PRESS
RELEASE
PRESS/TPRB/1
8 February 1995"Import
liberalization is expected to increase competition
between imports and domestic production and contribute to
more efficient resource allocation and the development of
a more efficient export sector,"Back
to top
Pakistan's
economy has grown steadily over the past decades and,
despite the constraint of a relatively weak
infrastructure, the country has taken substantial steps
to open its economy to the outside world. Tariff levels
and non-tariff protection measures have been reduced
significantly as has state intervention in trade,
according to a WTO Secretariat report on Pakistan's trade
policies and practices.
Pakistan's
medium-term trade policy programme includes further
liberalization of the trade and exchange system and,
during the period 1994-97, tariff rates and other taxes
on international trade are to be cut substantially.
"Import liberalization is expected to increase
competition between imports and domestic production and
contribute to more efficient resource allocation and the
development of a more efficient export sector," says
the report.
In
spite of the recent tariff reductions, Pakistan is still
a high-tariff economy. At present, says the report,
"the simple average of statutory duty rates is 50
per cent, with the highest standard tariff rate of 70 per
cent. Tariff escalation is substantial in areas such as
food, textiles, leather, paper and petroleum."
Pakistan actively participated in the Uruguay Round
negotiations as a developing country with a very
substantial interest in the textile and clothing sector.
While the country had only a very small number of tariff
bindings before the Uruguay Round, Pakistan is now to
bind about 33 per cent of its tariff lines and 81 per
cent of its tariffs for agricultural products. Most
agricultural products will have ceiling rates of 100 per
cent. In the industrial sector, Pakistan will bind 25 per
cent of its tariffs, most at ceiling rates of 40 to 50
per cent. At the end of the implementation of the tariff
reform programme scheduled for 1997, the tariff structure
is expected to improve not only because the still high
taxes on international trade will be reduced, but also
because of further simplification of the tariff structure
through the elimination of most tariff exemptions.
While
Pakistan has made progress in eliminating or reducing
non-tariff barriers to trade such as import licensing
requirements, other non-tariff measures continue to apply
to products whose import is banned for religious, health,
safety, security or other reasons.
The
scope of state trading has been reduced substantially.
The report says that currently, the Trading Corporation
of Pakistan does not seem to have any exclusive or
special trade privileges but that the state-owned Rice
Market Corporation and the Cotton Export Corporation
"still enjoy some inherited advantages over their
private competitors, despite the fact that they do not
enjoy exclusive rights." Exports of raw cotton and
rice are subject to export taxes, either for revenue
reasons or to serve as a disincentive to exporting raw
materials. The scope of such taxes, however, has been
reduced in recent years.
In
conclusion, the report says that Pakistan's economy is
vulnerable to external trade barriers and that the
textile and clothing sector, its main export, has been
subject to a restrictive trade regime - in the form of
the Multi-fibre Arrangement - for decades. "Pakistan
has paid a high price in terms of export losses for this
derogation from the GATT discipline. It is thus very
important that Pakistan's trading partners assume their
responsibilities" and implement the results of the
Uruguay Round. The report says that by establishing a
favourable trading environment, Pakistan will be further
motivated to continue its trade reform and overall
liberalization.
Notes
to Editors
1.
The WTO Secretariat's report, together with a report
prepared by the Government of Pakistan will be discussed
by the WTO Trade Policy Review Body (TPRB) on 15 and 16
February 1995. The review of Pakistan is carried over
from the 1994 programme of trade policy reviews. The
review will be a joint meeting of the TPRB and the GATT
1947 Council. This is the first review of Pakistan since
the launching of the trade policy reviews in December
1989.
2.
The WTO Trade Policy Review Body conducts a collective
evaluation of the full range of trade policies and
practices of each WTO member at regular periodic
intervals and monitors significant trends and
developments which may have an impact on the global
trading system.
3.
The two reports, together with a record of the TPRB's
discussion and of the Chairman's summing up, will be
published in due course as the complete trade policy
review of Pakistan and will be available from the WTO
Secretariat, Centre William, Rappard, 154 rue de
Lausanne, 1211 Geneva 21.
4.
The reports cover developments in all aspects of
Pakistan's trade policies, including domestic laws and
regulations, the institutional framework, trade-related
developments in the monetary and financial sphere, trade
practices by measure and trade policies by sector.
Attached are the summary observations from the
Secretariat's report. Full reports will be available for
journalists from the WTO Secretariat on request.
5.
Since December 1989, the following reports have been
completed: Argentina
(1992), Australia (1989 & 1994), Austria (1992),
Bangladesh (1992), Bolivia (1993), Brazil (1992),
Cameroon (1995), Canada (1990, 1992 & 1994), Chile
(1991), Colombia (1990), Egypt (1992), the European
Communities (1991 & 1993), Finland (1992), Ghana
(1992), Hong Kong (1990 & 1994), Hungary (1991),
Iceland (1994), India (1993), Indonesia (1991 and 1994),
Japan (1990 & 1992), Kenya (1993), Korea, Rep. of
(1992), Macau (1994), Malaysia (1993), Mexico (1993),
Morocco (1989), New Zealand (1990), Nigeria (1991),
Norway (1991), Peru (1994), the Philippines (1993),
Poland (1993), Romania (1992), Senegal (1994), Singapore
(1992), South Africa (1993), Sweden (1990 & 1994),
Switzerland (1991), Thailand (1991), Tunisia (1994),
Turkey (1994), the United States (1989, 1992 & 1994),
Uruguay (1992) and Zimbabwe (1994).
The
Secretariats
report: summary
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TRADE
POLICY REVIEW BODY: PAKISTAN
Report by the Secretariat Summary Observations
Pakistan's
economy has grown steadily over the past decades, despite
the constraint of a relatively weak infrastructure.
Nevertheless, in the 1980s, a number of structural
weaknesses undermined the sustainability of growth and
heightened Pakistan's vulnerability to external shocks.
To address these constraints and attain stable, sustained
growth with financial stability, Pakistan initiated a
comprehensive macroeconomic and structural reform
programme, including measures to liberalize both domestic
activity and the payments system.
Since
the introduction of this programme, Pakistan has made
substantial steps towards greater reliance on market
forces and opening its economy to the outside world. The
levels of tariff and non-tariff protection, and of state
intervention in trade, have been reduced significantly.
This new direction is in sharp contrast with Pakistan's
previous economic policies, which were characterized by
import-substitution and widespread state intervention in
economic life.
The
beginning of the reform process was accompanied by
increasing domestic and external imbalances. The fiscal
deficit widened and domestic liquidity expanded,
contributing to higher inflation. The 1990-91 Middle East
crisis put additional pressure on Pakistan's external
current account position. In 1992/93, Pakistan was
affected by widespread floods and plant diseases. The
growth rate of GDP declined to 2.3 per cent, exports
stagnated, the current account deficit widened to 7.1 per
cent of GDP and gross official exchange reserves declined
to a critically low level by mid-1993. In 1993/94, in
response to continuing domestic and external imbalances,
Pakistan intensified its medium term (1993/94-1996/97)
adjustment and structural reforms. These are aimed at
sustaining annual economic growth at about 7.0 per cent
over the period 1993/94 to 1996/97; reducing inflation to
6 per cent by the end of the period; raising official
reserves to over three months of imports; and reducing
the burden of domestic and external debt.
Pakistan
in World Trade
Largely
as a consequence of the inward-looking trade policy that
Pakistan followed until recently, the country's
participation in world trade is very small (0.2 per cent
in 1992). The share of merchandise exports in GDP was 13
per cent in 1992/93, while that of merchandise imports
was 19 per cent. Intra-industry trade (IIT) rates
calculated for the period 1990-92 indicate a low and even
declining level of IIT, reflecting once again the
isolated and protected nature of Pakistan's economy.
A
particular feature of Pakistan's exports is the heavy
dependence on products belonging to the cotton group.
Cotton and cotton based manufactures account for about 60
per cent of merchandise exports. Other significant
exports include leather products, rice, fish and carpets.
The highly concentrated export structure has made the
country's trade vulnerable to external distortions and
restrictions, and in particular to restraints under the
MFA. Machinery, chemicals, petroleum and petroleum
products, transport equipment and edible oils are the
major import items; since 1980, the share of machinery,
automotive products, telecommunication apparatus and
office machinery has increased rapidly.
Pakistan's
largest trading partner in both exports and imports is
the European Union, with a share of close to 30 per cent,
followed by the United States, Japan and Hong Kong. The
shares of North America and Asia in exports has increased
in recent years, while those of eastern Europe, the
republics of the former Soviet Union and the Middle East
have declined. In the last few years, the shares of
imports from Asia and the Middle East have increased,
while those of North America have fallen.
Institutional
Framework
The
Islamic Republic of Pakistan has a federal structure
composed of four provinces, the federal capital and the
"tribal areas" under federal administration.
Pakistan is a parliamentary democracy under its 1973
Constitution. The President, who must be a Muslim, is the
head of State and represents the unity of the Republic;
he or she is elected at a joint sitting of the Federal
Legislature for a term of five years.
The
Federal Legislature consists of a lower and upper house.
The lower house, the National Assembly, contains 307
members elected directly plus ten members who represent
minorities; the term of election is five years. The upper
house, the Senate, has 87 members who serve for six
years. Matters on the Federal Legislative List are under
the exclusive authority of the Federal legislature. In
respect of matters on Concurrent Legislative List, both
the Federal Legislature and the provincial assemblies
have the right to legislate. Matters not referred to in
either list, may be subject to laws made by a provincial
assembly; however, whenever any provision of an act of a
provisional assembly contradicts an Act of Parliament,
the corresponding provisions of the act of the provincial
assembly are void. It is the understanding of the
Secretariat that trade matters are under the legislative
authority of the Federal Legislature. Money bills must
originate in the National Assembly; other bills may
originate in either house of the Federal Legislature. A
bill must be passed by both houses and then be approved
by the President. The Council of Common Interest, which
is responsible to the Federal Legislature, provides a
forum for decision on matters of mutual interest for both
the provinces and the Federal authorities.
The
Prime Minister, who is the head of the Federal
Government, is elected by the National Assembly. The
formulation of trade policy is under the exclusive
jurisdiction of the Federal Government. Within the
Government, the Ministry of Commerce is responsible for
all trade policy matters. The implementation of trade
policy, beyond the Ministry of Commerce, is the task of
the Central Board of Revenue and Customs. Other agencies
with trade-related powers include the Ministries of
Finance and Economic Affairs; Food, Agriculture and
Cooperatives; Industries; Petroleum and Natural
Resources; Planning and Development; the State Bank of
Pakistan; and the Pakistan Standards Institute.
The
authorities enjoy wide discretionary powers, especially
in tariff and tax-related matters, where a number of
administrative decisions give exemptions and concessions
from general rules in respect of a number of specific
items or traders.
The
National Economic Council (NEC), headed by the prime
Minister, is the supreme economic policy making body. The
NEC reviews overall economic conditions and approves all
major economic and social plans. The Economic
Coordination Committee of the Cabinet (ECC), headed by
the Federal Minister of Finance, deals with day-to-day
matters and coordinates the economic policies initiated
by government agencies.
The
National Tariff Commission advises the Government on
tariff protection and other forms of assistance. To
interact with other ministries and the private sector in
trade policy matters, the Ministry of Commerce has set up
an Advisory Council, in which the private sector is
represented by the Federation of Pakistan Chambers of
Commerce and Industry and Regional Chambers Associations.
In Pakistan, all importers and exporters must be members
of a professional trade, commercial or industrial
association.
Trade
Policy Features and Trends
Pakistan's
economic and trade policies are established in its
indicative five-year plans. The current Eighth Plan
(1993-1998) projects annual, average real GDP growth at 7
per cent, with planned annual average increase in export
volume of nearly 11 per cent, principally in higher
value-added textile products, light and medium
engineering goods and sport and surgical goods. Other
objectives of the plan include limiting import growth to
5 per cent per annum in real terms and a consequent
reduction of the current account deficit from 4.2 per
cent of GDP in 1992/93 to 2.4 per cent in 1997/98. The
authorities expect this to be achieved, inter alia, by
increased domestic production of consumer goods. Care
will need to be taken that the objectives are met by
market forces rather than by administrative means,
including border measures.
Pakistan's
medium-term trade policy programme includes further
liberalization of the trade and exchange system. In the
framework of a three year tariff reform (1994/97), tariff
rates and other taxes on international trade will be cut
substantially and the number of products on the Negative
List will be further reduced. Import liberalization is
expected to increase competition between imports and
domestic production and contribute to more efficient
resource allocation and the development of a more
efficient export sector.
Pakistan
is not a member of any free-trade agreements. Tariffs are
applied almost exclusively on an m.f.n. basis, although
preferences are extended on a relatively small number of
products to certain developing countries in the framework
of the GATT Protocol relating to Trade Negotiations among
Developing Countries. Pakistan, together with Iran and
Turkey, is a member of the Economic Cooperation
Organization and grants a 10 per cent duty reduction on
16 products.
The
European Union and 15 other trading partners grant GSP
tariff treatment to Pakistan's exports. In 1992/93, 43
per cent of Pakistan's exports received preferential
treatment under GSP schemes. In this regard, textiles and
clothing are among the most sensitive areas of GSP
treatment, wholly or partially excluded in a number of
countries.
Recent
evolution
Pakistan
has recognized that the high protection given to the
domestic economy has insulated the country from foreign
competition, generated a strong anti-export bias in
resource allocation and increased inefficiency, waste and
decline of quality. As a result, Pakistan's export
structure has remained over-concentrated on a small
number of agriculture-based products; in more
sophisticated product areas the country's export
structure has been internationally uncompetitive.
Recent
trade-related reforms include the reduction of the
Negative List from 300 to 75 items between 1988 and 1994;
a cut in the average statutory tariff rate from 77 to 50
per cent with further reduction to a maximum of 35 per
cent by 1997; the integration of "para-tariffs"
into the single tariff rate by mid-1994; reduction,
followed by elimination of import licensing and the
Restricted List; liberalization of the foreign investment
régime and abolition of industrial licensing.
Pakistan
was an active participant in the Uruguay Round, with the
major objective of strengthening the multilateral trading
system, phasing out the Multifibre Arrangement (MFA),
integrating the textile and clothing sector into the
GATT, bringing agriculture fully under GATT disciplines
and providing special and differential treatment to
developing countries and the elaboration of an
"equitable agreement for trade in services".
Pakistan found the results of the Uruguay Round
"discouraging" mainly due to less than average
tariff reductions in its main export product areas and
the slow speed of the integration of the textile sector
into the GATT.
Type
and incidence of trade policy instruments
Despite
substantial tariff reductions in recent years, Pakistan
is still a high-tariff economy. At present, the simple
average of statutory duty rates is 50 per cent with the
highest standard tariff rate of 70 per cent. Tariff
escalation is substantial in areas such as food,
textiles, leather, and paper, petroleum.
In
the 1994/95 Budget year, the 6 per cent import fee, the 5
per cent Iqra surcharge and regulatory duties have been
integrated into a single customs tariff. Nevertheless,
the tariff system is still not transparent, as numerous,
mostly time-bound, exemptions and concessions are applied
under the system of Special Regulatory Orders (S.R.Os).
As a consequence, different rates are frequently applied
to the same product and applied rates are substantially
lower than statutory duties. The tariff reform programme,
to be implemented between 1994 and 1997, is expected to
improve the tariff structure not only through reducing
the still high taxes on international trade, but also
through further simplification of the tariff structure
through elimination of most tariff exemptions and
concessions.
Pakistan
had only a very small number of tariff bindings before
the Uruguay Round. Under the Uruguay Round, the country
is to bind about 33 per cent of its tariff lines, 81 per
cent of its tariffs in HS chapters 1-24 (94 per cent of
agricultural products as defined in the Uruguay Round)
and 25 per cent of tariffs in chapters 25-97.
Pakistan
did not sign the Tokyo Round Customs Valuation Code, due
to its perceived difficulties in implementing the
"transaction value" concept of the Code in
circumstances when false invoicing and cheating on
imports constituted a serious problem. The valuation of
imported goods is made through comparing declared values
with prices published regularly in the official Valuation
Manual; this can complicate customs clearance procedure
and lead to a lack of transparency and greater
administrative discretion in the system. Smuggling is
substantial, partly due to high tariffs. It is expected
that the implementation of tariff reforms will lead to a
decline of this illegal activity. By accepting the
results of the Uruguay Round, Pakistan is committed to
adopting the valuation methods specified in the
Agreement.
Until
recently, import prohibitions, import licensing and other
non-tariff measures were extensively used to control
import flows. In the last several years, Pakistan has
made substantial progress in eliminating or reducing
non-tariff barriers to trade. The number of tariff lines
included in the Negative List has been reduced from 300
to 75 (whose importation is prohibited, unless
specifically authorized).
The
scope of import licensing was reduced then completely
eliminated in 1993. The Import Policy Order, 1994, has
also abolished the Restricted List, products on which
were importable only through designated importers. Until
mid-1994, certain products (agricultural tractors and
some motor vehicles in CBU condition) were subject to
standardization requirements, which meant that only some
specified makes were importable; this restriction has
also been abolished, as have import quotas on machinery
and millwork.
However,
Pakistan still applies a substantial number of non-tariff
measures. The Negative List includes not only products
whose import is banned for religious, health or safety
reasons, but also goods such as textile and clothing
items, which are restricted, as stated by the
authorities, for balance-of-payments reasons. According
to the Pakistani authorities, items on the Negative List
can be imported in terms of the relevant provisions of
the Import Policy Order. However, the Secretariat is not
aware of the country's practice in this respect and it is
not clear, given that import licensing has been
abolished, what instruments are used to authorize imports
of items which are on the Negative List. Other non-tariff
measures applied to imports include various health,
safety and procedural requirements, motivated mainly by
safety, health and security considerations. All imports
from India are prohibited, unless authorized by specific
legislation.
The
scope of State-trading has been reduced substantially.
Currently the Trading Corporation of Pakistan, does not
seem to have any exclusive or special trade privileges.
However, the state-owned Rice Market Corporation and the
Cotton Export Corporation still enjoy some inherited
advantages over their private competitors, despite the
fact that they do not enjoy exclusive trade rights.
Government
procurement policies and practices of Pakistan are not
fully known to the Secretariat. The relevant rules in
force clearly favour domestic sources over foreign ones.
The authorities, however, state that recently the
practice has changed and no preferences are given to
local production.
Pakistan
makes efforts to base its standards on international
norms. National standards on a small number of items are
inferior to international norms due to the domestic
non-availability of the required technology. Pakistan
standards do not seem to constitute a major impediment to
trade.
A
number of major competitive export products of the
country, such as raw cotton and rice, are subject to
export taxes, either for revenue reasons or to serve as
disincentive to exporting raw materials. However, the
scope of such taxes has been reduced in recent years.
Some agricultural products bear export restrictions, to
ensure adequate internal supply. Exports of textiles and
clothing to countries with which Pakistan has concluded
bilateral restraint agreement under the MFA, are subject
to export quotas.
Pakistan
provides export incentives mainly in the form of
compensation to exports by duty and tax concessions, duty
free status, export processing zones and bonded
warehousing. Import liberalization is considered as the
main vehicle for promoting exports and diversifying the
product structure. About half of Pakistan's exports
benefit from concessionary credits; although state
subsidies are not involved, the export finance system is
designed in a way that puts the burden of such credits on
the non-export sector. Tax exemptions on income
originating from exports are also widely available.
During
the first four decades of Pakistan's history,
import-substituting industrialization was financed from
resources transferred from agriculture. Domestic prices
of agricultural raw materials and food were kept low and
the urban population received generous subsidies. In
recent years, the degree of state intervention has been
reduced, agricultural prices have been brought closer to
world
market
levels and revenue transfer from agriculture to industry
has been diminished. Nevertheless, available Producer
Subsidy Equivalent calculations, based on 1986-90 data,
indicate that PSEs were negative for Pakistan's major
export crops such as cotton and basmati rice. This fact
showed that government policies were still biased against
agriculture; input subsidies to agricultural producers
were more than offset by the taxing effect of other
agriculture-related policy instruments. The major goals
of the National Agricultural Policy, adopted in May 1991,
include the establishment of social equity, self
reliance, export orientation, sustainability and enhanced
productivity.
Pakistan
places special emphasis on industrialization. The
Government gives importance to private investment in
high-technology, value added and export industries;
support for industrial development include tax
concessions, exemption from customs duty, import and
monetary incentives. Development of engineering
industries is supported by a non-compulsory
"deletion" programme, with incentives for
encouraging local content; once an entrepreneur has
agreed to a deletion programme, fiscal penalties can be
imposed for non-compliance.
Policies
affecting industry have changed substantially since 1988.
Over 100 enterprises have been privatized and the degree
of State intervention in industrial matters has been
reduced. Industrial licensing has been abolished, except
in a small number sectors and foreign investment policy
has become more liberal. The insulation of Pakistan's
industry from the rest of the world has diminished, but
industry still remains protected by high tariffs and some
other measures.
Temporary
measures
Although
Pakistan's legislation authorizes anti-dumping or
countervailing duties, no such measures have ever been
imposed. To date only one application for anti-dumping
action has been reviewed by the Commission, on imports of
jute from Bangladesh. [he full implementation of the
present tariff reform and trade liberalization programme
is likely to expose a number of domestic producers to
external competition; that may bring an increased number
of applications for anti-dumping or countervailing
actions. Pakistan is a signatory to both the Anti-Dumping
and the Subsidies Code. Pakistan does not have separate
safeguard legislation and it has never taken safeguard
actions.
New
initiatives
Recently,
the Government of Pakistan has intensified the reform of
its trade system with the objective to enhance its
effectiveness and export capabilities through increased
market orientation and competition with foreign goods and
services. As noted, para-tariff measures have been
integrated into the customs duty and at the end of the
implementation of the tariff reform programme in 1997,
the highest tariff rates will be reduced to 35 per cent
and most tariff concessions and exemptions will be phased
out. It is also expected that the number of items on the
Negative List will be reduced substantially.
Trade
Policies and Foreign Trading Partners
With
its comprehensive macroeconomic and structural reform
programme introduced since 1988, Pakistan has made the
first substantial steps towards reversing the country's
inward-looking, isolationist policies and greater
integration into the world economy. These reforms, if
consistently implemented, and accompanied by appropriate
macroeconomic and social measures, will lead to more
efficient resource allocation, diversified economic
development and increased competitiveness of Pakistan's
economy on both domestic and foreign markets.
Pakistan's
trade measures are applied basically on a
non-discriminatory basis; it signed the Tokyo Round codes
with the exception of the Customs Valuation and the
Government Procurement Codes. Under the Uruguay Round,
Pakistan has accepted all the Multilateral Trade
Agreements; however, the low proportion of tariff rates
bound by Pakistan, even after the Uruguay Round,
indicates that its growing integration into the trading
system currently underway will continue to be gradual.
Pakistan
is a developing country, whose economy is vulnerable to
external trade barriers. A particular feature of
Pakistan's economy is that its leading export product
group, textiles and clothing, has been subject to a
restrictive trade régime for decades. Pakistan has paid
a high price in terms of export losses for this
derogation from the GATT discipline. For this reason,
Pakistan is deeply interested in the integration of the
textile sector, as export opportunities in this product
area have a direct and substantial influence on the
country's economic growth. It is thus very important that
Pakistan's trading partners assume their responsibilities
through the ratification and consistent implementation of
the Uruguay Round results, in establishing a favourable
trading environment that motivate Pakistan to continue
and deepen its trade reform and liberalization.
Government
report
Back
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TRADE
POLICY REVIEW BODY: PAKISTAN
Report by the Government
Pakistan's
trade policy is formulated with the aim of maximising
gains from international trade through the promotion of
freer trade in the context of a global multilateral
trading system, and the encouragement of efficient and
competitive domestic production activities. A free and
competitive trading and production environment will
contribute to the economic and social development of
Pakistan. Towards this end, the Government has
implemented an extensive liberalisation of the trade
regime. Over the last six years, non-tariff barriers have
been replaced with tariffs; the maximum level of tariffs
has been reduced to 70 per cent with a few exceptions;
the tariff structure has been rationalized with the aim
of reducing disparities in effective protection; and all
'other charges' have been merged in the statutory tariff
regime; all items have been made importable except for a
few whose entry is restricted on religious, health and
security considerations, or on account of balance of
payments difficulties.
To
complement the liberalisation of the trade regime, the
exchange system has been fully liberalised. As of July 1,
1994, Pakistan has adopted current account convertibility
of the rupee and eliminated all multiple currency
practices. Accordingly Pakistan has accepted and
fulfilled the obligations of Article VIII of the IMF's
Articles of Agreement.
One
of the important objectives of the measures described
above has been the elimination of an anti-export bias in
resource allocation and to encourage efficient and
competitive import substituting activities. The Trade
Policy announced by the Government for 1994/95 specified
the following objectives:
(i)
Prepare Pakistan's industry for a freer global trading
system emerging from the Uruguay Round Agreements.
(ii)
Stimulate exports by facilitating easy access to raw
materials, intermediates and machinery.
(iii)
Encourage efficient and competitive import substitution.
(iv)
Impart greater transparency by minimizing administrative
controls.
(v)
Simplify and streamline procedures to make these user
friendly.
(vi)
Ensure availability of essential commodities in the
domestic economy.
(vii)
Adopt tariff measures instead of quantitative
restrictions.
(viii)
Facilitate the transfer of technology into the country.
(ix)
Strengthen research and development capabilities and
encourage human resource development.
(x)
Liberalise controls in the economy and place greater
reliance on market forces to promote efficiency and
growth.
(xi)
And to provide a stable economic environment through
greater continuity in policy planning.
Problems
in External Markets
As
stated elsewhere, Pakistan is one of the founder members
of the General Agreement. Oddly enough, however, the two
most important areas of its export interest have largely
been kept outside the scope of the normal rules of the
multilateral trading system, and of the successive rounds
of liberalisation under the GATT auspices. While
agriculture fell victim to trade distortions through
large-scale subsidisation by the major industrialised
countries, the textiles sector has encountered systematic
barriers against normal growth of trade and
discriminatory treatment through the Multi-fibre
Arrangement and its predecessor short and long-term
arrangements. Even the results of the Uruguay Round have
fallen short of the Pakistan's genuine expectations in
these areas. In agriculture, massive subsidisation, both
for production and export, has been legitimised. In
textiles, likewise, the restrictions are likely to
persist for a long period of ten years.
In
addition, exports are being increasingly subjected to
initiation of anti-dumping and countervailing
investigations which creates uncertainty and depresses
the business sentiment. Investigation periods are
sometimes quite lengthy and the legal costs of defending
against these cases is prohibitive. The phenomenon is
matter of particular concern because although a number of
investigations initiated into alleged dumping or
subsidisation of imports from Pakistan all resulted in
negative findings, they had already created a damaging
impact on normal growth of trade.
During
the last few years, the growing tendency towards creation
of trading blocs is extremely worrisome to Pakistan,
especially as these discriminate against non-member
countries. Back
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