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Regular T&SD News from South AsiaPlease click here to view News updates from 2005 Quota Free Textile Regime: Pakistan-India Eager to See Quotas Expire Pakistan, India, China and Hong Kong are all countries tipped to benefit from the expiration of the ATC at the end of the current year. On November 24, 2004 these countries managed to stall talks at WTO when discussing assistance for smaller textile producing developing countries likely to be affected adversely under the quota free regime. Pakistan, India, China, and Hong Kong opposed a proposal from several developing countries asking the WTO to prepare a detailed review of the impact of the end of the quotas on smaller countries that have built their industry around textiles. Although the debate on the issue will continue at the WTO, Pak-Ind-China-Hong Kong are likely to have it their way soon. Bangladesh Offers Help To Expand Trade With Nepal Bangladesh has offered help to Nepal to expand bilateral trade by opening up 19 entry points between the two countries. Bangladesh has made Banglabandh Land Port operational while it has agreed to allow Nepal to use the Mongla Port facilities at a 50 percent discount and has approved the commencement of Air Services from Kathmandu to Dhaka. Nepal's major export items to Bangladesh are lentils and food grains while Bangladesh's major export items are jute and fertilizers (courtesy: SAWTEE's PROACT Newsletter). Indo-South Korean Deepening Trade Ties Trade relations between India and South Korea have received a boost since the conclusion of an official visit by the South Korean President Roh Moo-Hyun to India in the first week of October. The two countries reviewed economic ties as South Korea is the fifth biggest investor in India after the United States, Mauritius, Britain and Japan. Trade between India and South Korea in the fiscal year ending March 2004 grew at 48 percent to US$ 3.21 billion over the previous year. South Korea has a balance of trade surplus estimated at US$ 1.7 billion. Experts say that considering the complementary industry structures and economic ties, a free trade agreement (FTA) would benefit both countries. The visit also saw South Korean steel giant POSCO proposing to invest US$ 8.4 billion in setting up a steel plant in India with annual output capacity of 10 million tonnes. The investment proposal is the biggest ever by a foreign company in India (courtesy: SAWTEE's PROACT Newsletter). Training Session on Capacity Building: Environment, Trade And Sustainable Development The Integrated Research and Action for Development (IRADe), India recently organized a training session on "Capacity Building: Environment, Trade And Sustainable Development". The training is being supported by UNEP and is based on the "Training Module: Introduction into Capacity Building for Environment, Trade and Sustainable Development"-- also a UNEP developed document. Objectives of the training session were to: 1) Provide participants with an overview of the main approaches, tools, and processes for capacity building for environment, trade and sustainable development 2) Identify elements for inclusion in existing and future capacity building programmes on environment, trade and sustainable development 3) Support participants to better understand the linkages between environment, trade and sustainable development and to capture environment-related development opportunities offered by trade and globalization 4) Support participants in engaging effectively in trade and environment negotiations and implementing multilateral trade and environment agreements.
Common Rules of Origin During the fifth meeting of the Committee of Experts (CoE) on 6-8 October in Dhaka, South Asian trade delegates agreed in principle to evolve common rules of origin (ROO) for South Asian Free Trade Area (SAFTA). The latest announcement of SAFTA having a generalised principle of ROO is a major shift from what members agreed to earlier on - to evolve ROO on product-to-product basis adopting all applicable approaches. SAARC members have also agreed to slash the sensitive lists, which contain commodities that will not be subjected to trade liberalisation programme, substantially from the proposed level of 20 percent of the total tradable items. However, a consensus is yet to be reached on maximum limit for the items to be included in the sensitive list. Nonetheless, the members have upheld the SAFTA accord framework’s commitment to pledge least developed country members - Nepal, Bangladesh, Bhutan and the Maldives - in maintaining relatively longer sensitive lists as compared to developing countries. (source: SAWTEE monthly newsletter) Quota-Free Regime: Analysis on Pakistan and Bangladesh With the quota-free regime set to begin from January 1, 2005, South Asian countries are likely to be impacted differently. India and China are set to gain from the quota-free system, while there have been mixed predictions about Pakistan. Recently textile and clothing exporters in Pakistan have taken issue with the 'sales tax' imposed and later refunded by the government. Delay in refunds and alleged corruption raises the cost of production and causes liquidity problems for exporters. Recently a press analysis has highlighted presence of the 'sales tax' as one of the major factors that might render Pakistani exports uncompetitive in the face of Chinese, and to some extent, Indian competition. Bangladesh, on the other hand, is a country that is likely to lose out in the post-Jan 1, 2005 period. The country currently earns close to 80 percent of its foreign exchange from garment exports, largely due to guaranteed access to its products to the EU and US. The United Nations Development Programme (UNDP) has estimated that around a million garment workers in Bangladesh will be unemployed by 2005; There will also be a significant gender impact as women constitute around 1.2 million of the 1.8 million garment workers in the country (source: SAWTEE monthly newsletter). Pakistan-Norway to Adopt Joint Strategy Pakistan and Norway have recently signed an agreement to adopt a joint strategy in the upcoming ministerial round on Doha Development Agenda to be held in Hong Kong in December 2005. Details of the strategy will be formulated in the coming months.
Pakistan recently echoed the need for a level playing ground under WTO in the United Nations. The concerns raised succinctly present Pakistan's policy stance on these issues. Five major issues were raised. (1) Elimination of unequal subsidies and support together with policy space for developing countries to sustain their rural development in a liberalized trade regime. Cotton was singled out as the test case- which is to be expected given Cotton's importance for Pakistan (2) Elimination of discriminatory tariff peaks and escalation against products of poor countries. (3) Non-circumvention of market access, for example, for textile through such measures as anti-dumping and special safeguards. (5) A development review of the TRIPS and TRIMS Agreements The most interesting aspect of Pakistan's stance was that it specifically raised an issue outside that Doha Round- that of international migration. Pakistan has called for the need of relaxing barriers to migration which affect exporters and importers of labour. An overriding emphasis on migration points to the present government's concern with employment generation, which is being witnessed on in domestic initiatives as well.
Pakistan-US Trade Talks This is to follow up on the earlier TKN info update where I highlighted progress on Pak-US trade talks. The current status of the discussions is:
Delhi Sustainable Development Summit "TERI" a New Delhi based organization hosts the Delhi Sustainable Development Summit annually. The 5th Summit is being held from February 3-5, 2005 in New Delhi. On September 14, 2004, the 12th Raul Prebisch Lecture was delivered by Rubens Ricupero, Secretary General-UNCTAD CUTS-CITEE, one of TKN's South Asia partners has prepared a summary of the speech. It is attached here, for those who are interested.
Workshop on Anti-Dumping Duties Having been at the receiving end of periodic anti-dumping duties for several years, the Pakistan Government is looking to familiarize traders with dumping laws and procedures. The National Tariff Commission, Government of Pakistan organized a one-day workshop on "Anti-Dumping Duties: Law and Procedures" on August 10th in Islamabad. The workshop focused on Pakistan's Antidumping Duties Ordinance (2000) and the rules made thereunder, in relation to the WTO's Antidumping Agreement. The questionnaires used for traders under investigation were explained in detail and information about related laws/rules provided to participants. The workshop reflects enhanced efforts from the Government to avoid further antidumping allegations against Pakistan's key sectors, such as textiles, especially since the incidence of antidumping cases is likely to increase in a quota free regime (post-January 1, 2005).
US-Pakistan FTA Agreement: The US and Pakistan have agreed to sign a Free Trade Agreement (FTA) which will come into effect after materialization of last year's Trade Investment Facilitation Agreement (TIFA). Interestingly, Pakistan is also moving to address one of US' main concerns with regards to trade with Pakistan--the question of intellectual property rights. A bill is soon to be moved through parliament to set up a Pakistan Intellectual Property Rights Organization (PIRPO). This would be a significant step for a country where IPRs have never been a priority issue. Pakistan Making Headway on WTO Related Standardization Certification: Fearing the loss of exports due to lack of standardization certification, Pakistan's Council of Scientific and Industrial Research has recently upgraded and expanded the certification infrastructure in the country. The number of laboratories has increased substantially with the result that analysis capacity for dyes, pigments, pesticides, fertilizers, inorganic chemicals, pollution in air, water, certification for marine resources, pharmaceuticals, and calibration of scientific equipment is believed to be sufficient to meet domestic needs. Given that major Pakistani export sectors like textiles have pre-approved specifications for products (agreed between buyers and sellers), accredited facilities to test are a necessity for exporters. Domestic certification is likely to reduce the cost for exporters substantially. Currently large exporters use international services, while many small ones have been unable to comply.
SAARC Foreign Minister's Meeting Foreign Ministers of SAARC countries are meeting in Pakistan from July 20-21, 2004 in order to review implementation of decisions taken in the 12th SAARC summit. The agenda for the meeting includes poverty alleviation, communications, environment, and energy. The FMs meeting will be preceded by working sessions on standing committees. The agenda for the working sessions include SAFTA, investment, standards, quality control and measurement, cooperation in areas of customs, statistics, and transport, and reviewing SAARC's interaction with donor agencies. World Bank's Trade Related Research The World Bank has recently completed some analytical studies on trade issues relevant to South Asia. The studies are: 1) Tariff Realization Study 2) Implications for Pakistan of Abolishing Textile and Clothing Export Quotas 3) South Asia Free Trade Area (SAFTA): Promise and Pitfalls of Preferential Trade Arrangements All the above were conducted at the request of the Ministry of Commerce, Pakistan and deal with trade policy, export promotion, and WTO compliance issues. The reports can be obtained through the World Bank. World Bank Carbon Finance Business The World Bank is holding a conference on Carbon Finance Business from July 13-15, 2004 in its Islamabad, Pakistan office. The World Bank is interested in climate change's impact on poverty, poverty eradication being its major focus. Carbon finance is the first large scale initiative that seeks to catalyze private sector investments to address this global environmental issue. The Bank is looking to initiate a global carbon market through the purchase of high quality emission reductions in climate-friendly projects in developing countries. For this workshop, government stakeholders, private-sector institutions, development agencies, and the civil society have been invited.
Conference at CUTS, India CUTS-CITEE, India held the mid-term review meeting of their ongoing project, “Achieving Better Market Access” and “International Working Group on the Doha Agenda” in Jaipur, India from June 28- 29, 2004. The ‘ABMA' project intends to look into the issues pertaining to trade and development concerns vis-à-vis the multilateral trading system. The ‘IWOGDA II' project deals with two complex topics: transparency in government procurement and trade facilitation. Both projects aim to provide a platform for networking and research. The objectives are to:
At the meeting experts on the subjects presented and discussed their draft papers. A selected list of draft papers is as follows:
Dialogue Series on TBT/SPS Standards for Exporters in South Asia- The World Bank, Islamabad The World Bank, Islamabad office held a Global Dialogue Series on the Agreements on Technical Barriers to Trade (TBT) and Sanitary and Phyto-Sanitary measures (SPS) under the WTO. The Dialogue series is titled, “Dialogue Series on SPS/TBT Standards for Exporters in South Asian Countries,” and is being held from June 28, 2004 to July 14, 2004. The European Commission is funding this project. The exercise seeks to strengthen capacity building in implementing agreements on TBT and SPS by aiming to sensitize exporters on the need for maintaining standards. Participating countries are India, Pakistan, Sri Lanka, Bangladesh, Afghanistan, Nepal, Bhutan, and Maldives (Via Audio). The main objectives of the dialogue series with South Asia are: (i) for key stakeholders involved in implementing SPS/TBT measures at the policy level to share experiences, knowledge and international best practice, (ii) dissemination and sharing of EC funded India project report, its key findings and recommendations in implementation of SPS measures, (iii) sharing of information and knowledge with South Asian countries on the latest agro-foods standards environment in prospective markets (industrial countries ), (iv) increase links between the implementers of SPS/ TBT measures in South Asian countries and WTO officials and experts engaged in this area, and (v) greater donor consultation and coordination in trying to build developing country capacity for implementing SPS measures. Five sessions, each of them focusing on one particular topic will be conducted. If further funding and consultant time becomes available a website may be created to post the summary of all sessions, information generated as a result of the discussions, post-session follow ups and access to information, creation of a discussion space or an e-mail list, etc. Evaluation of each session and the evaluation feedback will also be posted on the website. For further information, the following email has been provided: |
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