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US, EU agree to reduce import tariffs on successful DDA completion

By Sajid Chaudhry

ISLAMABAD: The United States and the European Union, which are the largest trading partners of Pakistan, have agreed to bring down import tariffs upon the successful completion of Doha Development Agenda (DDA) under World Trade Organisation’s multilateral negotiations.

US will bring its tariff down from existing 11.3 percent to 4 percent and EU from 11.7 percent to 4.7 percent on selected clothing items for Pakistan.

Concessionary import tariff in EU and US would be made available to Pakistan till year 2022. Under the said commitment Pakistan’s 62 percent to 72 percent tariff lines of textile products would be enjoying 6 percent tariff advantage in US and EU and a better market access would be available to Pakistan.

With the elimination of export and domestic subsidies in developed countries, it is projected that around 2 million farmers would be lifted out of poverty.

Export opportunities for Pakistani farming community will increase thus helping them fetch international price for the commodities encouraging them to grow more. Pakistan’s bound tariff rates with WTO on import of agriculture products range between 100 percent to 150 percent and after cut under WTO regime these tariffs would come to 60 percent and 80 percent in next 11 years. Despite reduction in bound import tariffs on agri-products Pakistan would still be able to enhance their import tariff from existing maximum applied tariffs of 35 percent to proposed bound tariffs of 60 percent or 80 percent to protect its farmers from surge in agri-imports.

Pakistan wants the conclusion of Doha round by the end of 2010, Dr Tashfeen Khan, Joint Secretary at WTO Wing, Ministry of Commerce told a media briefing.

He was speaking at the 2-day capacity building programme for economic journalists organised by Pakistan Institute of Trade and Development and Journalists for Democracy and Human Rights.

They informed that 7th WTO Ministerial Conference being held at Geneva, Switzerland during November 30 to December 2 is non-negotiating conference where all players would try to settle the differences on major issues during the sideline meetings. A five-member delegation headed by federal Minister for Commerce would lead the Pakistani delegation in this crucial conference.

Earlier the proposal was that US and Eu would bring their import tariff on clothing within next 10 years, however, due to the successful trade diplomacy by Pakistan, now both have agreed to bring their import tariff down in just five years only for Pakistan, enabling us to achieve good market access for our textile exports.

Pakistan has proposed under Swiss Formula for placing cut on import tariffs with coefficient of 20 percent with 14 percent of tariff lines with half formula cuts. Pakistan’s bound import tariff rate will also be reduced from 55 percent to 14 percent on industrial goods.

However, protection will be available to Pakistan’s textile industry, auto industry and few other industries under flexibilities to available by Non-Agriculture Market Access (NAMA). List of these industries is being finalised by the Ministry of Industries and production in consultation with all stakeholders where cut on bound tariff rate will be reduced by 50 percent under the proposal. Pakistan has also proposed that deeper sectoral cuts should be made mandatory for the developing countries in NAMA negotiations. Pakistan to exclude its 750-tariff line from formula import tariff cut so that protection is made available to its sensitive industries.

They informed that according to a new road map developed for moving negotiation process with fast pace negotiations on Agreement on Agriculture (AOA) and NAMA Agreement.

However, it has been decided that negotiations on Agreement on Trade in Services would also be pursued on similar pace so that interests of developing countries are served better. Pakistan has also sought special safeguard mechanism for tackling surge in services imports. Pakistan is also supporting elimination of subsidies on cotton and fisheries by the developed countries and is in favour of duty free trade of goods to be trade through e-commerce in the world.

Pakistan has managed to get enlist its rice, mango and citrus in tropical products which would provide Pakistan batter export market access in developed countries, the maintained.

Giving an overall impact on Pakistan, they informed that successful completion of Doha round would help gain improved market access in exports of goods and services.

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