ISLAMABAD: At a time when the government is struggling to overcome the no-confidence motion, members of Geneva-based World Trade Organisation (WTO) commended the resilience and growth performance of Pakistani economy in light of the global economic turmoil caused by the Covid-19 pandemic and continued complex regional security environment.
The feedback came from the members at the conclusion of the Fifth Trade Policy Review (TPR) on April 1. Pakistan’s side was led by Commerce Secretary Sualeh Faruqui. The last review of Pakistan’s trade policy was held in the year 2015.
The WTO members praised the timely adoption of proactive support measures by the government of Pakistan that allowed the economy to rebound quickly.
At the time of review, 319 advance written questions submitted by 21 members and the 33 delegations that took the floor during the first and second day underline the importance attached by WTO members to Pakistan’s trade and investment policies and practices.
Members praise timely adoption of proactive measures by govt
The members applauded the trade and trade-related structural reforms implemented under the National Tariff Policy 2019-2024, Strategic Trade Policy Framework 2020-25, Vision 2025, “Emerging Pakistan” initiative, and the Pakistan Regulatory Modernisation Initiative.
While acknowledging positive changes with the adoption of a market-determined exchange rate system, Pakistan was encouraged to revise its foreign exchange restrictions. Structural reforms undertaken in areas such as privatisation and competition policy were praised. The members urged Pakistan to continue implementing its reform agenda.
The WTO members felt that efforts in the implementation of critical reforms could be complemented by further actions to address long-standing structural weaknesses and fiscal imbalances. Some Members invited Pakistan to further elaborate on measures aimed at enhancing product diversification and to further open its market.
Pakistan was praised for its constructive and valuable role at the WTO. Members appreciated its participation in negotiations on agriculture, fisheries subsidies, trade and environment, e-commerce and development.
Moreover, Pakistan was invited to engage in the Joint Statement Initiatives, including Services Domestic Regulations, Investment Facilitation for Development and E-Commerce, as well as to support the Ministerial Declaration on the Advancement of Gender Equality and Women’s Economic Empowerment within Trade, and to engage in the Trade and Environmental Sustainability Structured Discussions.
Members commended Pakistan’s ratification of the WTO Trade Facilitation Agreement and the implementation of 86.1 per cent of its commitments. Its participation as an observer in the WTO Agreement on Government Procurement was praised and Pakistan was encouraged to consider accession. Underlining that transparency is a critical element at the WTO, the members urged Pakistan to address its outstanding notifications in several areas as soon as possible.
While appreciating the abolishment of nuisance tariff rates and the subsequent reduction in the average applied Most Favoured Nation (MFN) tariff rate, Members encouraged Pakistan to review high tariffs on certain sectors. They also highlighted the complexity of the tariff and a large amount of water between average bound rates and the average applied MFN rates.
Members appreciated Pakistan’s efforts in improving its customs clearance procedures, including progress in the implementation of the Pakistan Single Window. Concerns were raised with respect to the increase in trade restrictive measures during the review period, including the imposition of regulatory duty on imports, cash margin requirements, lack of refunds for income tax exemptions in Special Economic Zones, temporary duties and export duties and restrictions. Pakistan was invited to review its import compression policy so as to provide a level playing field.
While noting that Pakistan had not imposed safeguard measures, further information was sought regarding operation and procedures for implementing safeguards. Sanitary and phytosanitary issues, including advance analysis were also raised. Certain members asked for further information regarding current incentive schemes and their compatibility with Pakistan’s WTO commitments.
The latest TPR of Pakistan has offered us a good opportunity to deepen our understanding of recent developments in, and challenges to, its trade, economic, and investment policies. Since its fourth TPR in 2015, Pakistan’s initiatives to maintain its participation in the Multilateral Trading System and take advantage of the opportunities it offers were greatly appreciated.
While welcoming Pakistan joining the Madrid International Trademark system and enacting the Geographical Indication Law, some WTO members sought further clarification on plans to accede to other WIPO treaties. Members acknowledged efforts to improve IPR enforcement and encouraged Pakistan to continue these efforts. The members sought further clarification regarding certain aspects of the current IP protection and enforcement regime as well as proposed changes currently under consideration.
At the sectoral level, some members welcomed Pakistan’s efforts to improve productivity in agriculture, and asked for further details on the Agricultural Transformation Programme of 2021. The members commended Pakistan for its commitment to increase the share of renewable energy in the economy and its plan to phase out coal fired power plants.
Concerns were expressed about the lack of diversification of its exports of manufactured goods, and the import prohibition on second-hand commercial vehicles older than three years. Many Members commended Pakistan for launching, inter alia, the National Telecommunications Policy, the National Transport Plan, and the Digital Pakistan Policy, as well as the State Bank of Pakistan’s efforts in promoting financial development to reduce gender gap and boost fintech.
Published in Dawn, April 3rd, 2022