Transcript Effect of WTO on our Service & Manufacturing Industries

International Trade and the
WTO
By
WTO Cell
Trade Development Authority of Pakistan
3rd September 2008
International Trade and the
WTO
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WTO – An Introduction
GATT: Negotiations on Agriculture in the WTO
NAMA Negotiations in the WTO
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GATS
TRIPS
Regulatory Framework in Pakistan & NTC
Regionalism
WTO’s Dispute Settlement Mechanism
WTO – An Introduction
By
Abdul Aleem Khan
Economist, Advisory Unit,
WTO Cell, TDAP
WTO – An Introduction
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The World Trade Organization (WTO) is the principal
international organization governing world trade.
It was established in 1995 as a successor institution to
the General Agreement on Tariffs and Trade (GATT)
which was a post-World War II institution.
WTO has 153 member countries, representing 95% of
world trade.
It aims to provide fair and stable conditions for the
conduct of international trade with a view to encouraging
trade and investment that will raise living standards
worldwide.
WTO is a forum where countries continuously negotiate
exchanges of trade concessions to further lower the trade
barriers all over the world.
WTO – An Introduction (cont…. 2)
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Decisions within the WTO are made by member
countries, not by staff and by consensus, not by
formal vote.
High-level policy decisions are made by the
Ministerial Conference, which is a body of political
representatives (trade ministers) which meet at least
every two years.
Operational decisions are made by the General
Council ( representative from each member country)
which meets monthly and chair rotates annually.
WTO – An Introduction (cont…. 3)
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GATT came into force in1948 with 23
founding members.
It was intended to promote nondiscrimination
in trade among countries, with the view that
open trade was crucial for economic stability
and peace.
Different trade rounds were held so as to
liberalize the trade.
GATT and WTO Trade Rounds

1st Round -
Geneva in 1947
23 Countries participated
Decided to cut 45,000 trade tariffs
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2nd Round -
France in 1949
13 Countries participated
Proposed further reductions in 5,000 tariffs
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3rd Round -
Britain in 1950-51
38 Countries participated
Proposed further reductions in 8,700 tariffs

4th Round -
Geneva in 1955-56
26 Countries participated
Proposed to Cut Custom Tariffs with a total value of US$2.5 bn

5th Round -
(Dillion Round) in Geneva in 1960-62
26 Countries participated
Proposed to cut 4,400 tariffs covering US$.9 bn worth of trade

6th Round -
(Kennedy Round) in Geneva in 1964-67
62 Countries participated
Decided on substantial tariffs reductions on all industrial products
covering US$40bn of trade.
GATT and WTO Trade Rounds … Cont… 2

7th Round -
(Tokyo Round) in Geneva in 1973-79
102 countries participated
-Customs cuts averaging 20% to 30% covering US$300 bn
- Improved framework for subsidies, customs rates and
technical obstacles to trade.

8th Round -
(Uruguay Round) started in Uruguay ended in Morroco 1986-94
123 countries participated
The round led to the creation of WTO, and extended the range of trade
negotiations, leading to major reductions in tariffs (about 40%) and
agricultural subsidies, an agreement to allow full access for textiles and
clothing from developing countries, and an extension of intellectual property
rights.

9th Round -
(Doha Round) started - in Doha in 2001 ( at forth Ministerial Conference)
- in Cancun in 2003 (at fifth Ministerial Conference)
- in Hong Kong in 2005 (at sixth Ministerial Conference)
- in Geneva in July 2006 (at seventh Ministerial Conference
Not yet concluded.
141 countries participated,
Subject covered are tariffs, non-tariffs measures, agriculture, labour standards,
environment, competition, investment, transparency, patents etc.
WTO Agreements
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Agreement on Agriculture
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Agreement on Textiles & Clothing (ATC)
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Agreement on Subsidies and Countervailing Measures
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Agreement on Anti-Dumping
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Agreement on Safeguards
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Agreement on Trade Related Investment Measures (TRIMs)
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Agreement on Custom Valuation
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Agreement on Technical Barriers to Trade (TBT) and on Sanitary and Phytosanitary Measures
(SPS)
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Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)
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General Agreement on Trade in Services (GATS)
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Understanding on Dispute Settlement (DSU)
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Special & Differential Treatment ( S& D )
GATT
Negotiations on
Agriculture in the WTO
Presentation by:
Mujeeb Ahmed Khan
Head WTO Cell
Trade Development Authority of Pakistan
Agreement on Agriculture - Objectives
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To establish a fair and market-oriented agriculture
trading system.
To initiate a reform process through negotiation of
commitments on support and protection.
To establish strengthened and operationally effective
rules and disciplines.
To provide for substantial progressive reduction in
support and protection.
To correct and prevent restrictions and distortions in
world agricultural markets.
To achieve specific binding commitments in ;market
access, domestic support and export competition.
Special and Differential treatment for
developing countries
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S & D is an integral element of the negotiations, and
taking into account the possible negative effect of the
implementation of the reform programme on leastdeveloped and net food-importing developing countries.
While implementing their commitments the developed
countries to take fully into account the particular needs
and conditions of developing countries.
Greater market access for agriculture products of
particular interest to developing countries.
Fullest liberalization of trade in tropical products and
products of importance to the diversification of
production from the growing of illicit narcotic crops.
Reduction commitments in the Uruguay
Round
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Market Access
Average tariff cuts for all ag.products
Minimum tariff cuts per product
Developed
Developing
(1995-2000)(1995-2004)
-36%
-15%
-24%
-10%
Domestic Support
Total cuts in aggregate measurement of
support
-20%
-13%
Export Subsidies
Value cut
Volume Cut
-24%
-14%
-36%
-21%
Domestic Support
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Green Box - Research, Extension, PDS,Decoupled
payments etc.
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Blue Box - Production Limiting Subsidies ;
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Amber Box - AMS-subject to reduction commitments;
- Product specific (MSP)
- Non product specific (input subsidies; fertilizers, power,
irrigation etc
Domestic Support (contd)
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De minimis support;
Allowed WTO Members to exempt from the calculation
of the AMS, below a certain threshold level;
- Developed countries: 5% of the value of agricultural
production of the product concerned and 5% of total
value of agricultural production.
- Developing countries: 10% of the value…………..
The Doha Mandate for negotiations
“We commit ourselves to comprehensive negotiations
aimed at:
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Substantial improvement in MARKET ACCESS;
Reductions of, with a view to phasing out, all forms of
EXPORT SUBSIDIES;
Substantial reductions in trade distorting DOMESTIC
SUPPORT.
Negotiating priorities for Pakistan
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Highest possible tariff reductions. (even U.S proposal for
55%-90% for developed and slightly less for developing)
Maximum tariff caps.(75% for developed and 100% for
developing)
Expansion of tariff rate quotas. (from the current 5% to
20% of domestic consumption, with and end-date
agreed for their eventual elimination)
Negotiating priorities for Pakistan (contd)
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The TRQ in-quota tariffs should be eliminated where
substantial under fill exists.
Sensitive products must be limited to maximum of 1% 2% of all tariff lines.
Special products must be limited to 2% - 3% of all tariff
lines.
A Special Safeguard Mechanism, with strict and
transparent guidelines.
Negotiating priorities for Pakistan (contd)
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Elimination of Tariff escalation through the use of
progressively higher tariff reductions for more processed
products.
Most restrictive overall level of support. (minimally
acceptable position is the G-20 proposal of 80%
reduction for EU and 70% for the U.S).
Product specific caps for the Amber Box and the Blue
Box.
Negotiating priorities for Pakistan (contd)
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Capping of the Blue box at 2.5% of the value of
production.
Commitment to review the Green and Blue box criteria
to ensure that these programs are truly non-trade
distorting and production limiting.
Possibility of a cap on Green Box expenditures.
Elimination of all forms of export subsidies, including
subsidy elements of export credits, state trading and
food aid.
NAMA Negotiations
in the WTO
By
Tippu Sultan
Head Advisory Unit, WTO Cell
TDAP
WTO NAMA Negotiations : (Non Agriculture Market Access)
Challenges and opportunities for Pakistan
The Doha Ministerial Declaration requires that negotiations
should aim by modalities to be agreed upon to
a)
Reduce or eliminate tariffs
b)
Reduce or eliminate tariff peaks
c)
Reduce or eliminate non tariff barriers
d)
Not exclude any products
e)
Allow less than full reciprocity to developing countries in
making reduction commitments.
NAMA Tariff Cut formulas
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The United States (US) has proposed to use simple Swiss formula with a
negotiated coefficient.
The US elaborated that there could be two coefficients, one separately
applied by developing countries and another applied by developed
countries.
The Simple Swiss formula is expressed as follows:
Final tariff
= Coefficient (a) x Initial tariff
Coefficient (a) + Initial tariff
Where the:
Initial tariff is the bond rate, as listed in national schedules, and
Coefficient is a figure to be negotiated
Different Proposals
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EU and US proposal:
In 6th Ministerial Conference at Hong Kong, the EU and US proposed using
coefficient of a = 10 for developed countries and a coefficient of a = 15 for
developing countries.
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THE ABI formula:
The second proposal has been presented by Argentina, Brazil and India, modified
Swiss-type formula, which incorporates national tariff averages into the formula
reducing the impact of the coefficient and establishing a linkage between tariff
reductions and a country’s current tariff levels. It is expressed as follows:
Final tariff
Where the:
= (Coefficient x National average of bond rates) x Initial tariff
(Coefficient x National average of bond rates) + Initial tariff
Initial tariff is the bond rate, as listed in national schedules, and
Coefficient is a figure to be negotiated
National average of bond rates is calculated using all non-agricultural bond duties
Different Proposals …. Cont…
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Coefficient proposed by Pakistan:
At the mini-ministerial meeting held in China,
Pakistan put forward a proposal to bridge the
difference between the supporters of the Simple
Swiss formula and the supporters of the ABI formula.
The coefficients proposed by Pakistan would be
around a = 6 for developed countries and around
a = 30 for developing countries
Pakistan’s position after NAMA
Negotiations
Pakistan is fairly comfortably place in this negotiation,
because:
a)
Our tariff rates are relatively low
b)
We are hardly giving any subsidy
c)
Our reliance on custom revenue has reduced
drastically and constitutes only 15% of our total
revenue.
Conclusions

a)
b)
c)
In order to get greater market access, we would like to
see:
Tariff reductions by other developing countries
Reduction / elimination of peak tariffs in developed
countries in products of our export interest; most of
their tariffs are otherwise very low.
Reduction / elimination of non tariff barriers in all
countries
GATS
Presentation by:
Mujeeb Ahmed Khan
Head WTO Cell
Trade Development Authority of Pakistan
General Agreement on Trade in
Services (GATS)
The Service Agreement rests on three pillars.
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The first is the framework Agreements containing the
basic obligations which apply to all members.
The second concerns national schedules of
commitments.
The third is a number of measures addressing the
special situations of individual services sectors.
WTO classification of Services Sectors
The four modes:
Mode I: cross-border -- when a Pakistani firm delivers to
an overseas customer without leaving home. Some
examples of this mode are internet, telecom, financial
services etc.
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Mode II: consumption abroad -- when a foreign consumer
is in the Pakistani market and receives or uses a service.
Examples of this mode include tourism, education,
machinery sent for repairs etc.
WTO Classification – (contd)
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Mode III: Commercial presence -- when the Pakistani
firm establishes an office abroad; Illustrations of ModeIII are branches set up by banks and Hotel chains etc.
Mode IV: movement of natural persons -- when
Pakistani service employees travel to another country to
provide a service. Examples of this mode are Doctors,
engineers, skilled or semi skilled laborers etc.
Commitments on services in the WTO
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Each member will submit schedules of commitments
pertaining to different services sectors on each of the four
modes.
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These schedules will then be negotiated in a request and offer
format resulting in submission of revised schedules.
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11 sectors were approved by the ECC for the proposal
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Pakistan has submitted its initial offer on 9 services sectors
including 68 sub-sectors (on 24th May 2005).
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ECC approved Sectors:
(Marked Red were not in the initial offer)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Business Services
Communication Services
Construction and related engineering Services
Distribution services
Educational services
Environmental services
Financial services
Health and related social services
Tourism and travel related services
Recreational, cultural and sporting services
Transport services
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i.
ii.
iii.
SALIENT FEATURES OF ECC APPROVED OFFER:
‘Commercial presence' - subject to incorporation in
Pakistan with maximum foreign equity
participation of 70% is inscribed against a
particular sector or subsector.
Establishments to be located in Export processing
zones may negotiate higher than 70 percent limits on
foreign investment .
Profits of foreign-invested companies will be fully
repatriable except as provided in specific sector
commitments.
SALIENT FEATURES OF ECC APPROVED
OFFER (contd)
iv.
v.
vi.
No legal restriction on acquisition of real estate by
foreign-invested judicial entities or natural persons.
Subsidies, if any, will be granted to domestic
companies only.
Movement of natural persons - Unbound, except
for measures concerning the entry or temporary
stay of natural persons falling in specified
categories. E.g.Intracorporate transferees,
Business visitors, Independent Professionals etc...
SALIENT FEATURES OF ECC APPROVED OFFER
(contd)
vii. The commitments relating to ‘Professional services’
apply only to countries that provide similar commitments
to Pakistan except natural persons qualified in the United
Kingdom and the USA.
viii. In specific sectors; Access granted both to natural
persons and companies based on economic needs test.
Criteria include rate of growth of the services sector
recorded by the national accounts in the previous 5
years.
Pakistan’s offer
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i.
ii.
SALIENT FEATURES OF INITIAL OFFERS:
‘Commercial presence' - subject to incorporation in
Pakistan with maximum foreign equity participation
of 60% is inscribed against a particular sector or
subsector. In certain sub sectors e.g. Engineering
services it is 51%.
In specific sectors; Access granted both to natural
persons and companies based on economic needs
test.
SALIENT FEATURES OF INITIAL OFFERS (contd)
iii. ‘Presence of natural persons’ – in certain sub sectors
there are conditions that qualifications for foreign service
suppliers will be set by the concerned Pakistani
Association/Council and any other relevant law in force.
iv. ‘Commercial presence’ – in certain sub sectors there are
conditions of Economic needs test e.g. wholesale trade
services, Franchising etc.
v. The commitments in Financial Services are given to the
nationals and financial institutions of the Members
whose laws and policies do not bar the provision of
similar commitments to the Pakistani nationals and
financial institutions.
Pakistan’s offer
SALIENT FEATURES OF PROPOSED REVISED OFFER:
i.
ii.
As per the ECC mandate all 11 sectors and 86 subsectors covered.
Commercial presence' - subject to incorporation in
Pakistan with maximum foreign equity participation
of 70% is inscribed against a particular sector or sub
sector. (ECC mandate)
SALIENT FEATURES OF PROPOSED REVISED
OFFER (contd)
iii.
iv.
No limitations on Market Access or National treatment
in Cross border supply (mode I) and Consumption
abroad (mode II) except for Financial Sector and its
sub sectors.
Movement of natural persons - Unbound, except for
measures concerning the entry or temporary stay of
natural persons falling in specified categories.
E.g.Intracorporate transferees, Business visitors,
Independent Professionals etc...
SALIENT FEATURES OF PROPOSED
REVISED OFFER (contd)
v. No commitments contingent upon reciprocity by
other countries. (ECC plus)
vi. No requirement of Economic Need Test for granting
Market Access or National Treatment. (ECC plus)
vii.Presence of natural persons’ – in certain sub sectors
there are conditions that qualifications for foreign
service suppliers will be set by the concerned
Pakistani Association/Council and any other relevant
law in force.
(Initial offer)
Pakistan’s View in Service Sector
Pakistan believes that the liberalization in Services
sector is in our own interest, as it will enhance the
efficiency of local service suppliers through
competition and introduction of new techniques
apart from improving the quality of manufactured
goods, since the service are also inputs for
manufacturing.
Pakistan is presently consulting various Domestic
stakeholders before a final offer is made.
Trade Related Intellectual Property Right
TRIPS
Presentation by:
Mujeeb Ahmed Khan
Head WTO Cell
Trade Development Authority of Pakistan
TRIPS
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TRIPs included in the single undertaking of the UR
It establishes minimum standards for all types of
IPRs (but utility models and breeders’ rights)
It is based on and supplements, with additional
obligations, the Paris, Berne, Rome and Washington
Conventions
It extends to IPRs the principles governing
international trade: MFN, NT
It contains provisions relating to enforcement of
IPRs, amendment and reservation
TRIPS (cont…2)
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TRIPS requires member states to provide strong
protection for intellectual property rights. For
example, under TRIPS:
Copyright terms must extend to 50 years after
the death of the author, although films and
photographs are only required to have fixed 50
and to be at least 25 year terms,
respectively.(Art. 7(2),(4)).
Copyright must be granted automatically, and
not based upon any "formality", such as
registrations or systems of renewal.
TRIPS (cont…3)
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Computer programs must be regarded as
"literary works" under copyright law and receive
the same terms of protection.
National exceptions to copyright (such as "fair
use" in the United States) are constrained by the
Berne three-step test .
Patents must be granted in all "fields of
technology," although exceptions for certain
public interests are allowed (Art. 27.2 and 27.3
[1]) and must be enforceable for at least 20
years (Art 33).
TRIPS (cont…4)
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Exceptions to the exclusive rights must be limited,
provided that a normal exploitation of the work (Art. 13)
and normal exploitation of the patent (Art 30) is not in
conflict.
No unreasonably prejudice to the legitimate interests of
the right holders of computer programs and patents is
allowed.
Legitimate interests of third parties have to be taken into
account by patent rights (Art 30).
In each state, intellectual property laws may not offer
any benefits to local citizens which are not available to
citizens of other TRIPs signatories by the principles of
national treatment (with certain limited exceptions,
Art. 3 and 5 [2]). TRIPS also has a most favored nation
clause.
TRIPS (cont…5)
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Many of the TRIPS provisions on copyright were
imported from the Berne Convention for the Protection
of Literary and Artistic Works and many of its trademark
and patent provisions were imported from the Paris
Convention for the Protection of Industrial Property.
IPRs addressed under TRIPs
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Copyrights.
Patents.
Trade Marks.
Industrial Designs.
Layout designs of Integrated circuits.
Geographical Indications.
Traditional Knowledge and Folklore
Regulatory Framework
in Pakistan and NTC
Tippu Sultan
Head Advisory Unit, WTO Cell
TDAP
Regulatory Framework in
Pakistan
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Ministry of Commerce is responsible for
negotiating and representing Pakistan at
multilateral negotiations.
MOC takes its position after consultation
with all ministries, divisions, associations
and chambers.
National Tariff Commission
Established in 1990 under the
National Tariff Commission Act, 1990
Function
Implementation of Trade Defense Laws
Functions of the Commission
The Commission is the implementing body for two WTO
agreements, namely, Agreement on Subsidies & CVDs, and
Agreement on Safeguards.
Pakistan’s Trade Defence Laws:
Anti-Dumping Duties Ordinance, 2000
Countervailing Duties Ordinance, 2001
Safeguards Measures Ordinance, 2002
Implementation of Trade Defense Laws
Anti-Dumping Duties Ordinance, 2000
Mandate
Imposition of anti-dumping measures after due process
Procedure
Application
processing,
preliminary
investigation,
preliminary determination, final investigation, final
determination, imposition of anti-dumping measures.
The anti-dumping duty is imposed for a period of 5 years.
Time frame: 365 days
TRANSPARENCY
Commission maintains a Public File in each investigation, which
contains all documents (non-confidential) including application,
notices, reports, comments and correspondence with interested parties
and other related documents.
The public file is open for inspection and copying to all interested
parties.
The public file is usually inspected by domestic industry, foreign
missions, foreign exporters and producers, lawyers etc.
TRANSPARENCY
Throughout the investigation, the Commission keeps all interested
parties including the governments of exporting countries informed of the
developments in an investigation.
In addition, the following documents are available on the Commission’s
website and are, therefore, in the public domain:
Notice of Initiation
Notice of Preliminary Determination
Report on Preliminary Determination
Notice of Final Determination
Report on Final Determination
Commission’s website: www.ntc.gov.pk
Implementation of Trade Defense Laws
Anti-Dumping Actions Taken by Pakistan
Initiation
Date
Preliminary
Determination
Final Determination
Anti-Dumping Duties
Thailand
Korea, Indonesia
09.08.2006
0% to 8.33%
09.02.2007
0% to 10.26%
07.06.2007
Tiles
China
27.03.2006
0% to 21.02%
30.11.2006
14.85% to 23.65%
30-03-2007
Tinplate
UK, USA, Italy,
Germany and
France
06.12.2005
Terminated
03.06.2006
Formic Acid
Finland and
Germany
08.09.2005
16.49% and 6.16%
09.03.2006
13.63% and 6.25 %
07-07-2006
Pthalic Anhydride
India
11.08.2005
10.94%
13.02.2006
10.94%
26-05-2006
12.05.2005
0% to 36.56%
12.11.2005
0% to 29.68%
17-03-2006
Product
Exporters from
Polyester Staple
Fibre
Indonesia, Korea,
*Polyester Filament
Malaysia, and
Yarn
Thailand
Anti-dumping duties imposed after final determination remain in force for a period of five years.
*15 Price undertakings have been accepted from the exporters and are being monitored
Implementation of Trade Defense Laws
Anti-Dumping Actions Taken by Pakistan
Product
Exporters from
UFMC
China
Initiation
Date
12-01-2005
Preliminary
Determination
4.31% to 14.89%
18-07-2005
Final Determination
3.43% to 11.58%
25-6-2004
31.06%
40.18%
26-10-2004
19-11-2005
31.06%
40.18%
24-02-2005
16-3-2004
12.71%
13-08-2004
12.71%
10-12-2004
Glacial Acetic Acid Taiwan
1-9-2003
13.77%
25-2-2004
13.77%
18-6-2004
Sorbitol 70%
Solution
France
Indonesia
6-3-2003
96.50% & 91.12%
19-7-2003
96.50% & 22.26%
19-11-2003
Tinplate
South Africa
26-2-2002
23.91%
22-7-2002
27.33%
26-11-2002
PVC Resin
Iran
Korea
Acrylic Tow
Uzbekistan
Implementation of Trade Defense Laws
Reviews of Anti-dumping Measures
Product
Exporters from
Sorbitol 70% Solution
Indonesia
Tinplate
South Africa
Tiles
China
Initiation
Date
Status
25-07-2007
(Changed
Circumstances)
Terminated on
02-02-2008
07-07-2007
(Sunset)
Under Process
Request Received
(Newcomer)
Under Process
Implementation of Trade Defense Laws
APPEAL AGAINST THE COMMISSION’S DECISION
Appellate Tribunal (Pakistan)
Any interested party can file an appeal against a final
determination made by the Commission
Dispute Settlement Body (Geneva)
The government of exporting country may approach the
DSB to challenge the inconsistencies of a measure with
the WTO Agreements
Implementation of Trade Defense Laws
Countervailing Duties Ordinance, 2001
Mandate
Imposition of countervailing measures after due process
Procedure
Application processing, preliminary investigation, preliminary
determination final investigation, final determination, imposition of
Countervailing measures.
The countervailing duty is imposed for a period of 5 years.
Time frame: 365 days.
Implementation of Trade Defense Laws
Safeguard Measures Ordinance, 2002
Mandate
Safeguard Measures against surge of imports.
Procedure
Application processing, investigation, determination and making
recommendations to the Government.
Recommendations
NTC sends recommendations on safeguard measures to the Federal
Govt. for consideration.
Safeguard Measures are imposed for a period of 4 years.
Time Frame: 120 days.
Implementation of Trade Defense Laws
Safeguard Investigation by Pakistan
Product
Date of Initiation
Determination
Footwear
17-06-2005
Investigation
Terminated
Assisting Exporters Facing Trade Defense Actions
Assisting Pakistani exporters facing foreign
actions under WTO Trade Defense
Agreements.
NTC assisted Pakistani exporters of Ethyl
Alcohol, Pet Resin and Match Boxes.
Assisting Exporters Facing Trade Defense
Actions
The Commission has been assisting the exporters from Pakistan
facing anti-dumping actions by other WTO Member countries,
mainly in the following:
• Response to the questionnaires
• Accounting details
• Procedural compliance
• DSB proceedings
REGIONALISM
By
Aamir Hussain Siddiqui
Economist, Research & Information Unit,
WTO Cell, TDAP
WTO Provisions for
Regionalism


Article XXIV of GATT 1994:
Para 4 of the Doha Declaration: We stress
our commitment to the WTO as the unique
forum for global trade rule-making and
liberalization, while also recognizing that
regional trade agreements can play an
important role in promoting the liberalization
and expansion of trade and in fostering
development.
Global tendency of RTAs

Some 380 RTAs have been notified to
the GATT/WTO up to July 2007. Of
these, 300 RTAs were notified under
Article XXIV of the GATT 1947 or GATT
1994; 22 under the Enabling Clause;
and 58 under Article V of the GATS. At
that same date, 205 agreements were
in force.


If we take into account RTAs which are in
force but have not been notified, those
signed but not yet in force, those currently
being negotiated, and those in the proposal
stage, we arrive at a figure of close to 400
RTAs which are scheduled to be implemented
by 2010.
Of these RTAs, free trade agreements (FTAs)
and partial scope agreements account for
over 90%, while customs unions account for
less than 10 %.
World major RTAs
European Union (EU) – Custom Union
North America Free Trade Area (NAFTA)
ASEAN Free Trade Area (AFTA)
Gulf Cooperation Council (GCC) – Custom Union
MERCOSUR (South American Common Market) – Custom
Union
Pakistan’s position

Pakistan has signed following Trade
Agreements
a. SAFTA (RTA)
b. FTAs with
(1) Sri Lanka
(2) China
(3) Malaysia
c. PTAs with
(1) Mauritius
(2) Iran
South Asian
Cooperation



Association
for
Regional
The South Asian Association for Regional Cooperation
(SAARC) was established when its Charter was formally
adopted on December 8, 1985 by the Heads of State or
Government of Bangladesh, Bhutan, India, Maldives,
Nepal, Pakistan and Sri Lanka.
SAARC provides a platform for the peoples of South Asia
to work together in a spirit of friendship, trust and
understanding. It aims to accelerate the process of
economic and social development in Member States.
SAFTA is an economic agreement for free trade among
member states.
South Asian Free Trade Area
(SAFTA)
Article-7 of the Agreement contains modalities of tariff reduction under TLP,
which are as follows:No tariff reduction on items in the Sensitive List.
Non-LDCs (Pakistan, India, Sri Lanka) shall reduce tariff to 0-5% for LDCs
(Bangladesh, Bhutan, Nepal, Maldives) within three years (2009)
Tariff Reduction by Non-LDCs for Non-LDCs
Reduction in two phases:
Phase-I (2006-2008)
Existing tariff rates above 20% to be reduced to 20% within two years
Tariff below 20% to be reduced on margin of preference basis of 10%
per year.
Phase-II (2008-2013)
Tariff to be reduced to 0-5% within 5 years.
Tariff Reduction by LDCs for all SAARC Members
Reduction in two phases:
Phase-I (2006-2008)
Existing tariff rates above 30% to be reduced to 30% within two years
Tariff below 30% to be reduced on margin of preference basis of 5%
per year.
Phase-II (2008-2016)
Tariff to be reduced to 0-5% within 8 years.
Sensitive List
Countries
Bangladesh
Bhutan
India
Maldives
Nepal
Pakistan
Sri Lanka
No. of tariff lines % of total lines
1254
157
884
671
1310
1183
1065
24
3
16.9
12.8
25.5
22.6
20.3
SAFTA Rules of Origin


Annex IV deals with the rules of origin under
the SAFTA required to qualify products for
preferential duty benefits. Rules of Origin – to
be operative on 01.07.2006. Basic Criteria is as
under:
For non-LDCs
40% value addition + change in tariff heading at
4 digits (CTH).
For LDCs
30% value addition + CTH.
Pak-Sri Lanka Free Trade Agreement
Salient Features
• Came into force from June 2005.
• Establishment of a Free Trade Area through complete
or phased elimination of tariffs.
• The FTA does not remove all tariffs on all goods at
once.
• Negative Lists to protect national interests of both
countries.
• The Rules of Origin (ROO) criteria to ensure a
minimum local content.
• Adequate safety clauses to protect domestic and
national interests of both countries.
• Review and consultation mechanisms to ensure the
smooth operation of the Agreement.
Pakistan Commitments
From the date of entry into force Pakistan has granted 100%
immediate tariff concessions on 206 items. In addition Sri Lanka
can export up to 10,000 MT of tea per financial year free of duty.
Pakistan has also granted 35% of margin of preference on applied
(MFN1) tariff rate to exports of beetle leaves from Sri Lanka.
Apparel exports from Sri Lanka (21 categories) are also granted
35% margin of preference on applied (MFN) tariff rate up to 3
million pieces. Ceramic exports from Sri Lanka to Pakistan are
given a margin of preference of 20% on applied (MFN) tariff rate.
There is no limit on the quantity of exports. About 10% of tariff
lines at 6-digit level (i.e. 540 items) are included in the negative
list of Pakistan. These consist of very sensitive items where
Pakistan is not in a position to offer any preferential treatment to
Sri Lanka.
All other items that are not included in the negative list and
immediate concession list are subject to a tariff phase out and
would have duty free access to Pakistan by 2008.
Sri Lanka Commitments



From the date of entry into force Sri Lanka has
granted immediate duty free access to Pakistan for
102 products. In addition, Sri Lanka has allowed
Pakistan to export Long Grained Pakistan Rice
(Basmathi) up to 6000 MT per year and potatoes up
to 1000 MT during the off season (i.e. June-July &
Oct-Nov) free of duty.
The negative list of Sri Lanka has about 13% of tariff
lines at 6-digit level (697 items) where the country
would not give any preferential concessions to
Pakistan.
All other items, which are not included in the
immediate 100% concession list and the negative list,
are subject to a duty phase out and would be made
duty free by 2010.
Pak-China FTA


Pak China Free Trade Agreement was concluded on July 1,
2007. The FTA covers overall 14353 products at 8-digit
level of H.S. Code including 7550 under tariff reduction
modality provided by China and 6803 under Tariff reduction
modality of Pakistan.
Pak- China FTA comprises two phases, providing
elimination and reduction of tariffs within the time frame as
provided under the agreement. The base year for tariff
reduction/elimination is 2006 for China while the base year
for tariff reduction/ elimination is the fiscal year of 20062007 for Pakistan. It is worth mentioning here that the
elimination of tariff on the products covered in the Early
Harvest Program (EHP) shall continue in accordance with
the earlier agreed modality of tariff elimination for EHP.
Tariff Reduction
(Phase-I)
Modality
of
China
Category
No.
Track
No. of Tariff
Lines
% of Tariff
lines at 8 digit
I
Elimination of tariff (Three years)
2681
35.5%
II
0-5% ( five years )
2604
34.5%
III
Reduction on Margin of Preference
of 50%( five years )
604
8%
IV
Reduction on Margin of Preference
from 20%( five years)
529
7%
V
No Concession
1132
15%
Total
7550
Tariff Reduction
(Phase-I)
Category
No.
Modality
Track
of
No. of Tariff
Lines
Pakistan
% of Tariff
lines at 8 digit
I
Elimination of tariff (Three years)
2423
35.6
II
0-5% ( five years )
1338
19.9
III
Reduction on Margin of Preference of
50%( five years )
157
2.0
IV
Reduction on Margin of Preference from 1768
20%( five years)
26.1
V
No Concession
1025
15.0
VI
Exclusion
92
1.4
TOTAL
9803
Phase II: Both Parties shall endeavor to eliminate the tariffs of
no less than 90% of products, both in terms of tariff lines and
trade volume within a reasonable period of time on the basis of
friendly consultation and accommodation of the concerns of both
Parties.
Malaysia-Pakistan
Closer
Economic
Partnership Agreement (MPCEPA)




This Agreement is the 1st bilateral FTA between two Muslim Countries members of OIC. This Agreement is Pakistan’s first comprehensive FTA
incorporating trade in goods, trade in services, investment and Economic Cooperation and Malaysia’s first bilateral FTA with any south Asian country.
For trade in Goods Pakistan will eliminate tariff on 43.2% of the current
imports from Malaysia by 2012. On the other hand Malaysia will eliminate
tariff on 78% of imports from Pakistan.
In trade in services, both countries have provided WTO plus market
accesses to each other. In the field of computer and I.T related services,
Islamic Banking, Islamic Insurance (Takaful) Pakistan has secured 100%
equity in Malaysia. Market access in services provided by both countries will
impact positively on investment and trade in goods. Mutual recognition
arrangements are also apart of the FTA.
The Agreement also contains a chapter on investment to facilitate
entrepreneurs of both countries. The incentives available to both countries
will not be available to investors from other countries and the bilateral
investment treaty signed by Pakistan will have no impact on the investment
provisions under the FTA.
Tariff Reduction Modality by Malaysia
Category
No. of Items
Duty Dates for duties
Fast Track
6699
0%
1-1-2009
Normal Track
1215
0%
1-1-2012
Sensitive Track-1
224
5%
1-1-2011
Sensitive Track-2
616
10% 1-1-2014
Sensitive Track-3
1271
20% 1-1-2011
450 items are in Highly Sensitive List, where no concession is given
16 items are in Tariff Rate Quota List
102 items are in Exclusion List
Tariff Reduction Modality by Pakistan
Category
No. of Items
Duty Dates for duties
Fast Track
1703
0%
1-1-2009
Normal Track
1206
0%
1-1-2012
Sensitive Track-1
796
5%
1-1-2011
Sensitive Track-2
593
10% 1-1-2014
Sensitive Track-3
1423
20% 1-1-2011
765 items are in Highly Sensitive List, where no concession is given
129 items are in Margin of Preference -1, on which 5%, 10%, 15% and
20% MOP would given in 2008, 2009, 2010 and 2011, respectively
9 items related to Palm nut and oil, are in Margin of Preference -2,
where MOP would be given 10% in 2008 and 2009 and 15% in 2010.
179 items are in Exclusion List
Pak – Iran PTA
Pakistan
signed
Preferential
Trade
Agreement with Islamic Republic of Iran
on 4th March 2004. The Cabinet ratified
the agreement on 25th May 2005. As
mutually agreed the agreement has
become operational from 1st September
2006.
Preferences granted by both countries to
each other cover approximately 18% of
MFN tariff of both countries.
Preferences given by Iran to
Pakistan
Total 309 Items
Main items are Textile and Clothing (125 items),
Chemicals, Marble & Granite, Fish, Bananas,
Mangoes and Citrus fruits, Pharmaceutical,
Plastics, Rubber & Articles, Footwear, Cutleries,
Refrigerators, Electric Motors, Brushes, Pens,
Pencils & Markers, etc.
Margin of Preference is between 10 to 30 percent,
except Rice, which is given TRQ status, but
Commercial benefit is about 96%.
Preference given by Pakistan to
Iran
Total 475 items
Major items, are animal products, vegetables, fruits, tea &
spices, oilseeds, animal of vegetable oils, confectionary,
salts and minerals, fuels Petroleum and LPG etc.
Organic & Inorganic Chemicals, Pharmaceuticals,
Fertilizers, Chemicals, Textile & Clothing materials,
Articles Stones, Glass & Glassware, Pig iron and Ferrous
alloy, Copper and Industrial Machines etc.
Margin of Preference is between 10 to 30 percent,
Organic and Inorganic, Ores and other are given
highest MOP of 30%
Pak – Mauritius PTA
Pakistan
signed
Preferential
Trade
Agreement with Republic of Mauritius on
30th July 2007. As mutually agreed the
agreement has become operational from
1st December 2007.
Preference granted by Mauritius
Total 101 items
Major items are Vegetables and Fruites,
Rice, Biscuits, Tobacco, Marble & Granites,
Articles of Wood, Carpets, Textile Madeups, etc.
Margin of Preference would become 100%
one year.
Preference granted by Pakistan
Total 66 items
All are related to Garments (Chapter 61:
Knitted garments and Chapter 62: Woven
Garments)
Margin of Preference is between 30 to 50%
Most of the items are subject TRQs.
ECO Trade Agreement
Economic Cooperation Organization (ECO), is an intergovernmental
regional organization established in 1985 by Iran, Pakistan and
Turkey for the purpose of promoting economic, technical and
cultural cooperation among the Member States. In 1992, the
Organization was expanded to include seven new members,
namely: Afghanistan, Azerbaijan, Kazakhstan, Kyrgyz Republic,
Tajikistan, Turkmenistan and Uzbekistan.
The Organization has a permanent Secretariat in Tehran Iran headed
by a Secretary General. Mr. Khursheed Anwar, from Pakistan is the
current Secretary General of ECO Secretariat.
ECO Trade Agreement was approved in 2005 in Turkey and need
ratification by member governments after which it will become
operational.
Dispute Settlement
Mechanism (DSM) of the
WTO
By
Abdul Aleem khan
Economist, Advisory Unit,
WTO Cell, TDAP
Introduction to the DSU

What is WTO’s DSS & DSU

Need for a DSU

Principles: equitable, fast, effective, mutually
acceptable

How are disputes settled?

The case has been decided: what next?
What is WTO’s DSU

WTO’s DSU is the Central Pillar of MTS

Evolved through years of negotiations

Important achievement of UR

Based on Clearly defined rules
Need for a DSU





System without DSU is fragile
Enhances the Practical Value of the
Commitments
Settles disputes in a timely & structured
manner
Mitigates the imbalances between
stronger and weaker players
Members Trust it!
Improvements over GATT 1947
- a set of Principles







The system is designed to be: Equitable,
Fast, Effective, Mutually Acceptable
Following agreed procedures instead of
taking unilateral action
Clearly defined stages
Flexible-but not so flexible deadlines
A case shall normally take 12-15 months
Blocking the ruling is difficult
Encourages consultation & mediation
How are Disputes Settled?




Settling disputes is the responsibility of
DSB.
Consultation (1st stage – up to 60 days)
The Panel (2nd stage – 45 days + 6
months)
How the Panel works?
How the Panel Works?









Before the First Hearing
First Hearing
Rebuttals
Experts
First Draft
Interim Report
Review
Final Report
The Report becomes a ruling
Appeal




Either side can appeal a panel’s ruling.
(Sometimes both sides do so)
Each appeal is heard by 3 members of a
permanent 7-member Appellate Body
The appeal can uphold, modify or reverse
the panel’s legal findings and conclusions.
DSB has to accept or reject the appeals
report within 30 days
The case has been decided
what next?







Bring Policy in line with the Ruling
Inform the DSB
Adjustment Period
Mutually Acceptable – Compensation
Limited Trade Sanctions
How to impose sanctions?
DSB watches
Pakistan’s Experience
As complainant
3 cases:
as respondent
2 cases:
as third party
9 cases:
1
DS58 –US
DS36 – EC
DS32 – US
2
DS192 – US
DS107 – US
DS33 – US
3
DS327 – Egypt
DS58 – US
4
DS190 – Argentina
5
DS243 – US
6
DS246 – EC
7
DS267 – US
8
DS334 – Turkey
9
DS367 – Australia
Major Cases
Dispute
Number
Description
Request for
Consultations
PAKISTAN AS COMPLAINANT
DS58 United States — Import Prohibition of Certain Shrimp and Shrimp Products (Complainants: India;
Malaysia; Pakistan; Thailand)
DS192 United States — Transitional Safeguard Measure on Combed Cotton Yarn from Pakistan
(Complainant: Pakistan)
DS327 Egypt — Anti-Dumping Duties on Matches from Pakistan (Complainant: Pakistan)
PAKISTAN AS RESPONDENT
DS36 Pakistan — Patent Protection for Pharmaceutical and Agricultural Chemical Products
(Complainant: United States)
PAKISTAN AS THIRD PARTY
DS243 United States — Rules of Origin for Textiles and Apparel Products (Complainant: India)
DS246 European Communities — Conditions for the Granting of Tariff Preferences to Developing
Countries (Complainant: India)
DS267 United States — Subsidies on Upland Cotton (Complainant: Brazil)
DS316
DS317
DS347
DS353
OTHER CASES
European Communities — Measures Affecting Trade in Large Civil Aircraft (Complainant: United
States)
United States — Measures Affecting Trade in Large Civil Aircraft (Complainant: European
Communities)
European Communities — Measures Affecting Trade in Large Civil Aircraft (Second Complaint)
(Complainant: United States)
United States — Measures Affecting Trade in Large Civil Aircraft — Second Complaint
(Complainant: European Communities)
8 October 1996
3 April 2000
21 February 2005
30 April 1996
11 January 2002
5 March 2002
27 September 2002
6 October 2004
6 October 2004
31 January 2006
27 June 2005
DS 58: Import Prohibition of Certain
Shrimp and Shrimp Products




Complainant: Pakistan, Malaysia, India, Thailand
Respondent: USA
Third Parties: Australia; Colombia; Costa Rica; European
Communities; Ecuador; El Salvador; Guatemala; Hong Kong,
China; Japan; Mexico; Nigeria; Pakistan; Philippines; Senegal;
Singapore; Sri Lanka; Venezuela
8 October 1996: Complainants requested for consultation
concerning a ban on Importation of Shrimp & Shrimp
Products from the complainants, imposed by US under section
609 of US Public Law 101-162. Violations of Articles I, XI and
XIII of GATT 1994, as well nullification and impairment of
benefits, were alleged.
DS 58 (cont.)








9 January 1997: Malaysia and Thailand requested the establishment
of a panel.
22 Jan 1997: the DSB deferred the establishment of a panel.
30 January 1997: Pakistan also requested the establishment of a
panel.
25 February 1997: DSB established a panel
25 February 1997: India also requested the establishment of a panel
on the same matter.
20 March 1997: DSB deferred the establishment of a panel.
10 April 1997: Further to a second request to establish a panel by
India, the DSB agreed to establish a panel. It was also agreed to
incorporate this panel with that already established in respect of the
other complainants.
On 15 April 1997, the Panel was composed.
DS 58 (cont.)





15 May 1998: Report of the Panel was circulated to Members.
The Panel found that the import ban in shrimp and shrimp products
as applied by the United States is inconsistent with Article XI:1 of
GATT 1994, and cannot be justified under Article XX of GATT 1994.
13 July 1998: the US notified its intention to appeal certain issues of
law and legal interpretations developed by the Panel.
12 October 1998: Appellate Body’s Report was circulated to
Members.
The Appellate Body reversed the Panel’s finding that the US
measure at issue is not within the scope of measures permitted
under the chapeau of Article XX of GATT 1994, but concluded that
the US measure, while qualifying for provisional justification under
Article XX(g), fails to meet the requirements of the chapeau of
Article XX.
DS 58 (cont.)



6 November 1998: The DSB adopted the Appellate Body Report and
the Panel Report, as modified by the Appellate Body Report.
On 25 November 1998, the US informed the DSB that it was
committed to implementing the recommendations of the DSB and
was looking forward to discussing with the complainants the
question of implementation. The parties to the dispute announced
that they had agreed on an implementation period of 13 months
from the date of adoption of the Appellate Body and Panel Reports,
i.e. it expired on 6 December 1999.
On 22 December 1999, Malaysia and the United States informed the
DSB that they had reached an understanding regarding possible
proceedings under Articles 21 and 22 of the DSU.
DS 58 (cont.)




27 January 2000: US stated that it had implemented the
DSB’s rulings and recommendations.
12 October 2000: Malaysia requested that the matter be
referred to the original panel pursuant to Article 21.5 of the
DSU, considering that by not lifting the import prohibition and
not taking the necessary measures to allow the importation of
certain shrimp and shrimp products in an unrestrictive
manner, the US had failed to comply with the
recommendations and rulings of the DSB.
23 October 2000: DSB referred the matter to the original
panel pursuant to Article 21.5 DSU.
15 June 2001: The Panel circulated its report.
DS 58 (cont.)
The Panel concluded that:

the measure adopted by the US in order to comply with the
recommendations and rulings of the DSB violated Article XI.1 of the GATT
1994;


in light of the recommendations and rulings of the DSB, Section 609 of
Public Law 101-162, as implemented by the Revised Guidelines of 8 July
1999 and as applied so far by the US authorities, was justified under Article
XX of the GATT 1994 as long as the conditions stated in the findings of this
Report, in particular the ongoing serious good faith efforts to reach a
multilateral agreement, remain satisfied.
should any one of the conditions referred above cease to be met in the
future, the recommendations of the DSB may no longer be complied with.
In such a case, any complaining party in the original case may be entitled
to have further recourse to Article 21.5 of the DSU.
DS 58 (cont.)





23 July 2001: Malaysia notified the DSB its intention to appeal the
above report. Malaysia, in particular, sought review by the Appellate
Body of the Panel’s finding mentioned in point 2 in previous slide.
19 September 2001: the Appellate Body informed the DSB of a
delay in the circulation of its Report in this appeal.
22 October 2001: Report was circulated to the Members.
The Appellate Body upheld the contested findings of the Panel:
Since it had upheld the Panel’s findings that the US measure was
now applied in a manner that met the requirements of Article XX of
the GATT 1994, the Appellate Body refrained from making any
recommendations.
21 November 2001: DSB adopted the Appellate Body Report and the
Panel Report, as upheld by the Appellate Body Report.
DS 192: Transitional Safeguard
Measure on Combed Cotton Yarn from
Pakistan
Complainant: Pakistan
 Respondent: USA
 3 April 2000: Pakistan requested consultations with the US in
respect of a transitional safeguard measure applied by the US, as of
17 March 1999, on combed cotton yarn from Pakistan.
Pakistan claimed as follows:
 the transitional safeguards applied by the United States are
inconsistent with the United States’ obligations under Articles 2.4 of
the ATC and not justified by Article 6 of the ATC;


the US restraint does not meet the requirements for transitional
safeguards set out in paragraphs 2, 3, 4 and 7 of Article 6 of the
ATC.
DS 192 (cont.)







3 April 2000, Pakistan requested the establishment of a panel.
18 May 2000, the DSB deferred the establishment of a panel.
Further to a second request to establish a panel by Pakistan, the
DSB established a panel at its meeting on 19 June 2000
On 30 August 2000, the Panel was composed.
The panel circulated its report on 31 May 2001.
The Panel concluded that the transitional safeguard measure
(quantitative restriction) imposed by the US on imports of combed
cotton yarn from Pakistan as of 17 March 1999, and extended as of
17 March 2000 for a further year is inconsistent with the provisions
of Article 6 of the ATC.
With respect to the other claims, the Panel found that Pakistan did
not establish that the measure at issue was inconsistent with the US
obligations under Article 6 of the ATC.
DS 192 (cont.)





The Panel recommended that the DSB request that the US bring the
measure at issue into conformity with its obligations under the ATC,
and suggested that this can best be achieved by prompt removal of
the import restriction.
On 9 July 2001, the US notified its decision to appeal to the
Appellate Body certain issues of law covered in the Panel Report
and certain legal interpretations developed by the Panel.
On 5 September 2001, the Appellate Body informed the DSB that it
would not be able to circulate its report within the 7 September
deadline.
The Report was circulated to Members on 8 October 2001.
The Appellate Body upheld the Panel’s overall conclusion that the
transitional safeguard measure taken by the United States with
respect to imports of combed cotton yarn from Pakistan was
inconsistent with the ATC.
DS 192 (cont.)


The DSB adopted the Appellate Body Report and the Panel Report,
as modified by the Appellate Body Report, on 5 November 2001.
21 November 2001: the US stated that it had implemented the
DSB’s recommendations and rulings. Specifically, on 8 November
2001, the Committee for the Implementation of Textile Agreements,
chaired by the Department of Commerce, had directed the US
Customs Service to eliminate the limit on imports of combed cotton
yarn from Pakistan. This action was effective from 9 November
2001.
Ds 327: Anti-Dumping Duties on
Matches from Pakistan





Complainant: Pakistan
Respondent: Egypt
On 21 February 2005, Pakistan requested consultations with Egypt
regarding definitive anti-dumping duties imposed by Egypt on
matchboxes from Pakistan. According to Pakistan, these measures
appear to be inconsistent with Egypt’s obligations under the GATT
1994 and the Anti-Dumping Agreement.
On 9 June 2005, Pakistan requested the establishment of a
panel. At its meeting on 20 June 2005, the DSB deferred the
establishment of a panel. At its meeting on 20 July 2005, the DSB
established a panel.
On 27 March 2006, Pakistan and Egypt informed the DSB that they
had reached a mutually agreed solution under Article 3.6 of the DSU
in the form of price undertaking agreements between the concerned
Pakistani exporters and the Egyptian Investigating Authority.
DS 36: Patent Protection for
Pharmaceutical and Agricultural
Chemical Products





Complainant: USA
Respondent: Pakistan
In its request for consultations dated 30 April 1996, the United
States claimed that the absence in Pakistan of (i) either patent
protection for pharmaceutical and agricultural chemical products or
a system to permit the filing of applications for patents on these
products and (ii) a system to grant exclusive marketing rights in
such products, violates TRIPS Agreement Articles 27, 65 and 70.
On 4 July 1996, the United States requested the establishment of a
panel.
The DSB considered the request at its meeting on 16 July 1996, but
did not establish a panel due to Pakistan’s objection.
DS 36 (cont.)


At the DSB meeting on 25 February 1997, both
parties informed the DSB that they had reached
a mutually agreed solution to the dispute and
that the terms of the agreement were being
drawn up, and would be communicated to the
DSB once finalized.
On 28 February 1997, the terms of the
agreement were communicated to the
Secretariat.
DS 243: Rules of Origin for Textiles and
Apparel Products






Complainant: India
Respondent: USA
Third Parties: Bangladesh; China; European Communities; Pakistan;
Philippines.
On 11 January 2002, India requested consultations with the United
States in respect of its rules of origin applicable to imports of
textiles and apparel products as set out in Section 334 of the
Uruguay Round Agreements Act, Section 405 of the Trade and
Development Act of 2000 and the customs regulations implementing
these provisions.
On 7 May 2002, India requested the establishment of a panel.
On 22 May 2002, the DSB deferred the establishment of a panel.
DS 243 (cont.)





Further to a second request by India, the DSB established a panel
on 24 June 2002.
EC, Pakistan and the Philippines reserved their third party rights. On
3 July 2002, Bangladesh reserved its third party rights. On 4 July
2002, China reserved its third party rights.
On 10 October 2002, the Panel was composed.
On 9 April 2003, the Chairman of the Panel informed the DSB that
due to the complexity of the matter, the Panel would not be able to
complete its work in six months. The Panel expects to issue its final
report to the parties in early May 2003.
On 20 June 2003, the Panel Report was circulated to Members.
DS 243 (cont.)
On 20 June 2003, the Panel Report was circulated to Members. The
Panel found that:
 India failed to establish that section 334 of the Uruguay Round
Agreements Act is inconsistent with Articles 2(b) or 2(c) of the RO
Agreement; and

India failed to establish that section 405 of the Trade and
Development Act is inconsistent with Articles 2(b), 2(c) or 2(d) of
the RO Agreement;
India failed to establish that the customs regulations contained in 19
C.F.R. § 102.21 are inconsistent with Articles 2(b), 2(c) or 2(d) of
the RO Agreement;
At its meeting on 21 July 2003, the DSB adopted the Panel Report.
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DS 246: Conditions for the Granting of
Tariff Preferences to Developing
Countries
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Complainant: India
Respondent: European Communities
Third Parties: Bolivia; Brazil; Colombia; Costa Rica; Cuba; Ecuador;
El Salvador; Guatemala; Honduras; Mauritius; Nicaragua; Pakistan;
Panama; Paraguay; Peru; Sri Lanka; Venezuela; United States.
On 5 March 2002, India requested consultations with the EC
concerning the conditions under which the EC accords tariff
preferences to developing countries under its current scheme of
generalized tariff preferences (“GSP scheme”). India presented this
request pursuant to Article 4 of the DSU, Article XXIII:1 of the GATT
1994 and paragraph 4(b) of the so-called Enabling Clause.
On 6 December 2002, India requested the establishment of a panel.
On 19 December 2002, the DSB deferred the establishment of a
panel.
DS 246 (cont.)
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At its meeting on 27 January 2003, the DSB established a Panel.
On 24 February 2003, India requested the Director-General to
compose the Panel.
On 6 March 2003, the Director-General composed the Panel.
On 22 September 2003, the Chairman of the Panel informed the
DSB that it would not be possible to complete its work in six months
due to the complexity of the matter involved and that the Panel
expected to complete its work at the end of October 2003.
On 1 December 2003, the Panel report was circulated to the
Members.
On 8 January 2004, the European Communities notified its decision
to appeal to the Appellate Body certain issues of law covered in the
Panel Report.
DS 246 (cont.)
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On 5 March 2004, the Chairman of the Appellate Body informed the
DSB that it would not be possible for the Appellate Body to
complete its work within the 60-day period due to the time required
for completion and translation of its Report. The Appellate Body
estimated that the Report would be circulated to Members no later
than 7 April 2004.
On 7 April 2004, the Appellate Body Report was circulated to
Members.
On 20 April 2004, the DSB adopted the Appellate Body report and
the Panel report, as modified by the Appellate Body report.
DS 267: United States — Subsidies on
Upland Cotton
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Complainant: Brazil
Respondent: USA
Third Parties: Argentina; Australia; Benin; Canada; Chad; China;
Chinese Taipei; European Communities; India; New Zealand;
Pakistan; Paraguay; Venezuela; Japan; Thailand.
27 September 2002: Request for Consultation made by Brazil,
concerning US agricultural "domestic support" measures, export
credit guarantees and other measures alleged to be export and
domestic content subsidies on Upland Cotton.
Panel was established on 18 March 2003.
Panel report was circulated on 8 September 2004.
Appellate body report was circulated on 3 March 2005
On 18 August 2006, Brazil requested the establishment of an Article
21.5 panel.
DS 267 (cont.)
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On 1 September 2006, the DSB deferred the establishment of an
Article 21.5 panel. Further to a second request, at its meeting on 28
September 2006, the DSB agreed, if possible, to refer the matter
raised by Brazil to the original panel.
On 18 and 20 October 2006, Brazil and the United States
respectively requested the Director-General to compose the Article
21.5 panel. On 25 October 2006, the Director-General composed the
panel.
On 18 December 2007, the compliance panel report was circulated
to Members.
On 12 February 2008, the US and on 25 February 2008, Brazil
notified their decision to appeal to the Appellate Body.
Compliance panel report is currently under appeal.
DS 316: Measures Affecting Trade in
Large Civil Aircraft
Thank You