Pakistan and TRIMs Agreement NATIONAL TARIFF COMMISSION

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Pakistan and TRIMs Agreement NATIONAL TARIFF
COMMISSION
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TRIMs Agreement

• One of the Uruguay Round Agreements
• To be signed / accepted by all Members of WTO
• Principle of Single Undertaking / Acceptance

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What is a TRIM

• TRIM not defined in the TRIMs Agreement
• Illustrative list provided in Annex to TRIMs
  Agreement situations where domestic laws or
  regulations require (restrict) an enterprise to
• Purchase or use of products of domestic origin
• Purchase of imports related to local products
  exported
• Export quantum in relation to domestic production

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TRIMs Agreement Obligations

• Members not to apply TRIMs that are inconsistent
  with
• Article III of GATT 1994
• Article XI of GATT 1994

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GATT Articles III and XI

• Article III
• National Treatment requires chiefly that foreign
  goods be treated no worse than domestically
  produced goods regarding internal taxation and
  regulation
• Article XI
• Chiefly concerns Elimination of Quantitative
  Restrictions on Imports

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TRIMs Agreement Obligations

• Notification by Members of
• Existing TRIMs Council for Trade in Goods
• List of publications in which TRIMs found
  GATT/WTO Secretariat
• (principle of transparency)
• Elimination of Notified TRIMs

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Elimination of Notified TRIMs

• Developed countries within 2 years
• Developing countries within 5 years
• Least developed countries within 7 years
• Extension possible on application to Council for
  Trade in Goods
• (of coming into force of WTO agreements)
• Principle of Special and Differential
  Treatment

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Administration of TRIMs Agreement

• Agreement establishes a Committee on TRIMs
• Committee to monitor operation and implementation
  of Agreement
• Committee to report annually to Council for Trade
  in Goods

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Consultation and Dispute Settlement

• Articles XXII and XXIII of GATT 1994 on
  consultations apply, as elaborated by Dispute
  Settlement Understanding

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Built in Agenda

• Council for Trade in Goods to review operation of
  Agreement not later than 5 years of coming into
  force of WTO Agreement
• Review to consider whether Agreement be
  complemented with provisions on investment policy
  and competition policy

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Purpose of Pakistans Deletion Programme

• Development of Industrial capacity
• Facilitate Transfer of Technology
• Promote Linkages between small scale and large
  scale industry
• Moderate balance of payments problems
• (applicable to engineering goods industry,
  including electrical goods and automobiles)

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Assistance provided and condition applied

• Assistance
• Imports at special reduced rates of import tariff
  of specified raw materials, components and parts
• Imports at special reduced rates of import tariff
  of machinery / equipment to manufacture specified
  components and parts
• Condition
• The enterprise to progressively increase use of
  domestically produced components / parts
  according to a given / agreed schedule

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Instruments

• Customs Act 1969
• Provides for lower import tariffs than generally
  applicable
• Sales Tax Act 1990 (up to July 1997)
• Provided for refund of sales tax
• Cabinet Decision setting up an Engineering Board
• Provides for procedure for obtaining concessions

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Procedure

• Engineering Development Board examines
  applications by enterprises and where applicable
  makes recommendations to Central Board of Revenue
• Central Board of Revenue gives concessions under
  Customs Act (and previously under Sales Tax Act
  as well)

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Pakistan compliance with TRIMs Agreement

• Notified WTO of deletion policy on March 30, 1995
• Extension in transition period of 5 years sought
  from Council for Trade in Goods (granted up to
  December 2003)
• List of publications where TRIMs found being
  notified to WTO

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Pakistan compliance with TRIMs Agreement

• Quantitative restrictions completely phased out
• Import tariff peaks sharply reduced
• Number of import tariff slabs or stages
  reduced

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Pakistan compliance with TRIMs Agreement
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Pakistan and the TRIMs Agreements built in
agenda

• Current situation / practice
• Policy on foreign investment
• No restrictions
• National treatment observed
• Legal systems in place
• Competition policy
• Competition law in place
• National treatment observed