April 2, 2003	Wednesday	Muharram 29, 1424

GENEVA, April 1: Pakistan has sought an extension for yet another three to four years for implementation of trade related investment measures (TRIMs) in the country on the plea to give some more time to the auto industry to adjust itself for the implementation of the new law.

An official source in the WTO secretariat told Dawn on condition of anonymity that it is not likely that Pakistan would succeed in getting a further waiver and, therefore, it should prepare itself for implementation of the TRIMs by end of the current year.

According to the WTO agreement on TRIMs which entered into force on 1 January 1995, all WTO members were required to phase out trade distorting measures such as deletion programmes. Developing countries were given an extra five years to do so.

Since deletion programme is considered important by auto industry and downstream vendor industry to develop local capacity of auto parts, at the expiry of five years grace period, Pakistan sought seven years further extension. After considerable efforts, they were allowed two years and then another two years’ extension was allowed subject to the condition that Pakistan would not ask for further extension.

This means that by the end of this year, the deletion programme will have to be phased out by the Pakistani government in compliance to the WTO agreement.

The source said that the Ministry of Industries which oversees the deletion programme in Pakistan is contending that it has already phased out more than 200 such programmes in other industries such as electronics, electrical machinery such as washing machines, televisions, etc., and for implementing it for auto industry it should be allowed another three years.

Already, in case of Pakistani car industry 50 to 60 per cent of the components are locally manufactured. The ministry is asking the local industry to increase this percentage to about 70 to 80 per cent. It is felt that in case the auto industry is using more local parts, it will, in the long run, bring down car prices. On the other hand, the spirit of the TRIMs agreement is that it should be left to concerned industry to source its components where it finds it economical and that manufacturers should not be forced to buy from any specific sources.

Sources said that Pakistani permanent mission to WTO has joined hands with the developing countries including Brazil and India for changing the relevant provisions of the TRIMS agreement and till that is agreed, to seek a general waiver for another few years for the full implementation of the TRIMs in the developing countries.

Sources in the WTO Secretariat informed Dawn that recently on the basis of a complaint filed by the United States against India, it was decided by the WTO that India’s deletion programme for auto industry was illegal and asked the Indian government to immediately implement the TRIMs. According to the sources, the Indian government has complied with the WTO panel’s decision. In view of this decision, the sources said that now it seemed even more difficult that Pakistan would succeed in getting further waiver.

On the other hand, the car industry in Pakistan is pushing the government for seeking further waiver in the implementation of the TRIMs, which they termed were necessary for the continuation and growth of the auto industry in the country, which other wise would face great financial loss.