Doha Round success bodes well for Pakistan

* Tariffs on textiles and clothing will be cut from 12pc to 32pc to less than 7pc charged in the US and EU

By Sajid Chaudhry

ISLAMABAD: After the successful completion of Doha Round negotiations, tariffs on Pakistan’s major exports like textiles and clothing will be cut from the existing 12-32 percent to less than 7 percent charged in the United States and European Union.

If a coefficient of 23 is agreed for developing countries, Pakistan’s import tariffs will be reduced to 15 percent or less over the next nine years. Furthermore, there would be no need to lower the existing applied tariffs for sensitive industries such as automobiles and some consumer goods.

In a paper presented at European Commission-Pakistan TRTA consultation highlighting the “Doha Work Programme: Current Situation and Issues Relating to Pakistan”, Dr Manzoor Ahmed, Ambassador and Permanent Representative of Pakistan at World Trade Organization (WTO) said that after 6 years of Doha Round negotiations, draft modalities on agriculture non-agriculture market access (NAMA) have been circulated on July 17 at Geneva. Preliminary discussions among WTO member countries and key players show that members are closing gaps on most issues relating to Agreement on Agriculture (AOA) while on key issues of industrial goods, NAMA (coefficients) serious differences still remain. In the area of agriculture negotiations are in a more advanced stage on export competition, less so on domestic support and market access to the developing countries. Member countries had agreed in principle to complete elimination of export subsidies by 2013 at 6th WTO Ministerial meeting held at Hong Kong in 2005.

In his paper he mentions that during the current round of negotiations for over-all trade distorting support (OTDS) cuts between 66-73 percent have been proposed. This implies cuts of United States OTDS from $48.2 billion to somewhere between $16.4 billion to $13 billion.

To provide greater market access for developing countries, average tariff cuts of 54 percent have been proposed for developed countries. However, two-third cuts of for developed countries have been proposed. Developed countries would be able to designate 4-6 percent of their dutiable tariff lines as “Sensitive Products”.

Agriculture negotiation’s implications for Pakistan highlighted by the Ambassador suggest that there would be improved market access and higher export prices for rice, ethanol, horticulture and other agriculture products would be available to Pakistan. Quoting the Asian Development Bank’s (ADB) study he points out that removal of subsidies on cotton by the developed world would mean 2 million farmers would be getting out of poverty. There would be very little impact on Pakistan’s current agriculture import tariffs.

Highlighting issues relating to NAMA, Dr Manzoor observes that tariff cuts with coefficients of 8 or 9 for developed countries and figures ranging from 19 to 23 for developing countries are being discussed for liberalisation of trade in industrial goods. There would be flexibility for the developing countries to apply less than formula cut for 10 percent or no cut for 5 percent tariff lines.

He said that there would be a period of 5 years to be available to the developed countries and 9 years period to the developing countries for reduction in the import tariffs.