ISLAMABAD, March 20: The World Trade Organization (WTO) has set March 31 as a deadline for conversion of specific duties into ad valorem duties on industrial goods as part of on-going negotiation on non-agriculture market access (NAMA).
A senior official told Dawn on Monday that Pakistan has a single tariff line of specific duty on one industrial good which would be converted into ad valorem for compliance with the WTO order.
The earlier conversion of the specific duties — duties in the shape of kilograms or quantity wise etc., — into ad valorem duties (AVs) would provide a level-playing field to the products of developing countries.
The conversion of specific duties into ad valorem was a condition for finalizing formula for cutting of tariffs on industrial goods which was expected to be agreed by the member countries latest by May next, added the official.
The WTO, however, urged the member countries for conversion of specific duties on agriculture produce as well but not deadline has been fixed for it.
Pakistan, like many other developing countries, is also facing high and complicated non ad valorem duties (NAVs) — specific duties — in around 50 countries, which restricted export of the industrial and agriculture goods to those markets.
The Official said that Pakistan along with other developing countries would raise the issue at a mini-ministerial type of meeting scheduled for next month in Geneva.
Pakistan was one of the 17 WTO-member countries having NAVs tariff lines less than 1 per cent, which was the ideal form of tariffication. This means that Pakistan has only 6 tariff lines of NAVs of its total 5409 tariff lines mostly on agriculture products — oils.
The officials said that this was the simplest tariff with no para tariffs as compared to other trading partners like Switzerland having the highest of 83 per cent of NAVs on both agriculture and industrial goods. And 33 countries have less than 5 per cent of the NAVs of the total tariff lines.
The country wise details on the basis of reports submitted to WTO secretariat in the year 2001 showed that South Africa maintained 24.6 per cent of the tariff lines on both industrial and agriculture products; Thailand 22 per cent; Russia 14.3 per cent; Belarus 14.3 per cent; Cyprus 13.5 per cent; United States 12.6 per cent; Kenya 11 per cent and European Union 9.7 per cent.
These NAVs maintained by these countries were apparently for providing protection to the sectors against any imports from both developing and least developing countries (LDCs). Moreover, there was no mechanism to be adopted for applying any cut in tariffs on these products under the current negotiation on agreement on agriculture and non-agriculture market access (NAMA).
The tariff rationalization is important to ensure that the economic activities in which the country has long-term comparative advantage were promoted. Pakistan had already reduced its maximum tariff to 25 per cent and removed non-tariff barriers protection to domestic industry excluding the automobile sector.
The official said that in case of conversion of these NAVs into AVs, Pakistan would get maximum market for export of its agriculture and industrial produce in those countries.