The 3rd Trade Policy review of Pakistan 16-18th January 2008
Responding statement on behalf of Pakistan by Mr. Ashraf Hayat, Additional Secretary, Ministry of Commerce
Mr. Chairperson, discussant Ambassador Tan and distinguished delegates,
I regret that our Commerce Minister has returned to Pakistan due to urgent work and therefore could not be with us this morning. He has asked me to read this statement on his behalf.
We were touched by the words of support expressed by the delegations about the recent difficult domestic developments in Pakistan. In such an hour it is comforting to have the support of the international community. We have faith in the resilience of the people of Pakistan and look to next month‟s elections for the nation to continue again on the path of progress.
I would like to thank the delegations for their generous words of appreciation for the Pakistan mission to the WTO in Geneva and in particular for the contribution of Ambassador Manzoor Ahmad. The Pakistan government is honoured to receive such validation of its representation in Geneva. Pakistan will continue to work with the WTO members for a more favourable, rules based and liberal multilateral trading system.
We would, once again, like to thank our discussant and all the delegations for their constructive and encouraging comments. We are very pleased that our reforms and improvements in our economic and trade environment since our last review have been appreciated by the WTO members. While we have taken careful note of all the comments and advice received, upon which we intend to deliberate when we return to our capital, we would like to give our preliminary response to some of the common themes and clarify some issues.
Let me start with the comments of our discussant Ambassador Karen Tan. Like other WTO members, she has been in general, very appreciative of our economic performance and
liberalization that has been done during the period under review. She did however point out some areas which need urgent improvements. These include infrastructure, cost of doing business, education and training.
Pakistan realizes the gravity of these issues and has already placed a high priority on addressing them. For improving the infrastructure, a number of major projects have been either planned or initiated. The most significant is the “National Trade Corridor” which is aimed at revamping the whole transport sector, including ports, roads, railways and aviation. The new infrastructure projects combined with major trade facilitation initiative would greatly reduce the cost of doing business in Pakistan.
Several major initiatives have been taken to bring about structural reforms in the education sector. The thrust of these reforms is achieving universal primary education and adult literacy, improving the quality of education, a focus on technical and vocational education. Higher education has received a big boost in the allocation of financial resources and improvement in the quality of education. Annual Budget allocation has been raised ten times during the period under review.
I would also like to respond to her comment inviting Pakistan to consider removing “regulatory duties” of up to 100% on specified imports. There is a provision in the law for imposition of this duty but in practice such high level of duty has never been imposed. At present there are only three items which carry regulatory duty. These are wax paper and sugar which are subject to 10% and carbonless paper which is subject to 5% duty.
There were a number of questions and comments from WTO members about our tariff rates and tariff reforms. While it may be true that the bound tariffs are much higher than applied tariffs and pace of tariff reforms may have slowed since 2002-03, it is attributed to several reasons. First, as a result of deep cuts in tariffs during 1997-2002 periods, it was felt that some period of stabilization is necessary for allowing time for adjustment to local industry and also not to adversely affect tariff revenues. Second, through a series of bilateral and regional trade negotiations, tariff rates are being reduced. Third, due to delay in conclusion of the Doha Round,
and multilateral liberalization, the difference in bound and applied rates could not be addressed. However, the fact that in 2007-08 budget, a new tariff rate of zero percent was introduced shows that the reform process is still continuing. As regards the „water‟ between applied and bound rates, Pakistan expects that as a result of conclusion of the Doha Round and application of the Swiss Formula, difference between the „bound‟ and applied rates could be either eliminated or substantially reduced.
A number of comments have been made relating to Intellectual property protection in Pakistan. Let me briefly reiterate what improvements have been made in this area.
First, a new Intellectual Property Organization (IPO) was set up in April 2005 to integrate all fora of Intellectual Property rights and provide a single, consistent primary source of policy advice and a legislative framework for all types of intellectual property rights. It has been updated and modernized to bring it at par with international standards. New Rules on Patents were published in December 2003 and on trademarks and copy rights in 2004. Draft legislation for protecting plant variety rights is in the final stages.
Besides the legislative and institutional framework, enforcement provisions have been strengthened. Countering copyright and trademark violations became the responsibility of the Federal Investigating Agency (FIA), district police and customs authorities. Anti-piracy cells have been established at all international airports to more effectively prohibit pirated goods. Import or export of goods infringing copy rights, patents and trademarks has been prohibited. Custom‟s department is authorized to detain seize or confiscate illegal imported or exported goods. Tough actions have resulted in major seizures, arrests and closure of piracy operations.
Another area which received several comments related to government procurement. While it is a fact that Pakistan has not joined the Plurilateral WTO Agreement on Government procurement, it has nevertheless reformed the public procurement practices. A Public Procurement Regulatory Authority (PPRA) was established in 2002 to regulate public procurement of goods and services. Our current government procurement framework is based upon international best practices. Open competitive bidding is used for all contracts above Rs.
100,000/- and direct tendering is allowed in only those cases where no advantage is envisaged from competitive bidding.
In services Pakistan has been urged to submit its revised offer and in particular to make commitments in transport, insurance and financial services. We are considering making commitments in the transport sector and improvements in the insurance and finance sector as well as in some other areas. Some references have been made to lack of commitments in cross border supply. Pakistan in its initial offer has made Mode 1 offers in twenty five sub sectors and we intend to make more commitments in this mode of supply.
Some questions were also raised about the delay of statutory notifications to the WTO. It is true that some agricultural notifications were delayed but the main reason was difficulty in collection of countrywide data. However, recently all long-standing notifications have been provided to the WTO Secretariat.
In conclusion, Mr. Chair, we feel that the TPR exercise has been very useful for us. It has enabled us to inform the WTO members of what we have been able to achieve to improve our economy and trade regimes and at the same time we learnt where we are lagging behind. All these constructive remarks and suggestion would enable us to prepare ourselves to be able to carry out more reforms in the next budgetary exercise due in June 2008.
Once again we would like to thank the Secretariat for their very hard work and excellent documentation. We very much appreciate excellent comments and advice from our Discussant Ambassador Karen Tan and all the WTO membership. We were overwhelmed with their complimentary comments and also their frankness where they found us lacking.
Thank you, Mr. Chair.