Q: What is the impact of WTO on the trade of Pakistan?

Ans:
The World Trade Organization (WTO) is mandated to deal with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the worlds trading nations and ratified in their parliaments. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. It has 153 members.

Objectives:
The following are objectives of WTO; The WTOs overriding objectives is to help trade flow smoothly, freely, fairly and predictably. It deals with the rules of trade between nations at a global level. It is an organization for liberalizing trade. It is a forum of government to negotiate trade agreements and down trade related disputes between nations.

ROLE OF WTO:
The WTO is playing an important role in administering the new global trade rules in following manners The WTO helps the members nation in solving the trading disputes through its dispute settlement court The 28 agreements included in the Uruguay round are administered through various councils and committees of WTO. The WTO is a management consultant for world trade. Its economist keeps a close watch on the pulse of the global trade. WTO is helping in promoting environment friendly trade. WTO has provided forum to member nations to settle trade disputes through negotiations. The WTO can seek help from IMF and World Bank for greater cooperation in global trade policies.

BEFORE AND AFTER IMPACT OF WTO ON THE TRADE OF PAKISTAN

Pakistan is a member of WTO since its inception in 1995. The opinion is divided over the issue of gains to be achieved from liberalization and deregulation of trade and the role of WTO.It is claimed particularly from the WTO that reduction in tariff and non-tariff barriers will give international trading a new dynasim and vitality. The volume of world trade goes up and there will be significant increase in world income from trade liberalization.

BEFORE WTO
1. Since its last Review, Pakistan has continued to lower its average level of tariff protection. Nonetheless, border protection and domestic support still varies by sector, thus constituting potential impediments to the efficient allocation of resources and Pakistan's sustainable economic development. production pattern has not yet occurred.
2.

Reform in key

sectors has been under way but adjustment toward a more diversified and efficient

Agriculture remains the economys mainstay, despite the decline of its GDP

share from 24.1% to 20.9%; it still accounts for more than four out of ten jobs. .The state-owned Trading Corporation of Pakistan still engages in significant trade of several essential commodities e.g. wheat, sugar, and cotton as a means of providing subsidized foodstuffs to poor households and to cover emergency situations. 3. State regulation (by seemingly independent statutory regulators) of and

participation in the energy sectors remains significant. Petroleum, natural gas (state duopoly), and electricity sales are subject to licences and extensive price controls, but are moving at variable speeds towards more competitive regulatory regimes.
4.

Government intervention in manufacturing remains targeted at protecting

infant industries, through tariffs and domestic support measures, including various tax concessions. Textiles and clothing remains Pakistan's single most important industry; its recent growth has been aided by several assistance packages, including research and development grants tied to exports, and freight subsidies. 5. Financial sector reforms regarding prudential requirements and other areas

have increased the efficiency and soundness of banking and insurance operators. Bank privatization is well advanced, and banking has been transformed into a largely private-based system (unlike life insurance), with substantial foreign presence, even though issuing licences may be subject to reciprocity and equity

limitations; reforms to remove protection for the domestic majority state-owned reinsurance monopolist have been partly reversed.
6.

Shipping and air services are relatively open, except for cabotage and

foreign equity limits on supplying the latter; major ports are being privatized through a "landlord" concessions system. Road transportation remains relatively closed, although recent regional agreements have expanded transit rights; cabotage is banned. Broadcasting is subject to foreign ownership controls.

AFTER WTO
1. In Pakistan both the manufacturing and non-manufacturing sectors of economy are open to foreign direct investment and the foreign investors are provided national treatment. They can have an investment with no limit and then remit all the profits / royalties etc they earn in Pakistan. Regulatory bodies have since been established in most of the sectors i.e. education, information, energy, health, public procurement, telecommunications. These provisions are available for investments in all the four modes of services i.e. cross border supply, consumption abroad, commercial presence abroad, and movement of service providers. 2. The negotiations in WTO on trade facilitation are aiming at increasing transparency, simplifying procedures and improving conditions for transit trade. WTO Committee on Market Access is presently chaired by Pakistan, which is a reflection of its deep involvement in the whole process. 3. Pakistan launched a Custom Computerized System in the year 2002 at Port Qasim, which is qualitatively comparable to any clearing system operating any where in the world. Resultantly, consignment clearance time has drastically reduced from an average of 7 to 10 days to a couple of hours. In addition, the World Bank assisted Project i.e. Trade and Transport Facilitation aims at simplifying the procedures and for adopting an international code in the field of trade and transport. There is another

planned programme i.e. National Trade Corridor Improvement Programme targeting at reducing the cost involved and qualitative improvements in logistics concerning trade 4. Agricultural GDP is split roughly between livestock and crops. Major crops (wheat, cotton, rice, sugar cane, and maize) account for about one third of agricultural GDP, and wheat, cotton, and rice account for about 60% of cultivated land; the main irrigated crops are wheat (staple food crop), cotton, rice, and sugar cane). Cotton, the main crop, is susceptible to climatic conditions and pests. Livestock is dominated by dairy, sheep, and poultry, which has grown substantially. Punjab, Pakistan's second largest province, accounts for two thirds of national agricultural output 5. Absence of Thorough Sub-Sector Specific Assessments of Pakistans Services Trade Remains a Major Constraint in Developing Foresight and in Effectively Participating in Trade Negotiations at the WTO. Government Machinery Is Under Resourced To Cope With The Full Range Of Trade Issues. They Need To Enhance In-House Capacity To Conduct And Evaluate Sub-Sector Assessments So That They Could Provide Timely Support To The Geneva Based Negotiators.

6. At Present, Negotiations Are Under-Way In Respect Of Market Access And Rules Negotiation In The Services Sector As Well. Pakistan Mission At WTO Is Fully Involved And Holds Its Chair Of The Working Party On Gats Rules I.E. An Appreciable Achievement. The Member Countries Are Emphasizing To Create A Good Balance Between Autonomous Structures Of Regulatory Authorities And Having Enforced Needlessly Excessive Regulations In Order To Avoid Creating Inhibitions For Investment Particularly Foreign Investment.
7. A Ten-Year Investment Plan Costing Prs 36 Billion Is Also Being

Implemented To Develop The Agricultural Sector, Including Construction Of Much Needed Dams And Canals. The Share Of Agriculture (Including Forestry And Fishing) In GDP Fell From 24.1% In 2001/02 To 20.9% In 2006/07. The Sector (Including Hunting And Fishing) Remains The Economys Mainstay, Accounting For 43.4% Of The Labour Force In 2006/07 (42.1% In 2001/02). Merchandise Exports.
8. Pakistan, along with other like-minded member countries has formed a

It Contributes Some Two-Thirds Of

group and sponsored a paper to the DSB in order to seek, apart from other concessions (i) mutually agreed solutions (ii) non-acceptance of amicus curiae briefs from NGOs (iii) referral procedure or remand power for Appellate Body to refer back the case for re-examination of facts, to the panel, (iv) in case a developing country lodges a complaint and its position is upheld, the costs involved should be reimbursed by the developed country against whom the complaint was registered. The Pakistan Mission to the WTO is actively pursuing these issues with the DSB, which appear to be commendable effort.