1. International Trade and theInternational Trade and the
WTOWTO

2. International Trade and theInternational Trade and the
WTOWTO
 WTO – An IntroductionWTO – An Introduction
 GATT:GATT: Negotiations on Agriculture in the WTONegotiations on Agriculture in the WTO
NAMA Negotiations in the WTONAMA Negotiations in the WTO
 Regulatory Framework in Pakistan & NTCRegulatory Framework in Pakistan & NTC

3. WTO – An IntroductionWTO – An Introduction

4. WTO –WTO – An IntroductionAn Introduction
 The World Trade Organization (WTO) is the principalThe World Trade Organization (WTO) is the principal
international organization governing world trade.international organization governing world trade.
 It was established in 1995 as a successor institution to theIt was established in 1995 as a successor institution to the
General Agreement on Tariffs and Trade (GATT) whichGeneral Agreement on Tariffs and Trade (GATT) which
was a post-World War II institution.was a post-World War II institution.
 WTO has 153 member countries, representing 95% ofWTO has 153 member countries, representing 95% of
world trade.world trade.
 It aims to provide fair and stable conditions for theIt aims to provide fair and stable conditions for the
conduct of international trade with a view to encouragingconduct of international trade with a view to encouraging
trade and investment that will raise living standardstrade and investment that will raise living standards
worldwide.worldwide.
 WTO is a forum where countries continuously negotiateWTO is a forum where countries continuously negotiate
exchanges of trade concessions to further lower the tradeexchanges of trade concessions to further lower the trade
barriers all over the world.barriers all over the world.

5. WTO –WTO – An IntroductionAn Introduction (cont…. 2)(cont…. 2)
 Decisions within the WTO are made by memberDecisions within the WTO are made by member
countries, not by staff and by consensus, not bycountries, not by staff and by consensus, not by
formal vote.formal vote.
 High-level policy decisions are made by theHigh-level policy decisions are made by the
Ministerial Conference, which is a body of politicalMinisterial Conference, which is a body of political
representatives (trade ministers) which meet at leastrepresentatives (trade ministers) which meet at least
every two years.every two years.
 Operational decisions are made by the GeneralOperational decisions are made by the General
Council ( representative from each member country)Council ( representative from each member country)
which meets monthly and chair rotates annually.which meets monthly and chair rotates annually.

6. WTO –WTO – An IntroductionAn Introduction (cont…. 3)(cont…. 3)
 GATT came into force in1948 with 23GATT came into force in1948 with 23
founding members.founding members.
 It was intended to promote nondiscriminationIt was intended to promote nondiscrimination
in trade among countries, with the view thatin trade among countries, with the view that
open trade was crucial for economic stabilityopen trade was crucial for economic stability
and peace.and peace.
 Different trade rounds were held so as toDifferent trade rounds were held so as to
liberalize the trade.liberalize the trade.

7. GATT and WTO Trade RoundsGATT and WTO Trade Rounds 11stst
Round -Round - Geneva in 1947Geneva in 1947
23 Countries participated23 Countries participated
Decided to cut 45,000 trade tariffsDecided to cut 45,000 trade tariffs
 22ndnd
Round -Round - France in 1949France in 1949
13 Countries participated13 Countries participated
Proposed further reductions in 5,000 tariffsProposed further reductions in 5,000 tariffs
 33rdrd
Round -Round - Britain in 1950-51Britain in 1950-51
38 Countries participated38 Countries participated
Proposed further reductions in 8,700 tariffsProposed further reductions in 8,700 tariffs
 44thth
Round -Round - Geneva in 1955-56Geneva in 1955-56
26 Countries participated26 Countries participated
Proposed to Cut Custom Tariffs with a total value of US$2.5 bnProposed to Cut Custom Tariffs with a total value of US$2.5 bn
 55thth
Round -Round - (Dillion Round) in Geneva in 1960-62(Dillion Round) in Geneva in 1960-62
26 Countries participated26 Countries participated
Proposed to cut 4,400 tariffs covering US$.9 bn worth of tradeProposed to cut 4,400 tariffs covering US$.9 bn worth of trade
 66thth
Round -Round - (Kennedy Round) in Geneva in 1964-67(Kennedy Round) in Geneva in 1964-67
62 Countries participated62 Countries participated
Decided on substantial tariffs reductions on all industrial productsDecided on substantial tariffs reductions on all industrial products
covering US$40bn of trade.covering US$40bn of trade.

8. GATT and WTOGATT and WTO Trade Rounds … Cont… 2Trade Rounds … Cont… 2
 77thth
RoundRound -- (Tokyo Round) in Geneva in 1973-79(Tokyo Round) in Geneva in 1973-79
102 countries participated102 countries participated
-Customs cuts averaging 20% to 30% covering US$300 bn-Customs cuts averaging 20% to 30% covering US$300 bn
- Improved framework for subsidies, customs rates and- Improved framework for subsidies, customs rates and
technical obstacles to trade.technical obstacles to trade.
 88thth
Round -Round - (Uruguay Round) started in Uruguay ended in Morroco 1986-94(Uruguay Round) started in Uruguay ended in Morroco 1986-94
123 countries participated123 countries participated
The round led to the creation of WTO, and extended the range of tradeThe round led to the creation of WTO, and extended the range of trade
negotiations, leading to major reductions in tariffs (about 40%) andnegotiations, leading to major reductions in tariffs (about 40%) and
agricultural subsidies, an agreement to allow full access for textiles andagricultural subsidies, an agreement to allow full access for textiles and
clothing from developing countries, and an extension of intellectual propertyclothing from developing countries, and an extension of intellectual property
rights.rights.
 99thth
Round -Round - (Doha Round) started - in Doha in 2001 ( at forth Ministerial Conference)(Doha Round) started - in Doha in 2001 ( at forth Ministerial Conference)
- in Cancun in 2003 (at fifth Ministerial Conference)- in Cancun in 2003 (at fifth Ministerial Conference)
- in Hong Kong in 2005 (at sixth Ministerial Conference)- in Hong Kong in 2005 (at sixth Ministerial Conference)
- in Geneva in July 2006 (at seventh Ministerial- in Geneva in July 2006 (at seventh Ministerial
ConferenceConference Not yet concluded.Not yet concluded.
141 countries participated,141 countries participated,
Subject covered are tariffs, non-tariffs measures, agriculture, labour standards,Subject covered are tariffs, non-tariffs measures, agriculture, labour standards,
environment, competition, investment, transparency, patents etc.environment, competition, investment, transparency, patents etc.

9. WTO AgreementsWTO Agreements
 Agreement on AgricultureAgreement on Agriculture
 Agreement on Textiles & Clothing (ATC)Agreement on Textiles & Clothing (ATC)
 Agreement on Subsidies and Countervailing MeasuresAgreement on Subsidies and Countervailing Measures
 Agreement on Anti-DumpingAgreement on Anti-Dumping
 Agreement on SafeguardsAgreement on Safeguards
 Agreement on Trade Related Investment Measures (TRIMs)Agreement on Trade Related Investment Measures (TRIMs)
 Agreement on Custom ValuationAgreement on Custom Valuation
 Agreement on Technical Barriers to Trade (TBT) and on Sanitary and Phytosanitary MeasuresAgreement on Technical Barriers to Trade (TBT) and on Sanitary and Phytosanitary Measures
(SPS)(SPS)
 Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)
 General Agreement on Trade in Services (GATS)General Agreement on Trade in Services (GATS)
 Understanding on Dispute Settlement (DSU)Understanding on Dispute Settlement (DSU)
 Special & Differential Treatment ( S& D )Special & Differential Treatment ( S& D )

10. GATTGATT
Negotiations onNegotiations on
Agriculture in the WTOAgriculture in the WTO

11. Agreement on Agriculture - ObjectivesAgreement on Agriculture - Objectives
 To establish a fair and market-oriented agricultureTo establish a fair and market-oriented agriculture
trading system.trading system.
 To initiate a reform process through negotiation ofTo initiate a reform process through negotiation of
commitments on support and protection.commitments on support and protection.
 To establish strengthened and operationally effectiveTo establish strengthened and operationally effective
rules and disciplines.rules and disciplines.
 To provide for substantial progressive reduction inTo provide for substantial progressive reduction in
support and protection.support and protection.
 To correct and prevent restrictions and distortions inTo correct and prevent restrictions and distortions in
world agricultural markets.world agricultural markets.
 To achieve specific binding commitments in ;marketTo achieve specific binding commitments in ;market
access, domestic support and export competition.access, domestic support and export competition.

12. Special and Differential treatment forSpecial and Differential treatment for
developing countriesdeveloping countries
 S & D is an integral element of the negotiations, andS & D is an integral element of the negotiations, and
taking into account the possible negative effect of thetaking into account the possible negative effect of the
implementation of the reform programme on least-implementation of the reform programme on least-
developed and net food-importing developing countries.developed and net food-importing developing countries.
 While implementing their commitments the developedWhile implementing their commitments the developed
countries to take fully into account the particular needscountries to take fully into account the particular needs
and conditions of developing countries.and conditions of developing countries.
 Greater market access for agriculture products ofGreater market access for agriculture products of
particular interest to developing countries.particular interest to developing countries.
 Fullest liberalization of trade in tropical products andFullest liberalization of trade in tropical products and
products of importance to the diversification ofproducts of importance to the diversification of
production from the growing of illicit narcotic crops.production from the growing of illicit narcotic crops.

13. Reduction commitments in the UruguayReduction commitments in the Uruguay
RoundRound
Developed DevelopingDeveloped Developing
(1995-2000)(1995-2004)(1995-2000)(1995-2004)
 Market AccessMarket Access
Average tariff cuts for all ag.products -36% -24%Average tariff cuts for all ag.products -36% -24%
Minimum tariff cuts per product -15% -10%Minimum tariff cuts per product -15% -10%
 Domestic SupportDomestic Support
Total cuts in aggregate measurement ofTotal cuts in aggregate measurement of
support -20% -13%support -20% -13%
 Export SubsidiesExport Subsidies
Value cut -36% -24%Value cut -36% -24%
Volume Cut -21% -14%Volume Cut -21% -14%

14. Domestic SupportDomestic Support
 Green Box - Research, Extension, PDS,DecoupledGreen Box - Research, Extension, PDS,Decoupled
payments etc.payments etc.
 Blue Box - Production Limiting Subsidies ;Blue Box - Production Limiting Subsidies ;
 Amber Box - AMS-subject to reduction commitments;Amber Box - AMS-subject to reduction commitments;
- Product specific (MSP)- Product specific (MSP)
- Non product specific (input subsidies; fertilizers, power,- Non product specific (input subsidies; fertilizers, power,
irrigation etcirrigation etc

15. Domestic Support (contd)Domestic Support (contd)
 De minimis support;De minimis support;
Allowed WTO Members to exempt from the calculationAllowed WTO Members to exempt from the calculation
of the AMS, below a certain threshold level;of the AMS, below a certain threshold level;
- Developed countries: 5% of the value of agricultural- Developed countries: 5% of the value of agricultural
production of the product concerned and 5% of totalproduction of the product concerned and 5% of total
value of agricultural production.value of agricultural production.
- Developing countries: 10% of the value…………..- Developing countries: 10% of the value…………..

16. The Doha Mandate for negotiationsThe Doha Mandate for negotiations
““We commit ourselves to comprehensive negotiationsWe commit ourselves to comprehensive negotiations
aimed at:aimed at:
 Substantial improvement in MARKET ACCESS;Substantial improvement in MARKET ACCESS;
 Reductions of, with a view to phasing out, all forms ofReductions of, with a view to phasing out, all forms of
EXPORT SUBSIDIES;EXPORT SUBSIDIES;
 Substantial reductions in trade distorting DOMESTICSubstantial reductions in trade distorting DOMESTIC
SUPPORT.SUPPORT.

17. Negotiating priorities for PakistanNegotiating priorities for Pakistan
 Highest possible tariff reductions. (even U.S proposal forHighest possible tariff reductions. (even U.S proposal for
55%-90% for developed and slightly less for developing)55%-90% for developed and slightly less for developing)
 Maximum tariff caps.(75% for developed and 100% forMaximum tariff caps.(75% for developed and 100% for
developing)developing)
 Expansion of tariff rate quotas. (from the current 5% toExpansion of tariff rate quotas. (from the current 5% to
20% of domestic consumption, with and end-date agreed20% of domestic consumption, with and end-date agreed
for their eventual elimination)for their eventual elimination)

18. Negotiating priorities for Pakistan (contd)Negotiating priorities for Pakistan (contd)
 The TRQ in-quota tariffs should be eliminated whereThe TRQ in-quota tariffs should be eliminated where
substantial under fill exists.substantial under fill exists.
 Sensitive products must be limited to maximum of 1%Sensitive products must be limited to maximum of 1%
-2% of all tariff lines.-2% of all tariff lines.
 Special products must be limited to 2% - 3% of all tariffSpecial products must be limited to 2% - 3% of all tariff
lines.lines.
 A Special Safeguard Mechanism, with strict andA Special Safeguard Mechanism, with strict and
transparent guidelines.transparent guidelines.

19. Negotiating priorities for Pakistan (contd)Negotiating priorities for Pakistan (contd)
 Elimination of Tariff escalation through the use ofElimination of Tariff escalation through the use of
progressively higher tariff reductions for more processedprogressively higher tariff reductions for more processed
products.products.
 Most restrictive overall level of support. (minimallyMost restrictive overall level of support. (minimally
acceptable position is the G-20 proposal of 80%acceptable position is the G-20 proposal of 80%
reduction for EU and 70% for the U.S).reduction for EU and 70% for the U.S).
 Product specific caps for the Amber Box and the BlueProduct specific caps for the Amber Box and the Blue
Box.Box.

20. Negotiating priorities for Pakistan (contd)Negotiating priorities for Pakistan (contd)
 Capping of the Blue box at 2.5% of the value ofCapping of the Blue box at 2.5% of the value of
production.production.
 Commitment to review the Green and Blue box criteria toCommitment to review the Green and Blue box criteria to
ensure that these programs are truly non-trade distortingensure that these programs are truly non-trade distorting
and production limiting.and production limiting.
 Possibility of a cap on Green Box expenditures.Possibility of a cap on Green Box expenditures.
 Elimination of all forms of export subsidies, includingElimination of all forms of export subsidies, including
subsidy elements of export credits, state trading andsubsidy elements of export credits, state trading and
food aid.food aid.

21. NAMA NegotiationsNAMA Negotiations
in the WTOin the WTO

22. WTO NAMA Negotiations :WTO NAMA Negotiations : (Non Agriculture Market Access)(Non Agriculture Market Access)
Challenges and opportunities for PakistanChallenges and opportunities for Pakistan
The Doha Ministerial Declaration requires that negotiationsThe Doha Ministerial Declaration requires that negotiations
should aim by modalities to be agreed upon toshould aim by modalities to be agreed upon to
a)a) Reduce or eliminate tariffsReduce or eliminate tariffs
b)b) Reduce or eliminate tariff peaksReduce or eliminate tariff peaks
c)c) Reduce or eliminate non tariff barriersReduce or eliminate non tariff barriers
d)d) Not exclude any productsNot exclude any products
e)e) Allow less than full reciprocity to developing countries inAllow less than full reciprocity to developing countries in
making reduction commitments.making reduction commitments.

23. Pakistan’s position after NAMAPakistan’s position after NAMA
NegotiationsNegotiations
Pakistan is fairly comfortably place in this negotiation,Pakistan is fairly comfortably place in this negotiation,
because:because:
a)a) Our tariff rates are relatively lowOur tariff rates are relatively low
b)b) We are hardly giving any subsidyWe are hardly giving any subsidy
c)c) Our reliance on custom revenue has reducedOur reliance on custom revenue has reduced
drastically and constitutes only 15% of our totaldrastically and constitutes only 15% of our total
revenue.revenue.

24. ConclusionsConclusions
 In order to get greater market access, we would like toIn order to get greater market access, we would like to
see:see:
a)a) Tariff reductions by other developing countriesTariff reductions by other developing countries
b)b) Reduction / elimination of peak tariffs in developedReduction / elimination of peak tariffs in developed
countries in products of our export interest; most ofcountries in products of our export interest; most of
their tariffs are otherwise very low.their tariffs are otherwise very low.
c)c) Reduction / elimination of non tariff barriers in allReduction / elimination of non tariff barriers in all
countriescountries