Trade Policy Review: Pakistan
The fourth Trade Policy Review of Pakistan has offered us a good opportunity to examine the trade, economic, and investment policies of Pakistan since the last Review in 2008. The large number of questions submitted before the meeting and the number of delegations that posed those questions and intervened during our two days of discussions highlight the importance attached to Pakistan's trade and investment policy and its role in the multilateral trading system. Our discussion was greatly facilitated by the statement from the head of the delegation of Pakistan, Mr Shehzad Arbab, Secretary of the Ministry of Commerce, and by the well-researched and comprehensive comments from the Discussant, the Ambassador of the Kingdom of Saudi Arabia to the WTO, Dr Abdolazeez Al-Otaibi. I would like to note also that Pakistan has answered the questions posed to it before the deadline as well as those that were asked later, and we look forward to answers to any outstanding questions no later than one month after this meeting.
Members noted Pakistan's resilient economy and drew attention to the fact that despite facing a myriad of adverse circumstances and challenges, Pakistan had managed to post positive growth during the review period. It was also highlighted that the economy is expected to expand further in the current year. Members reiterated that more needed to be done with respect to fiscal consolidation as well as overcoming infrastructure shortfalls such as acute power shortages.
Members welcomed the reform agenda that Pakistan had embarked upon under Vision 2025 and the Strategic Trade Policy Framework. Members expressed hope that Pakistan would be able to sustain the reforms undertaken and achieve the goals it had set out for itself and acknowledged the successful democratic transition of power as well as the devolution of power brought about by the 18th constitutional amendment.
Members commended Pakistan's constructive approach to the DDA negotiations and its positive role in the formulation of the Bali Package and on the continuing Post-Bali work programme. Members were also appreciative of the submission of Pakistan's Category "A" commitments under the Trade Facilitation Agreement and welcomed Pakistan becoming an observer to the Government Procurement Agreement as a significant signal of the country's commitment to greater transparency.
Members expressed esteem, that with a view to facilitating trade and investment, Pakistan implemented a number of reforms, including inter alia: further liberalization of the foreign investment regime, development of Special Economic Zones, enhanced competition policy, upgraded port infrastructure, and setting up a national single window.
While welcoming a small reduction in the applied MFN tariff since 2008, several Members voiced concerns with respect to the large difference between applied and bound rates. Similar reservations were also stated regarding the abolition of duty-free tariff lines. A number of Members raised the issue of what they considered to be a high degree of overall tariff protection which favoured import substitution. They also referred to the continued use of ad-hoc trade policy instruments, such as special regulatory orders, which undermined the predictability of the trade regime. Members, in that context, appreciated Pakistan's commitment to phase out tax and trade-related special regulatory orders as highlighted in Pakistan's intervention. Some Members also raised concerns regarding the high degree of protection afforded to the domestic automobile industry.
Concerns were expressed by some Members regarding subsidies provided in various forms. These included subsidies promoting exports, building processing plants, providing selected industries with preferential access to certain utilities and applying mark-up rates for export finance schemes to promote certain products. Certain Members reiterated the need to reduce subsidies, and export prohibitions.
Other issues raised by Members included the support price for wheat, pricing in the pharmaceutical industry, import licensing procedures, safeguard mechanisms, and the high number of anti-dumping investigations. Members noted the ban on the import of bovine products, livestock and poultry and hoped that Pakistan would consider lifting these.
The lack of notifications, particularly those pertaining to agriculture and domestic support was also mentioned.
I would like to once again underline that despite the many challenges faced by Pakistan, the economy has proved to be resilient and several of its policies since the last Review have demonstrated Pakistan's commitment to moving towards more transparency and predictability. I am encouraged by the progress Pakistan continues to make in its pursuit of a more prosperous future. Pakistan has a vast array of natural resources, a strategic geographical position and a large, willing and young labour force. The challenge for Pakistan is to harness this potential through appropriate policies and reforms, including inter alia: improving the business climate, further liberalizing the trade regime and ensuring its predictability, reducing state intervention in the economy, providing adequate infrastructure facilities especially those related to the power sector, and improving the fiscal situation by broadening the tax base. Members have recognized these key challenges and have voiced concerns about some sectors and issues which are important to them. Therefore, I would encourage Pakistan to reflect on the comments and deliberations over the past two days and introduce some of the recommendations into its reform and policy agenda.In closing, I would like to thank Secretary Arbab and the rest of the Pakistani delegation, all the other delegations, the Discussant and the Secretariat for this very successful fourth Review of the trade policies of Pakistan.