (Complainant: United States)

31 January 2006

DS353 United States — Measures Affecting Trade in Large Civil Aircraft — Second Complaint (Complainant: European Communities)

27 June 2005

DS 58: Import Prohibition of Certain DS 58: Import Prohibition of Certain 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; European Australia; Colombia; Costa Rica; European

Communities; Ecuador; El Salvador; Guatemala; Hong Communities; Ecuador; El Salvador; Guatemala; Hong Kong, China; Japan; Mexico; Nigeria; Pakistan; Kong, China; Japan; Mexico; Nigeria; Pakistan; Philippines; Senegal; Singapore; Sri Lanka; Venezuela Philippines; Senegal; Singapore; Sri Lanka; Venezuela

8 October 1996: Complainants requested for 8 October 1996: Complainants requested for consultation concerning a ban on Importation of Shrimp consultation concerning a ban on Importation of Shrimp & Shrimp Products from the complainants, imposed by & Shrimp Products from the complainants, imposed by US 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 well Violations 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.) 9 January 1997: Malaysia and Thailand requested the 9 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 30 January 1997: Pakistan also requested the establishment

of a panel.of a panel. 25 February 1997: DSB established a panel25 February 1997: DSB established a panel 25 February 1997: India also requested the establishment of 25 February 1997: India also requested the establishment of

a panel on the same matter.a 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 10 April 1997: Further to a second request to establish a

panel by India, the DSB agreed to establish a panel. It was panel by India, the DSB agreed to establish a panel. It was also agreed to incorporate this panel with that already also agreed to incorporate this panel with that already established in respect of the other complainants.established in respect of 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.) 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 The Panel found that the import ban in shrimp and shrimp

products as applied by the United States is inconsistent with products as applied by the United States is inconsistent with Article XI:1 of GATT 1994, and cannot be justified under Article Article XI:1 of GATT 1994, and cannot be justified under Article XX of GATT 1994.XX of GATT 1994.

13 July 1998: the US notified its intention to appeal certain issues 13 July 1998: the US notified its intention to appeal certain issues of law and legal interpretations developed by the Panel.of law and legal interpretations developed by the Panel.

12 October 1998: Appellate Body’s Report was circulated to 12 October 1998: Appellate Body’s Report was circulated to Members.Members.

The Appellate Body reversed the Panel’s finding that the US The Appellate Body reversed the Panel’s finding that the US measure at issue is not within the scope of measures permitted measure at issue is not within the scope of measures permitted under the chapeau of Article XX of GATT 1994, but concluded under the chapeau of Article XX of GATT 1994, but concluded that the US measure, while qualifying for provisional justification that the US measure, while qualifying for provisional justification under Article XX(g), fails to meet the requirements of the under Article XX(g), fails to meet the requirements of the chapeau of Article XX.chapeau of Article XX.

DS 58 (cont.)DS 58 (cont.) 6 November 1998: The DSB adopted the Appellate Body Report 6 November 1998: The DSB adopted the Appellate Body Report

and the Panel Report, as modified by the Appellate Body Report.and the Panel Report, as modified by the Appellate Body Report.

On 25 November 1998, the US informed the DSB that it was On 25 November 1998, the US informed the DSB that it was committed to implementing the recommendations of the DSB and committed to implementing the recommendations of the DSB and was looking forward to discussing with the complainants the was looking forward to discussing with the complainants the question of implementation. The parties to the dispute announced question of implementation. The parties to the dispute announced that they had agreed on an implementation period of 13 months that they had agreed on an implementation period of 13 months from the date of adoption of the Appellate Body and Panel from the date of adoption of the Appellate Body and Panel Reports, i.e. it expired on 6 December 1999. Reports, i.e. it expired on 6 December 1999.

On 22 December 1999, Malaysia and the United States informed On 22 December 1999, Malaysia and the United States informed the DSB that they had reached an understanding regarding the DSB that they had reached an understanding regarding possible proceedings under Articles 21 and 22 of the DSU.possible proceedings under Articles 21 and 22 of the DSU.

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

the DSB’s rulings and recommendations. the DSB’s rulings and recommendations. 12 October 2000: Malaysia requested that the matter 12 October 2000: Malaysia requested that the matter

be referred to the original panel pursuant to Article be referred to the original panel pursuant to Article 21.5 of the DSU, considering that by not lifting the 21.5 of the DSU, considering that by not lifting the import prohibition and not taking the necessary import prohibition and not taking the necessary measures to allow the importation of certain shrimp measures to allow the importation of certain shrimp and shrimp products in an unrestrictive manner, the and shrimp products in an unrestrictive manner, the US had failed to comply with the recommendations US had failed to comply with the recommendations and rulings of the DSB. and rulings of the DSB.

23 October 2000: DSB referred the matter to the 23 October 2000: DSB referred the matter to the original panel pursuant to Article 21.5 DSU.original panel pursuant to Article 21.5 DSU.

15 June 2001: The Panel circulated its report.15 June 2001: The Panel circulated its report.

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

The Panel concluded that:The Panel concluded that: the measure adopted by the US in order to comply with the the measure adopted by the US in order to comply with the

recommendations and rulings of the DSB violated Article XI.1 of the recommendations and rulings of the DSB violated Article XI.1 of the GATT 1994;GATT 1994;

in light of the recommendations and rulings of the DSB, Section 609 in light of the recommendations and rulings of the DSB, Section 609 of Public Law 101-162, as implemented by the Revised Guidelines of 8 of Public Law 101-162, as implemented by the Revised Guidelines of 8 July 1999 and as applied so far by the US authorities, was justified July 1999 and as applied so far by the US authorities, was justified under Article XX of the GATT 1994 as long as the conditions stated in under Article XX of the GATT 1994 as long as the conditions stated in the findings of this Report, in particular the ongoing serious good faith the findings of this Report, in particular the ongoing serious good faith efforts to reach a multilateral agreement, remain satisfied.efforts to reach a multilateral agreement, remain satisfied.

should any one of the conditions referred above cease to be met in should any one of the conditions referred above cease to be met in the future, the recommendations of the DSB may no longer be the future, the recommendations of the DSB may no longer be complied with. In such a case, any complaining party in the original complied with. In such a case, any complaining party in the original case may be entitled to have further recourse to Article 21.5 of the case may be entitled to have further recourse to Article 21.5 of the DSU.DSU.

DS 58 (cont.)DS 58 (cont.) 23 July 2001: Malaysia notified the DSB its intention to appeal 23 July 2001: Malaysia notified the DSB its intention to appeal

the above report. Malaysia, in particular, sought review by the the above report. Malaysia, in particular, sought review by the Appellate Body of the Panel’s finding mentioned in point 2 in Appellate Body of the Panel’s finding mentioned in point 2 in previous slide.previous slide.

19 September 2001: the Appellate Body informed the DSB of a 19 September 2001: the Appellate Body informed the DSB of a delay in the circulation of its Report in this appeal.delay in the circulation of its Report in this appeal.

22 October 2001: Report was circulated to the Members.22 October 2001: Report was circulated to the Members. The Appellate Body upheld the contested findings of the The Appellate Body upheld the contested findings of the

Panel: Since it had upheld the Panel’s findings that the US Panel: Since it had upheld the Panel’s findings that the US measure was now applied in a manner that met the measure was now applied in a manner that met the requirements of Article XX of the GATT 1994, the Appellate requirements of Article XX of the GATT 1994, the Appellate Body refrained from making any recommendations.Body refrained from making any recommendations.

21 November 2001: DSB adopted the Appellate Body Report 21 November 2001: DSB adopted the Appellate Body Report and the Panel Report, as upheld by the Appellate Body Report.and the Panel Report, as upheld by the Appellate Body Report.

DS 192: DS 192: Transitional Safeguard Transitional Safeguard Measure on Combed Cotton Yarn from Measure on Combed Cotton Yarn from

PakistanPakistan Complainant: PakistanComplainant: Pakistan Respondent: USARespondent: USA 3 April 2000: Pakistan requested consultations with the US in 3 April 2000: Pakistan requested consultations with the US in

respect of a transitional safeguard measure applied by the US, respect of a transitional safeguard measure applied by the US, as of 17 March 1999, on combed cotton yarn from Pakistan.as of 17 March 1999, on combed cotton yarn from Pakistan.

Pakistan claimed as follows:Pakistan claimed as follows: the transitional safeguards applied by the United States are the transitional safeguards applied by the United States are

inconsistent with the United States’ obligations under Articles inconsistent with the United States’ obligations under Articles 2.4 of the ATC and not justified by Article 6 of the ATC;2.4 of the ATC and not justified by Article 6 of the ATC;

the US restraint does not meet the requirements for the US restraint does not meet the requirements for transitional safeguards set out in paragraphs 2, 3, 4 and 7 of transitional safeguards set out in paragraphs 2, 3, 4 and 7 of Article 6 of the ATC.Article 6 of the ATC.


3 April 2000, Pakistan requested the establishment of a panel.3 April 2000, Pakistan requested the establishment of a panel. 18 May 2000, the DSB deferred the establishment of a panel.18 May 2000, the DSB deferred the establishment of a panel. Further to a second request to establish a panel by Pakistan, Further to a second request to establish a panel by Pakistan,

the DSB established a panel at its meeting on 19 June 2000the DSB established a panel at its meeting on 19 June 2000 On 30 August 2000, the Panel was composed.On 30 August 2000, the Panel was composed. The panel circulated its report on 31 May 2001.The panel circulated its report on 31 May 2001. The Panel concluded that the transitional safeguard measure The Panel concluded that the transitional safeguard measure

(quantitative restriction) imposed by the US on imports of (quantitative restriction) imposed by the US on imports of combed cotton yarn from Pakistan as of 17 March 1999, and combed cotton yarn from Pakistan as of 17 March 1999, and extended as of 17 March 2000 for a further year is inconsistent extended as of 17 March 2000 for a further year is inconsistent with the provisions of Article 6 of the ATC.with the provisions of Article 6 of the ATC.

With respect to the other claims, the Panel found that Pakistan With respect to the other claims, the Panel found that Pakistan did not establish that the measure at issue was inconsistent did not establish that the measure at issue was inconsistent with the US obligations under Article 6 of the ATC.with the US obligations under Article 6 of the ATC.

DS 192 (cont.)DS 192 (cont.) The Panel recommended that the DSB request that the US bring The Panel recommended that the DSB request that the US bring

the measure at issue into conformity with its obligations under the measure at issue into conformity with its obligations under the ATC, and suggested that this can best be achieved by the ATC, and suggested that this can best be achieved by prompt removal of the import restriction.prompt removal of the import restriction.

On 9 July 2001, the US notified its decision to appeal to the On 9 July 2001, the US notified its decision to appeal to the Appellate Body certain issues of law covered in the Panel Report Appellate Body certain issues of law covered in the Panel Report and certain legal interpretations developed by the Panel.and certain legal interpretations developed by the Panel.

On 5 September 2001, the Appellate Body informed the DSB On 5 September 2001, the Appellate Body informed the DSB that it would not be able to circulate its report within the 7 that it would not be able to circulate its report within the 7 September deadline.September deadline.

The Report was circulated to Members on 8 October 2001.The Report was circulated to Members on 8 October 2001. The Appellate Body upheld the Panel’s overall conclusion that The Appellate Body upheld the Panel’s overall conclusion that

the transitional safeguard measure taken by the United States the transitional safeguard measure taken by the United States with respect to imports of combed cotton yarn from Pakistan with respect to imports of combed cotton yarn from Pakistan was inconsistent with the ATC. was inconsistent with the ATC.

DS 192 (cont.)DS 192 (cont.) The DSB adopted the Appellate Body Report and the Panel The DSB adopted the Appellate Body Report and the Panel

Report, as modified by the Appellate Body Report, on 5 Report, as modified by the Appellate Body Report, on 5 November 2001.November 2001.

21 November 2001: the US stated that it had implemented 21 November 2001: the US stated that it had implemented the DSB’s recommendations and rulings. Specifically, on 8 the DSB’s recommendations and rulings. Specifically, on 8 November 2001, the Committee for the Implementation of November 2001, the Committee for the Implementation of Textile Agreements, chaired by the Department of Textile Agreements, chaired by the Department of Commerce, had directed the US Customs Service to Commerce, had directed the US Customs Service to eliminate the limit on imports of combed cotton yarn from eliminate the limit on imports of combed cotton yarn from Pakistan. This action was effective from 9 November 2001.Pakistan. This action was effective from 9 November 2001.

Ds 327: Anti-Dumping Duties on Ds 327: Anti-Dumping Duties on Matches from PakistanMatches from Pakistan

Complainant: PakistanComplainant: Pakistan Respondent: EgyptRespondent: Egypt On 21 February 2005, Pakistan requested consultations with Egypt On 21 February 2005, Pakistan requested consultations with Egypt

regarding definitive anti-dumping duties imposed by Egypt on regarding definitive anti-dumping duties imposed by Egypt on matchboxes from Pakistan. According to Pakistan, these measures matchboxes from Pakistan. According to Pakistan, these measures appear to be inconsistent with Egypt’s obligations under the appear to be inconsistent with Egypt’s obligations under the GATT GATT 19941994 and the and the Anti-Dumping AgreementAnti-Dumping Agreement..

On 9 June 2005, Pakistan requested the establishment of a panel. On 9 June 2005, Pakistan requested the establishment of a panel. At its meeting on 20 June 2005, the DSB deferred the At its meeting on 20 June 2005, the DSB deferred the establishment of a panel. At its meeting on 20 July 2005, the DSB establishment of a panel. At its meeting on 20 July 2005, the DSB established a panel.established a panel.

On 27 March 2006, Pakistan and Egypt informed the DSB that they On 27 March 2006, Pakistan and Egypt informed the DSB that they had reached a mutually agreed solution under Article 3.6 of the had reached a mutually agreed solution under Article 3.6 of the DSU in the form of price undertaking agreements between the DSU in the form of price undertaking agreements between the concerned Pakistani exporters and the Egyptian Investigating concerned Pakistani exporters and the Egyptian Investigating Authority.Authority.

DS 36: Patent Protection for DS 36: Patent Protection for Pharmaceutical and Agricultural Pharmaceutical and Agricultural

Chemical ProductsChemical Products Complainant: USAComplainant: USA Respondent: PakistanRespondent: Pakistan In its request for consultations dated 30 April 1996, the In its request for consultations dated 30 April 1996, the

United States claimed that the absence in Pakistan of (i) United States claimed that the absence in Pakistan of (i) either patent protection for pharmaceutical and agricultural either patent protection for pharmaceutical and agricultural chemical products or a system to permit the filing of chemical products or a system to permit the filing of applications for patents on these products and (ii) a system applications for patents on these products and (ii) a system to grant exclusive marketing rights in such products, to grant exclusive marketing rights in such products, violates TRIPS Agreement Articles 27, 65 and 70.violates TRIPS Agreement Articles 27, 65 and 70.

On 4 July 1996, the United States requested the On 4 July 1996, the United States requested the establishment of a panel. establishment of a panel.

The DSB considered the request at its meeting on 16 July The DSB considered the request at its meeting on 16 July 1996, but did not establish a panel due to Pakistan’s 1996, but did not establish a panel due to Pakistan’s objection.objection.


At the DSB meeting on 25 February 1997, At the DSB meeting on 25 February 1997, both parties informed the DSB that they both parties informed the DSB that they had reached a mutually agreed solution to had reached a mutually agreed solution to the dispute and that the terms of the the dispute and that the terms of the agreement were being drawn up, and agreement were being drawn up, and would be communicated to the DSB once would be communicated to the DSB once finalized. finalized.

On 28 February 1997, the terms of the On 28 February 1997, the terms of the agreement were communicated to the agreement were communicated to the Secretariat.Secretariat.

DS 243: Rules of Origin for Textiles and DS 243: Rules of Origin for Textiles and Apparel ProductsApparel Products

Complainant: IndiaComplainant: India Respondent: USARespondent: USA Third Parties: Third Parties: Bangladesh; China; European Communities; Bangladesh; China; European Communities;

Pakistan; Philippines.Pakistan; Philippines. On 11 January 2002, India requested consultations with the On 11 January 2002, India requested consultations with the

United States in respect of its rules of origin applicable to United States in respect of its rules of origin applicable to imports of textiles and apparel products as set out in imports of textiles and apparel products as set out in Section 334 of the Uruguay Round Agreements Act, Section Section 334 of the Uruguay Round Agreements Act, Section 405 of the Trade and Development Act of 2000 and the 405 of the Trade and Development Act of 2000 and the customs regulations implementing these provisions.customs regulations implementing these provisions.

On 7 May 2002, India requested the establishment of a On 7 May 2002, India requested the establishment of a panel. panel.

On 22 May 2002, the DSB deferred the establishment of a On 22 May 2002, the DSB deferred the establishment of a panel.panel.

DS 243 (cont.)DS 243 (cont.) Further to a second request by India, the DSB established a Further to a second request by India, the DSB established a

panel on 24 June 2002. panel on 24 June 2002. EC, Pakistan and the Philippines reserved their third party EC, Pakistan and the Philippines reserved their third party

rights. On 3 July 2002, Bangladesh reserved its third party rights. On 3 July 2002, Bangladesh reserved its third party rights. On 4 July 2002, China reserved its third party rights. rights. On 4 July 2002, China reserved its third party rights.

On 10 October 2002, the Panel was composed. On 10 October 2002, the Panel was composed. On 9 April 2003, the Chairman of the Panel informed the On 9 April 2003, the Chairman of the Panel informed the

DSB that due to the complexity of the matter, the Panel DSB that due to the complexity of the matter, the Panel would not be able to complete its work in six months. The would not be able to complete its work in six months. The Panel expects to issue its final report to the parties in early Panel expects to issue its final report to the parties in early May 2003.May 2003.

On 20 June 2003, the Panel Report was circulated to On 20 June 2003, the Panel Report was circulated to Members.Members.


On 20 June 2003, the Panel Report was circulated to Members. On 20 June 2003, the Panel Report was circulated to Members. The Panel found that:The Panel found that:

India failed to establish that section 334 of the Uruguay Round India failed to establish that section 334 of the Uruguay Round Agreements Act is inconsistent with Articles 2(b) or 2(c) of the Agreements Act is inconsistent with Articles 2(b) or 2(c) of the RO AgreementRO Agreement; and; and

India failed to establish that section 405 of the Trade and India failed to establish that section 405 of the Trade and Development Act is inconsistent with Articles 2(b), 2(c) or 2(d) Development Act is inconsistent with Articles 2(b), 2(c) or 2(d) of the of the RO AgreementRO Agreement;;

India failed to establish that the customs regulations contained India failed to establish that the customs regulations contained in 19 C.F.R. § 102.21 are inconsistent with Articles 2(b), 2(c) or in 19 C.F.R. § 102.21 are inconsistent with Articles 2(b), 2(c) or 2(d) of the 2(d) of the RO AgreementRO Agreement; ;

At its meeting on 21 July 2003, the DSB adopted the Panel Report.At its meeting on 21 July 2003, the DSB adopted the Panel Report.

DS 246: Conditions for the Granting of DS 246: Conditions for the Granting of Tariff Preferences to Developing Tariff Preferences to Developing

CountriesCountries Complainant: IndiaComplainant: India Respondent: European CommunitiesRespondent: European Communities Third Parties: Third Parties: Bolivia; Brazil; Colombia; Costa Rica; Cuba; Ecuador; Bolivia; Brazil; Colombia; Costa Rica; Cuba; Ecuador;

El Salvador; Guatemala; Honduras; Mauritius; Nicaragua; Pakistan; El Salvador; Guatemala; Honduras; Mauritius; Nicaragua; Pakistan; Panama; Paraguay; Peru; Sri Lanka; Venezuela; United States.Panama; Paraguay; Peru; Sri Lanka; Venezuela; United States.

On 5 March 2002, India requested consultations with the EC On 5 March 2002, India requested consultations with the EC concerning the conditions under which the EC accords tariff concerning the conditions under which the EC accords tariff preferences to developing countries under its current scheme of preferences to developing countries under its current scheme of generalized tariff preferences (“GSP scheme”). India presented generalized tariff preferences (“GSP scheme”). India presented this request pursuant to Article 4 of the DSU, Article XXIII:1 of the this request pursuant to Article 4 of the DSU, Article XXIII:1 of the GATT 1994 and paragraph 4(b) of the so-called Enabling Clause.GATT 1994 and paragraph 4(b) of the so-called Enabling Clause.

On 6 December 2002, India requested the establishment of a On 6 December 2002, India requested the establishment of a panel. panel.

On 19 December 2002, the DSB deferred the establishment of a On 19 December 2002, the DSB deferred the establishment of a panel. panel.


At its meeting on 27 January 2003, the DSB established a Panel.At its meeting on 27 January 2003, the DSB established a Panel. On 24 February 2003, India requested the Director-General to On 24 February 2003, India requested the Director-General to

compose the Panel. compose the Panel. On 6 March 2003, the Director-General composed the Panel.On 6 March 2003, the Director-General composed the Panel. On 22 September 2003, the Chairman of the Panel informed the On 22 September 2003, the Chairman of the Panel informed the

DSB that it would not be possible to complete its work in six DSB that it would not be possible to complete its work in six months due to the complexity of the matter involved and that months due to the complexity of the matter involved and that the Panel expected to complete its work at the end of October the Panel expected to complete its work at the end of October 2003.2003.

On 1 December 2003, the Panel report was circulated to the On 1 December 2003, the Panel report was circulated to the Members.Members.

On 8 January 2004, the European Communities notified its On 8 January 2004, the European Communities notified its decision to appeal to the Appellate Body certain issues of law decision to appeal to the Appellate Body certain issues of law covered in the Panel Report.covered in the Panel Report.

DS 246 (cont.)DS 246 (cont.) On 5 March 2004, the Chairman of the Appellate Body On 5 March 2004, the Chairman of the Appellate Body

informed the DSB that it would not be possible for the informed the DSB that it would not be possible for the Appellate Body to complete its work within the 60-day Appellate Body to complete its work within the 60-day period due to the time required for completion and period due to the time required for completion and translation of its Report. The Appellate Body estimated that translation of its Report. The Appellate Body estimated that the Report would be circulated to Members no later than 7 the Report would be circulated to Members no later than 7 April 2004.April 2004.

On 7 April 2004, the Appellate Body Report was circulated On 7 April 2004, the Appellate Body Report was circulated to Members.to Members.

On 20 April 2004, the DSB adopted the Appellate Body On 20 April 2004, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate report and the Panel report, as modified by the Appellate Body report.Body report.

DS 267: United States — Subsidies on DS 267: United States — Subsidies on Upland CottonUpland Cotton

Complainant: BrazilComplainant: Brazil Respondent: USARespondent: USA Third Parties: Third Parties: Argentina; Australia; Benin; Canada; Chad; China; Argentina; Australia; Benin; Canada; Chad; China;

Chinese Taipei; European Communities; India; New Zealand; Chinese Taipei; European Communities; India; New Zealand; Pakistan; Paraguay; Venezuela; Japan; Thailand.Pakistan; Paraguay; Venezuela; Japan; Thailand.

27 September 2002: Request for Consultation made by Brazil, 27 September 2002: Request for Consultation made by Brazil, concerning concerning US agricultural "domestic support" measures, US agricultural "domestic support" measures, export credit guarantees and other measures alleged to be export credit guarantees and other measures alleged to be export and domestic content subsidies on Upland Cotton.export and domestic content subsidies on Upland Cotton.

Panel was established on 18 March 2003.Panel was established on 18 March 2003. Panel report was circulated on 8 September 2004.Panel report was circulated on 8 September 2004. Appellate body report was circulated on 3 March 2005Appellate body report was circulated on 3 March 2005 On 18 August 2006, Brazil requested the establishment of an On 18 August 2006, Brazil requested the establishment of an

Article 21.5 panel.Article 21.5 panel.


On 1 September 2006, the DSB deferred the establishment of On 1 September 2006, the DSB deferred the establishment of an Article 21.5 panel. Further to a second request, at its an Article 21.5 panel. Further to a second request, at its meeting on 28 September 2006, the DSB agreed, if possible, meeting on 28 September 2006, the DSB agreed, if possible, to refer the matter raised by Brazil to the original panel.to refer the matter raised by Brazil to the original panel.

On 18 and 20 October 2006, Brazil and the United States On 18 and 20 October 2006, Brazil and the United States respectively requested the Director-General to compose the respectively requested the Director-General to compose the Article 21.5 panel. On 25 October 2006, the Director-General Article 21.5 panel. On 25 October 2006, the Director-General composed the panel.composed the panel.

On 18 December 2007, the compliance panel report was On 18 December 2007, the compliance panel report was circulated to Members.circulated to Members.

On 12 February 2008, the US and on 25 February 2008, Brazil On 12 February 2008, the US and on 25 February 2008, Brazil notified their decision to appeal to the Appellate Body.notified their decision to appeal to the Appellate Body.

Compliance panel report is currently under appeal.Compliance panel report is currently under appeal.

DS 316: Measures Affecting Trade in DS 316: Measures Affecting Trade in Large Civil AircraftLarge Civil Aircraft

Thank YouThank You

Documents

International Trade and the WTO By WTO Cell Trade Development Authority of Pakistan 3 rd September 2008