GLOBALIZATION Role in World Trade

W.T.O

q Its Role

q Background

–       GATT-1947

–       BREETON WOODS AGREEMENT 1944

–       INTERNATIONAL MONITORY FUND

–       INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT/WB

–       INTERNATIONAL TRADE ORGANIZATION

WTO FRAMEWORK/COMPONENTS

v Promotion of trade by removing obstacles and by creating rules and regulations which are transparent and predictable;

v Establishment of forum for trade negotiations;

v Establishment of an agreed and binding procedure for settlement of trade disputes

WTO AGREEMENTS

q Promoting international trade by

v           Improving the GATT rules for trade in goods;

v           Bringing services under international discipline;

v           Considering the trade-related aspects of Intellectual Property   Rights (TRIPs).

PROMOTING TRADE IN AGRI. AND MANUFACTURED GOODS BY 

v Bringing agricultural products under the new trade rules;

v Bringing trade in textiles and clothing firmly under the new trade rules;

          Controlling technical barriers to trade and other trade-distorting factors

OBJECTIVES

v   Trade without discrimination

v   Access to the market.

v   Promoting fair competition.

FUNCTIONS

v  Administer Trade Agreements, Monitoring, policies, Technical   Assistance and terrify for developing countries.

v  Facilitate implementation, administration          and operation multi and  plurilateral         agreements.

v   Forum for trade negotiation.

v   Settle trade disputes/ greater coherence.

WORLD TRADING SYSTEM UNDER W.T.O. COVERS

Trade in goods GATT	Trade in Services GATS	Intellectual Property Rights TRIPs
Associate Agreements	Agreement Covers	Agreement Covers.
Customs valuation	Business and Professional Services	Patents Copy rights
Pre-shipment Inspection	Communication	Industrial designs
Product standards TBT AOA, SPS	Distribution Service Engineering designs	Geographical indications (P.B. Rights).
Agreements	10 Agreements	Undisclosed information

AGRICULTURE RELATED AGREEMENTS

v The Agreement on Agriculture;

v  The Agreement on the Application of Sanitary and Phytosanitary Measures     (SPS);

v  The Agreement on Technical Barriers to Trade (TBT);

v  The Agreement on Trade Related Aspects of Intellectual Property Rights.

OTHER AGREEMENTS

v Antidumping Laws;

v  Subsidies and Countervailing Measures;

v  Trade Investment Measures;

v  Dispute Settlement Body.

BENEFITS OF WTO

v Increase in World Trade;

v   Fall in Tariff;

v   Restriction in Distorting Trade;

v   Barrier to International Trade in Services;

v   Prosperity in Open, Transparent and Stable Trading System;

v   Governed by Rules

v   Transparency and Accountability;

IMPLICATIONS

v Productivity/Cost of Production;

v   Culture regarding Quality and Standards;

v   Non-grading of Commodities;

v   Poor Packaging;

v   TRIPS Laws;

v   Insufficient Skills;

v   Missing Research Links

Agreement on Agriculture

•         21 Clauses.

•         Market Access

•         Domestic supports

•         Fair competition

•         and Tariff Reduction

•         Product coverage to annexed products.

•         Reduction in export subsidy

UR REDUCTION COMMITMENTS

	Developed countries 6-yrs.	Developing countries 10-yrs
Tarrifs Average to Agri products	36%	24%
Minimum cut per product	15%	15%
Domestic supports Cuts in AMS support for the sector	20%	13%
Export subsidies	31% 21%	24% 14%

SPS MEASURES IN REALTION TO PAKISTAN CONDITIONS

1.     Technical measures such as food qualities can impede trade through technical barriers.

2.     SPS have proposed to ensure safe food for consumers, prevent spread of pests or diseases.

3.      No financial human and technical resources to implement SPS, exclusively implementation cost.

4.     Cost involved include production cost + SPS requirements and conformity cost. Conformity cost include cost of certification and control.

5.     SPS measures higher for Pakistan as Access to technical know how is more restricted. Private service sector that certifies and controls conformity is under-developed.

OBJECTIVES OF SPS AGREEMENT.

•         To protect and improve current human and animal health and phytosanitary situation of all member countries.

•         To protect members from arbitrary or unjustifiable discrimination due to different phytosanitary standards.

Key elements of SPS agreement

Harmonization

 The harmonization of SPS standards acts to reduce trade barriers.

           Pakistan is:

•         encouraged to participate in number of international standard organizations, CODEX ALIMENTARIUS, (OIE) and Inter. Plant Protection Convention

•         Base its SPS on standards and guidelines.

•         Entitled to adopt measures that achieve a higher level of protection.

Equivalence

•         To accept the measures of other members, where they can be demonstrated to be equivalent, and offer the same level of protection.

•         To protect exporting countries from unjustified trade restrictions, even when the products are produced under qualitatively different SPS arrangements.  The rights of importing country to test imported products however, limit the  right of equal treatment.

Assessment of Risk and Determination of Appropriate level of SPS Level of Protection

•         Required to provide scientific evidence when applying SPS that differ from international standards.

•         Evidence to be based risk assessment.

•         Obliged to avoid arbitrary or unjustifiable distinctions in the levels of protection, considered to be appropriate, if the distinctions act to distort trade.

Adaptation to regional conditions.

•         Agreement recognizes that SPS risks do not correspond to national boundaries- there may be areas in the country that have a lower risk than others.

•         Recognizes that pest or disease-free areas may exist, determined by factors such as geography, eco-systems, epidemiological surveillance, and the effectiveness of SPS control.

Transparency

•         Agreement establishes procedures for enhanced transparency in the setting of SPS standards amongst members.

•         Pakistan is obliged to publish and notify the SPS measures.

•         Pakistan is also required to establish an “ Enquiry point-direct point of contact” for any other member regarding any questions about  SPS measures or relevant documents.

Consultation and Dispute Settlements.

•         Agreement establishes detailed and structured procedures for the settlement of disputes between members regarding the legitimacy of SPS measures that distort trade.

•         Takes the form of dispute settlement body consisting of members representatives.

Obligations of the Members Developed Countries.

•         To take account of special needs of developing countries, and in particular LD C’s, in the development of SPS measures.

•         To maintain opportunities for exports from developing countries.

•         To grant developing countries time-limited exemptions from obligations taking into account their financial, trade and development needs.

•         Encourage and facilitate active participation of developing countries in International Organizations.

•         Provide technical assistance to developing countries for the purpose to meet the level of SPS protection required in their export markets.

Factors influencing ability of developing countries to participate effectively in SPS agreement.

•         Insufficient ability to assess implications of developed country  SPS requirements following notification.

•         Insufficient ability to participate effectively in dispute settlement procedures.

•         Insufficient ability to demonstrate that domestic  SPS measures are equivalent to developed country requirements.

•         Insufficient ability to undertake risk assessment of  SPS requirements.

•         Insufficient ability to attend  SPS Committee and international standards organization meetings.

•         Insufficient ability to assess the scientific justification of developed country  SPS requirements.

Problem associated with the manner in which the SPS agreement operates- Developing countries perspective.

•         Developed countries take insufficient account of the needs of developing countries in setting SPS requirements.

•         Insufficient time is allowed between notification and implementation of  SPS requirements.

•         Insufficient technical assistance given to developing countries.

•         Developed countries unwilling to accept developing country  SPS measures as equivalent.

•         Harmonization process takes insufficient account of needs of developing countries.

•         Insufficient information given with notifications of  SPS requirements.

•         Developed countries unwilling to engage in bilateral negotiations with developing countries.