ISLAMABAD, Nov 23: Pakistan is yet to enjoy a preferential market access for exports of its information technology products because of non-acceptance of the WTO information technology agreement (ITA) effective from July 1, 1997.

Well-placed sources told Dawn on Wednesday that the agreement had been adopted so far by 60 WTO member countries both exporting and importing representing approximately 90 per cent trade in IT products at zero customs duties.

The ITA, which was solely a tariff cutting mechanism on IT products, could only be available to signatory member countries, thus Pakistan remained out of the ambit of this concession.

India, the hub of IT products, had joined the club last year by reducing customs duty to zero on the IT-related products, but at the same time it compensated the local IT industries by giving them a protection through some domestic regulations. Indian IT exporters are also enjoying by exporting IT products at preferential duties to the international market.

Even after around six years of the implementation of the ITA, Pakistan has not make any worthwhile analysis to work out the pros and cons of the agreement viz-a-viz the local IT industries. To join the club Pakistan would have to reduce customs duty to zero per cent on around 217 IT products for the signatory countries. IT-related products include computer products, medical equipments, telecommunication equipments, etc.

Currently, Pakistan has exempted some parts of computer-related products from customs duty. Only 32-35 computer-related products are imported annually. Moreover, the import of IT-related products generated around Rs3-4 billion revenues to the national exchequer annually, which in case of zero-duty, would mean that the exchequer would be deprived of this amount.

The sources said the ministry of commerce needed to work in collaboration with all stakeholders to evaluate the impact of joining of the agreement on local industries, prospect for export of IT products and means of generation of revenue in case of the revenue loss owing to reduction of custom duty to zero on 217 items.

There is now no need for joining the agreement in haste, as those who had already joined the club had captured the whole IT market, added the sources.

Moreover, there are three basic principles that one must abide by to become an ITA participant: all products listed in the declaration must be covered; all must be reduced to a zero tariff level; and all other duties and charges must be bound at zero.

There is no exception, however, to product coverage for sensitive items, it is possible to be undertaken under the ITA in the WTO on an MFN basis and therefore, benefits accrue to all other WTO members.