WORLD TRADE  
ORGANIZATION  WT/COMTD/RTA/3/1 
WT/REG265/1 30 June 2009 
 
(09-3164) 
Committee on Trade and Development 
Dedicated Session on Regional Trade Agreements  
 
 
   
 
 
FACTUAL PRESENTATION 
 
Closer Economic Partnership Agreement  
between  
Pakistan and Malaysia 
(Goods and Services) 
 
Report by the Secretariat 
 
 
 
 This report, prepared for the considera tion of the Closer Economic Partnership 
Agreement between Pakistan and Malaysia has been drawn up by the WTO 
Secretariat on its own responsibility and in fu ll consultation with the Parties.  The 
report has been drawn up in accordance with  the rules and procedures contained in 
the Decision for a Transparency Mech anism for Regional Trade Agreements 
(WT/L/671).   Any technical questions arising from this report may be addressed to 
Mr. Roberto Fiorentino (tel: +41 22 739 5595). WT/COMTD/RTA/3/1 
WT/REG265/1 
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  TABLE OF CONTENTS 
 
 
  Page 
 
I. TRADE ENVIRONMENT 1 
A. M ERCHANDISE TRADE  1 
B. S ERVICES TRADE  4 
II. CHARACTERISTIC ELEMENT S OF THE AGREEMENT 7 
A. B ACKGROUND INFORMATION  7 
III. NATIONAL TREATMENT AND MARKET A CCESS PROVISIONS ON TRADE IN 
GOODS 9 
A. I MPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  9 
1. General provisions 9  
2. Liberalization of tariff lines and trade 10  
(a) Pakistan 10 (b) Malaysia 14 
B. R
ULES OF ORIGIN  18 
C. E XPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  19 
D. R EGULATORY PROVISIONS ON TRADE IN GOODS  20 
1. Standards 20  
(a) Sanitary and Phytosanitary Measures 20 (b) Technical Barriers to Trade 20 
2. Trade remedies 21  
(a) Global safeguard actions 21 (b) Bilateral safeguard actions 21 
(c) Anti-dumping 22 
(d) Subsidies and countervailing measures 22 
3. Restrictions to safeguard the balance of payments 22  
4. Customs-related procedures 22  
IV. PROVISIONS ON TRADE IN SERVICES AND INVESTMENTS 23 
A. S
COPE AND DEFINITIONS  23 
B. D ENIAL OF BENEFITS  24 
C. G ENERAL PROVISIONS ON TRADE IN SERVICES AND INVESTMENTS  25 
1. Market access 25  
2. National treatment and MFN 25  
3. Movement of natural persons 25  
D. L IBERALIZATION COMMITMENTS ON TRADE IN SERVICES  26 
1. Pakistan 27  
(a) Horizontal commitm ents / exceptions 27 
(b) Sector specific commitments / exceptions 27 
2. Malaysia 29  
(a) Horizontal commitm ents / exceptions 29 
(b) Sector specific commitments / exceptions 29 
 WT/COMTD/RTA/3/1 
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  E. L IBERALIZATION COMMITMENTS ON INVESTMENT  31 
1. Pakistan 31  
2. Malaysia 33  
F. R EGULATORY PROVISIONS ON TRADE IN SERVICES AND INVESTMENTS  35 
1. Domestic regulation 35  
2. Mutual recognition 36  
3. Safeguard actions on services trade and investment 36  
(a) Emergency Safeguard Measures 36 
(b) Restrictions to Safeguard the Balance of Payments 37 
4. Payments, transfers and repatriation of investment 37  
5. Transparency 37  
6. Other 37  
V. GENERAL PROVISIONS  OF THE AGREEMENT 38 
1. General and security exceptions 38  
2. Accession 38  
3. Institutional framework 38  
4. Dispute settlement 38  
5. Other provisions 41  
(a) Intellectual property 41 
(b) Economic cooperation 41 
(c) Taxation measures 41 (d) General review 41 
6. Relationship with other agreements concluded by the Parties 42  
 
ANNEX I  44  
 
ANNEX II  52  
 
ANNEX III  53 
 
 
 WT/COMTD/RTA/3/1 
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  I. TRADE ENVIRONMENT 
1. The Closer Economic Partnership Agreemen t (CEPA) between the Islamic Republic of 
Pakistan and the Government of Malaysia (hereinafter  referred to as 'the Agreement' or 'PMCEPA') is 
the first bilateral Free Trade Agreement (FTA) between two members of the Organization of the 
Islamic Conference (OIC).  The Agreement is also Pakistan’s first comprehensive FTA incorporating 
trade in goods, trade in services, investment and economic co-operation.  In the Asian regional context, the Agreement adds to Pakistan's ex isting Regional Trade Agre ements (RTAs) with 
Sri Lanka and China, and to Malaysia's FTA with  Japan.  Both countries are members of regional 
plurilateral agreements, Pakistan as a party to the SAFTA and Malaysia to the ASEAN agreement 
(See Table V.2 for the Parties' participation in other RTAs). 
2. Pakistan's GDP was estimated at US$144 b illion in 2007 compared to US$181 billion for 
Malaysia.
1  The trade to GDP ratios of the two countries are considerably different, 209.6 for 
Malaysia and 41.6 for Pakistan.  This difference is re flected in their share of global trade in goods and 
services.  While in 2007 Pakistan ranked 66th in the world in terms of exports of goods and 52nd in 
terms of world imports, representing 0.13% of global exports and 0.23% of global imports, 
respectively, Malaysia ranked as the world's 19th exporter and 25th importer, representing 1.26% and 
1.03% respectively of global exports and im ports.  In services, Pakistan ranked 83rd and 53rd 
respectively in world exports and imports of co mmercial services, representing 0.07% of world 
exports and 0.27% of impor ts.  Malaysia ranked 30th in the world for both exports and imports of 
commercial services, representing respectively, 0.86% and 0.9% of world exports and imports. 
A. MERCHANDISE TRADE  
3. Recent developments in global and intra-Party trade are presented in Charts I.1 and I.2. 
0510152025303540
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20070.00.51.01.52.02.53.0US$billion US$billionChart I.1 - Pakistan: Merchandise imports from and exports to 
world and Malaysia, 1997-2007
Source : UNSD, Comtrade database.Imports from Malaysia
Exports to MalaysiaTotal imports
Total exportsLeft hand scale: Right hand scale:
 
                                                      
1 WTO, Trade Profiles. WT/COMTD/RTA/3/1 
WT/REG265/1 Page 2  
 
 
  4. In 2007 Pakistan was Malaysia's 54
th trading partner in terms of  imports, accounting for 0.1% 
of its total imports, and its 19th largest trading partner in terms of exports, accounting for 0.7% of its 
total exports. In the same year, Malaysia was Pakistan 8th largest trading partner in terms of imports, 
accounting for 3.6% of its total imports and its 33rd largest trading partner in terms of exports, 
accounting for 0.46% of its total exports.2  Over the period surveyed (1997-2007), Pakistan has run a 
consistent and increasing trade deficit with the world and with Malaysia while its exports to the latter 
have remained relatively constant.  As for Malays ia, over the same period, it has run an increasing 
trade surplus with Pakistan with exports reaching US$1.3 billion in 2007. 
020406080100120140160180200
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20070.00.20.40.60.81.01.21.41.61.82.0US$billion US$billionChart I.2 - Malaysia: Merchandise imports from and exports to 
world and Pakistan, 1997-2007
Source : UNSD, Comtrade database.Imports from Pakistan
Exports to PakistanTotal imports
Total exportsLeft hand scale: Right hand scale:
 
5. The commodity structure of trade among the Parti es, as well as of their imports and exports to 
the world in the three years preceding entry into force of the Agreement (2005-2007), is shown in 
Chart I.3 on the basis of Harmonized System (HS)  section.  Malaysia's two largest export product 
categories – machinery and minerals – made up 66.4%  of its total exports in 2005-2007.  Over the 
same period, machinery also accounted for 11.4% of  Pakistan's total imports from Malaysia figuring 
as its second largest import product category; the commodity structure of Pakistan's imports from Malaysia was, however, largely concentrated in one category, animal or vegetable fat and oils which 
represented 59.2% of its total imports from the latte r and which was Malaysia's fourth largest global 
export category.  As for Malaysia's imports fro m Pakistan, three product categories (textiles, 
vegetables and animals) represented 76.9% of its tota l imports from the latter;  two of these (textiles 
and vegetables) also accounted for Pakistan's two largest export product categories to the world with 
shares of 62.7% and 9.2% respectively.   
                                                     
 
2 UNSD, Comtrade database (2007). WT/COMTD/RTA/3/1 
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  Chart I.3
Pakistan and Malaysia: product compos ition of merchandise trade, annual 
average 2005-2007
Pakistan's imports from Malaysia Malaysia's imports from Pakistan
 Source:  UNSD, Comtrade database.Per cent
Total:  US$885 million Total:  US$67 million
Total:  US$29.2 billion Total: US$131 billion
Total:  US$16.9 billion Total:  US$159 billionPakistan's global exports Malaysia's global exportsPakistan's global imports Malaysia's global imports Chemicals 8.1
Machinery
50.7Animals 18.5
Minerals 
14.0Chemicals 4.3Optical 3.0
Textiles
62.7Other 
10.5Other 
7.5
Miscellaneous 2.1Machinery 50.7
Base metals 8.1
Plastics 5.6Base metals 4.0 Textiles 3.2
Minerals 6.2Other
4.7Other 
5.7
Articles of wood  2.8Other 
9.5Machinery 5.5
Vehicles  7.9Minerals 24.9
Machinery 21.4Textiles 5.2
Chemicals  11.5Plastics 5.0Textiles 31.1 Miscellaneous 2.0
Other 
6.4
Vehicles  4.4Prepared foods 2.1
Chemicals  5.5Fat and oils 59.2
Machinery 11.4Prepared foods 3.3Base metals 2.1
Vegetables 27.3Plastics 9.0Chemicals  3.2
Minerals 9.2Articles of wood 2.3
Base metals 9.4Plastics 4.3
Raw hides 6.1
Vegetables 9.2Optical 2.5Vegetables 4.2Fat and oils 3.5 Prepared foods 2.1
Fat and oils 5.0Prepared foods 1.7Plastics 1.6Vehicles  1.7Raw hides 1.7
Vegetables 1.8
Miscellaneous 1.8Textiles 1.8
 WT/COMTD/RTA/3/1 
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  B. S
ERVICES TRADE  
6. Chart I.4 shows the breakdown of commercial services trade for Pakistan in 2000-2007.  
Transportation services, travel services and other bus iness services represent the largest categories in 
terms of both exports and imports of commercial servi ces.  As for trade in goods, Pakistan's services 
trade deficit has continued to expand, with  growth in imports outpacing export growth. 
0123456789
2000 2001 2002 2003 2004 2005 2006 20070123456789
2000 2001 2002 2003 2004 2005 2006 2007Chart I.4
Pakistan, total commercial services trade, 2000-2007
Exports Imports
Transportation services Insurance services Other business services
Travel services Financial services
Communication services Computer and information servicesPersonal, cultural and 
recreational services
Source : IMF Balance of Payments Statistics.Construction services Royalties and license feesUS$ billions US$ billions
Figures in 2004 indicate break-in series for commercial services , travel  and other business services .
 
7. Pakistan's global investment position is descr ibed in Chart I.5 which shows inward and 
outward foreign direct investment (FDI) stocks with the world for the period 2000-2007. Pakistan's 
inward FDI stock reached US$20 billion in 2007 up from nearly US$7 billion in 2000;  this marks a 
16% average annual increase compared to a 11% av erage annual increase of its outward FDI stock 
over the same period;  the latter stood at US$1 billion in 2007. WT/COMTD/RTA/3/1 
WT/REG265/1 
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  0510152025
2000
2001
2002
20032004
2005
2006
20070.00.51.01.5
2000
2001
2002
200320042005
2006
2007Chart I.5
Pakistan inward and outw ard foreign direct invest ment stock from world, 
2000-2007
Inward Outward
Source: UNCTAD, Foreign Direct Investment database.US$ billion US$ billion
 
 
8. The evolution of Malaysia's commercial services trade during the period 2000-2007 is 
illustrated in Chart I.6.  Similarly to Pakistan, transportation services, travel services and other business services represent the largest categories in terms of both exports and imports of commercial services.   
 WT/COMTD/RTA/3/1 
WT/REG265/1 Page 6  
 
 
  051015202530
2000 2001 2002 2003 2004 2005 2006 2007051015202530
2000 2001 2002 2003 2004 2005 2006 2007Chart I.6
Malaysia, total commercial services trade, 2000-2007
Exports Imports
Transportation services Insurance services Other business services
Travel services Financial services
Communication services Computer and information servicesPersonal, cultural and 
recreational services
Source : IMF Balance of Payments Statistics.Construction services Royalties and license feesUS$ billions US$ billions
 
 
9. Malaysia's global investment position is depi cted in Chart I.7 which shows inward and 
outward foreign direct investment (FDI) stocks with  the world for the period 2000-2007.  Malaysia's 
inward FDI stock reached US$77 billion in 2007 up  from US$53 billion in 2000;  this marks a 6% 
average annual increase compared to  a 20% average annual increase of its outward FDI stock over the 
same period;  the latter stood at US$58 billion in 2007. 
 
 WT/COMTD/RTA/3/1 
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  01020304050607080
2000
2001
2002
20032004
2005
2006
200701020304050607080
2000
2001
2002
2003
2004
2005
2006
2007Chart I.7
Malaysia inward and outward foreign direct investment stock from world, 
2000-2007
Inward Outward
Source: UNCTAD, Foreign Direct Investment database.US$ billion US$ billion
 
 
II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
A. BACKGROUND INFORMATION  
10. The Pakistan-Malaysia Closer Economic Partne rship Agreement was signed by Pakistan and 
Malaysia on 8 November 2007 and entered into fo rce on 1 January 2008.  The Parties notified the 
goods and services aspects of the Agreement to the WT O on 19 February 2008 under Paragraph 4(a) 
of the Enabling Clause, and Article V:7(a)  of the GATS (document WT/COMTD/N/24 and 
S/C/N/440) respectively.  The text of the Agreement is  available, together with  its related Annexes, on 
the following official websites: 
• Pakistan:  http://www.commerce.gov.pk/Pak-Mlay-FTA.asp  
• Malaysia:  http://www.miti.gov.my3 
11. The Agreement builds upon and replaces the Agreement on the Early Harvest Programme 
(EHP) for the Free Trade Area (FTA) between Mala ysia and Pakistan which was signed on 1 October 
2005 in Kuala Lumpur.  The EHP entered into fo rce on 1 January 2006 and provided market access 
between the Parties for a limited number of products (See Box II.1).4 
                                                      
3 The URL address is to Malaysia's  Trade and Industry portal.  The link to the text of the Agreement 
can be found under the directory "Trade Informa tion" and sub-directory "Free Trade Agreements". 
4 For the text of the Agreement and Annexes see:  http://www.commerce. gov.pk/PMEHP.asp  WT/COMTD/RTA/3/1 
WT/REG265/1 Page 8  
 
 
  Box II.1: Main elements of the EHP between Pakistan and Malaysia 
The EHP covers products with MFN tariffs of up to 10%;  upon implementation tariffs on products with MFN rates of: 
• 5% are to be eliminated;  and 
• 10% are to be accorded a margin of preference of 50%. 
Pakistan's EHP offer to Malaysia cove rs 125 tariff lines. The products include: 
• Machinery; mechanical equipment a nd appliances; plastic pr oducts; chemical products; rubber and rubber 
products; and timber products. 
Malaysia's offer to Pakistan covers  114 tariff lines.  The products are: 
• Textiles and clothing; agricu ltural products; and jewellery. 
Interim Rules of Origin (ROO) are applied to the products cove red under the EHP.  A 40% local content rule is applied in 
general while product specific rules are ap plied to textile and clothi ng, and jewellery.  The EHP ROO are replaced by a 
new set of rules under the FTA. 
WTO provisions governing safeguard acti ons, emergency measures and other remedies, incl uding anti-dumping and 
countervailing measures shall be  applicable to the products under the EHP and shall be superseded and replaced by the 
relevant disciplines to be negotiated und er the FTA. Disputes concerning the implementation of the EHP Agreement shall 
be settled amicably by mutual consultation.  
Source:  Pakistan Minist ry of Commerce - http://www.commerce.gov.pk/PMEHP.asp  
12. The PMCEPA aims at establishing between th e Parties a free trade area that will promote 
market opportunities for goods, services and investment  through the progressive liberalization of trade 
in goods, services and cross-border investment flow s and the establishment of a transparent rules 
framework to regulate trade and investments.  The Agreement al so seeks to enhance cooperation 
between the Parties on economic, trade and investments matters as well as socio-economic 
partnership in areas of mutual interest (Article 1). 
13. The Agreement is composed of 14 Chapters  and has seven related Annexes, as follows: 
Table II.1:  Chapters, annexes of the Agreement 
Chapters and Annexes Title/description 
Preamble  
Chapter 1 General Provisions 
Chapter 2 Trade in Goods 
Chapter 3 Rules or Origin 
Chapter 4 Customs Procedures and Cooperation 
Chapter 5 Trade Remedies 
Chapter 6 Sanitary and Phytosanitary Measures  
Chapter 7 Technical Barriers to Trade 
Chapter 8 Trade in Services 
Chapter 9 Investments 
Chapter 10 Intellectual Property 
Chapter 11 Economic Cooperation 
Chapter 12 Dispute Settlement Mechanism 
Chapter 13 General Exceptions 
Chapter 14 Final Provisions 
Annex 1 Schedules of Concessions 
Annex 2 Product Specific Rules 
Annex 3 Certificate of Origin Form 
Annex 4 Operational Certification Procedure 
Annex 5 Schedules of Specific Commitments 
Annex 6 Framework on Mutual  Recognition Arrangements 
Annex 7 Reservations for Existing and Future Measures 
Source : Closer Economic Partnership Agreem ent between Pakistan and Malaysia. WT/COMTD/RTA/3/1 
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  III. NATIONAL TREATMENT AND MARKET ACCESS PROVISIONS ON TRADE IN 
GOODS 
A. IMPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
1. General provisions 
14. Chapter 2 sets out the general definitions, market access provisions and regulatory regime 
applicable to trade in goods between the Parties. 
15. Each Party accords national treatment to the goods of the other Party in accordance with 
Article III of the GATT 1994 (Article 13). 
16. With respect to market access, Article 14 contains a standstill provision whereby customs 
duties which are levied at 0% or nil on the date of signature of the Agreement shall be maintained at 
those levels;  for customs duties in excess of 0% the Parties agree to reduce or eliminate customs 
duties on originating goods in accordance with their respective schedules as set out in Annex 1 of the 
Agreement and to not increase such duties except as otherwise provided for under the Agreement 
(Article 14).5  No timeframe for the implementation of su ch commitments is explicitly stated in the 
Agreement, however, the Parties' schedules in Anne x 1 indicate transition periods of up to 4 years 
with respect to tariff elimination and 6 years for tariff reductions. 
17. Part 1 to Annex 1 lists the tracks relating to the tariff treatment accorded by the Parties;  these 
are common to both Parties except the category "Tariff Rate Quota" (TRQ) which is specific to Malaysia.  The tracks can be grouped in four main categories providing respectively for tariff 
elimination, tariff reductions, TR Qs, and excluded products.  The fi rst category provides for a "fast 
track" on tariff elimination ending on 1 January 20 09 and a "normal track" ending in 2012.  The 
second category includes three "sensitive tracks", two of  which provide for tariff reductions to rates of 
5% and 10% by 2014 and one for tariff reductions to a rate of 20% by 2011;  two more tracks on 
"margin of preference" (MOP) provide for tariff ra tes being reduced on a margin of preference basis 
reaching a 20% MOP by 2011 in the case of MOP1 and 10% and 15% MOP by 2010 for MOP2.  The 
TRQ category only applies to Malaysia which reser ves the right to maintain TRQs as set out in 
Section I-B of Part I of Malaysia's schedule to the GATT 1994.  Part 4 to Annex 1 contains the 
schedule of TRQs applied by Malaysia under the Ag reement; this lists the pr oducts subject to TRQs, 
the in-quota duty-free volume allocated to Pakistan, and the out of quota rates.  The last category 
provides for the Parties' "Exclusion List" and "Hig hly Sensitive List" (HSL) of  products;  products 
placed under the HSL remain unbound but subject to review in 2009.
6 
18. Either Party may upon notification to the other Party, accelerate the implementation of 
concessions or expand upon them and by mutual agreement modify or withdraw any concession 
provided in Annex 1 (Article 15).  The Parties agre e to undertake a general review of the Agreement 
in the fifth calendar year following its entry into  force and every five years thereafter, unless 
otherwise agreed by them (Article 130). 
19. Other general provisions include the prohibiti on to introduce or maintain any non-tariff 
measures on the bilateral import or export of goods  which are inconsistent with the Parties'' 
obligations under the WTO Agreement;  furthermore,  they undertake to identify non-tariff measures 
                                                      
5 Article 15 provides that either Party may, by mutu al agreement, modify or withdraw any concession 
provided in Annex 1. 
6 According to the Parties no such review has yet taken place. WT/COMTD/RTA/3/1 
WT/REG265/1 Page 10  
 
 
  which are creating unnecessary restriction to trad e and to eliminate them in accordance with a 
timeframe to be mutually agreed upon (Article 17).
7 
Table III.1 - Market Access:  Basic features at a glance 
 Pakistan Malaysia 
Base 
rate MFN 2006 HS 8 digit level MFN 2006 HS 9 digit level Scope and 
coverage  
HS Chapters 1-97 
• Elimination or reduction of duties in accordance with the 
schedule in Annex 1 (Part 3) HS Chapters 1-97 
• Elimination or reduction of duties in accordance with 
the schedule in Annex 1 (Part 2) 
Tariff elimination or reduction in accordance with each Party's schedule as contained in Annex I 
Tracks of tariff elimination or reduction (General notes – Part 1 to Annex 1) 
Track Description  End date 
(1 January) 
Fast Track Progressive elimination 2009 
Normal Track Progressive elimination 2012 
Sensitive Track 1 Progressive reduc tion of base rates to 5% 2014 
Sensitive Track 2 Progressive reduc tion of base rates to 10% 2014 
Sensitive Track 3 Progressive reduc tion of base rates to 20% 2011 
Margin of Preference Track 1 Progressive increase  of margin of preference from 5% to 20%  2011 
Margin of Preference Track 2 Progressive increase  of margin of preference from 10% to 15% 2010 
Highly Sensitive List Retain MFN rates but subject to review in 2009  
Tariff Rate Quota Elimination of in -quota tariff for specific volumes 2008 Schedule of tariff concessions 
Exclusion List Excluded lines  
a Margin of preference of the prevailing MFN applied rate in the current year  or MFN rate upon entry into force of the Agreemen t, 
whichever is lower. 
b As above.  
Source : Annex I to the Agreement. 
 
2. Liberalization of tariff lines and trade8 
20. The elimination of tariffs between the Parti es is detailed in their corresponding schedules.  
For both Parties, tariff elimination started at entry into force of the Agreement;  the base rates for 
tariff reductions were the MFN applied duties on  1 January 2006 in the case of Malaysia and 
1 July 2006 in the case of Pakistan.  For both Pa rties, subsequent duty reductions take place on 
1 January of each year. 
(a) Pakistan 
21. Pakistan's tariff elimination under the Agreement is depicted in Table III.2.9  5% of Pakistan's 
tariff lines were already duty-free on an MFN basis in 200810 which corresponded to 5.6% of imports 
from Malaysia for the period 2005-2007.11  Pakistan's scheduled ta riff liberalization under the 
Agreement takes place in two stages:  in 2009, 22 % of tariff lines become duty-free corresponding to 
                                                      
7 The sub-committee on Trade in G oods established under Article 19 is responsible for any deliberation 
on this issue. 
8 Unless otherwise specified, all statistics contained in the tables and charts have been prepared on the 
basis of data provided by the Parties. 
9 For tariff lines subject to TRQs only the out-of-quota duty is included in the tariff-related 
calculations. 
10 Pakistan's tariff is composed of 6,803 tariff lines at the HS 8-digit level;  99.3% of this tariff is 
ad valorem, and 0.7% relates to lines with specific duties. 
11 Import data provided by Pakistan is on the basis of the fiscal year running from 1 July to 30 June.  
Therefore, the data reflected in the ch arts and tables included in this fact ual presentation relates to the period 
from 1 July 2004 to 30 June 2007. WT/COMTD/RTA/3/1 
WT/REG265/1 
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  13.3% of imports from Malaysia;  in 2012 an additional 17.2% of tariff lines will become duty-free, 
corresponding to 0.9% of imports from Malaysia.  By the end of the transition period 44.2% of 
Pakistan's tariff schedule will be duty-free, corres ponding to 19.8% of imports  from Malaysia;  55.8% 
of Pakistan's tariff lines will remain subject to duty corresponding to 80.3% of its imports from 
Malaysia.   
Table III.2 – Pakistan: Tariff elimination commitments  under the Agreement and corresponding average trade 
Duty phase-out 
period Number 
of lines % of total lines in 
Pakistan's tariff schedule Value of Pakistan's imports 
from Malaysia (2005-2007) 
in million US$ % of Pakistan's total imports 
from Malaysia (2005-2007) 
MFN duty free 
(2008) 338 5.0 42.2 5.6 
2009 1,495 22.0 100.6 13.3 
2012 1,173 17.2 6.6 0.9 
Remain dutiable 3,797 55.8 608.9 80.3 
Total 6,803 100.0 758.3 a 100.0 
a Only trade falling under HS Chapters 1-97 is included. 
Note: Based on HS 2002 nomenclature. 
Source :  WTO estimates based on data provided by Pakistan. 
 
22. The base rates used by Pakistan for implemen ting its tariff liberalization scheme provided for 
5% of the tariff or 338 tariff lines being duty free on an MFN basis before the entry into force of the 
Agreement.  Of the remaining 6,465 tariff lines, 3,2 34 held a base rate of up to 10%, 1,390 between 
10% and 20%,  1,362 between 20% and 30%,  363 between 30% and 40%, 13 between 40% and 50%, 
and 58 a base rate of over 50%;  45 lines had non ad valorem  rates.  Table III.3 shows Pakistan's tariff 
elimination under the Agreement by year and duty range .  Liberalization of tariff lines with a base rate 
of up to 10% takes place in four stages and most si gnificantly in 2009;  27.3% of  tariffs in this range 
are excluded from liberalization.  Tariff lines with  base rates of between 10% and 20% and 20% and 
30% are liberalized in two stages beginning in 20 09 and ending in 2012; 89.3% and 88% respectively 
of tariffs in these ranges are excluded from liberaliza tion.  No liberalization is scheduled for tariff 
lines with rates above 30%.  As for tariff lines with non ad valorem  rates, five such lines are 
liberalized in 2009.  By the end of the transition period, 3,797 tariff lines corresponding to 55.8% of Pakistan's tariff schedule will retain a duty.   
Table III.3 – Pakistan: Tariff elimination under the Agreement by year and duty range 
Schedule of tariff liberalization Excluded tariff lines MFN duty range No. of lines 2009 2012 No. of lines % of lines in  range 
Duty Free 338     
<=10 3,234 1,358 993 883 27.3 
<=20 1,390 69 80 1,241 89.3 
<=30 1,362 63 100 1,199 88.0 
<=40 363   363 100.0 
<=50 13   13 100.0 
> 50 58   58 100.0 
Non ad valorem  45 5  40 88.9 
Total 6,803 1,495 1173 3,797 55.8 
Note: Based on HS 2002 nomenclature. 
Source:  WTO Secretariat estimates, based on data provided by Pakistan. 
23. Table III.4 shows Pakistan's liberalization commitments under the Agreement organized by 
HS Section product categories.  Of the 6,803 tari ff lines forming Pakistan's tariff schedule 338 were 
already duty free on an MFN basis in 2008.  The bulk of trade liberalization occurs in 2009 and 2012;  tariff liberalization is distributed across the HS S ections with a majority of tariff lines, however, 
falling under HS Sections V (Chemicals) and XVI (Mach inery).  Of the 3,797 lines retaining a duty at 
the end of the transition period, the vast major ity fall under HS Sections VI, VII (Plastics), WT/COMTD/RTA/3/1 
WT/REG265/1 Page 12  
 
 
  XI (Textiles), XV (Base metals), XVI and XVII (Transport equipment).  The average tariff that 
applies to the excluded lines is 17.3% compared  to an overall MFN applied average of 14.5%. 
Table III.4 - Pakistan:  Tariff eliminat ion under the Agreement, by HS section 
Number of duty-free 
lines  HS section and description  MFN 
average
% Total No 
of lines  MFN 
2008  2009 2012 Remain 
dutiable  Avg. tariff of 
excluded lines  
I Live animals and animal products 11.8 239 24 156  59 21.0 
II Vegetable products 10.7 306 59 119 97 31 8.1 
III Animal or vegetable fats and oils 11.8 55   4 51 12.9 
IV Prepared foods etc. 23.9 230  39 108 83 32.5 
V Minerals 8.2 197 23 111 12 51 12.1 
VI Chemicals and chemical products 8.3 1,142 39 400 306 397 11.1 
VII Plastics and rubber 16.4 283 20 15 13 235 17.4 
VIII Hides and skins 9.8 82 34 6 12 30 18.2 
IX Wood and articles 12.8 91 25 3 4 59 14.4 
X Pulp, paper etc. 16.5 186 24 15 8 139 17.1 
XI Textiles and textiles ar ticles 18.6 919 26 24 71 798 15.9 
XII Footwear, headgear 23.1 59    59 13.1 
XIII Articles of stone 21.5 176  3 8 165 16.2 
XIV Precious stones, etc. 5.0 60 3 57   13.8 
XV Base metals and base metals 
products 13.6 762 24 81 133 524 18.6 
XVI Machinery 13.1 1,209 28 314 280 587 38.6 
XVII Transport equipment 32.9 282 1 17 33 231 16.9 
XVIII Precision equipment 9.3 298 7 132 79 80 20.2 
XIX Arms and ammunition 20.2 52    52 12.2 
XX Misc. manufactured articles 21.0 168 1 1 3 163 6.7 
XXI Works of art, etc. 5.7 7  2 2 3 21.0 
Total 14.5 6,803 338 1,495 1,173 3,797 17.3 
Note: Based on HS 2002 nomenclature. 
Source:  WTO estimates based on data provided by Pakistan. 
24. Chart III.1 shows a comparison of average du tiable rates in those HS Sections where 
preferential duties remain.  The comparison is made  between Pakistan's average preferential and MFN 
rates for lines which remain subject to preferential duties only.  As it can be seen from the Chart, 
average preferential duties are for most HS S ections lower than the corresponding MFN duties 
indicating preferential tariff reduc tions, although in most cases only marginal ones (the average 
reductions across these HS Sections varies from 0. 5 to 10 percentage points).  With respect to 
HS Sections XIX and XXI the average preferential rates mirror the MFN rates.  Table AI.5 in the 
Annex provides the average of Pakistan's dutiable rates detailed by HS Chapter. WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 13 
 
 
  0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0XXIXXXIXXVIIIXVIIXVIXVXIVXIIIXIIXIXIXVIIIVIIVIVIVIIIIIIChart III.1
Pakistan: Average of dutiable rates, by HS SectionHS Section  
Source :  WTO Secretariat estimates, based on data provided by Pakistan.Average rate of duty (%)
MFN Preferential
 
25. Some of the tariff lines retaining duties are s ubject to progressive tariff reductions.  The 
Agreement provides for different types of tariff re ductions in accordance with Sensitive Tracks 1 to 3 
and Margin of Preference 1 and 2 (See paragraph 17 and Table III.1);  Pakistan has scheduled such 
reductions with respect to 2,004 tariff lines co rresponding to 29.5% of its tariff schedule and 
amounting to 9% of imports from Malaysia (See Table III.5). 
Table III.5 – Pakistan: Tariff reduction commitment s under the Agreement and corresponding average trade 
Duty reduction 
period Number 
of lines % of total lines in 
Pakistan's tariff schedule Value of Pakistan's imports 
from Malaysia (2005-2007) 
in million US$ % of Pakistan's total imports 
from Malaysia 2005-2007 
2009 381 5.6 23.6 3.1 
2010 1,093 16.1 38.8 5.1 
2011 518 7.6 6.0 0.8 
2014 12 0.2 0.1 0.0 
Total 2,004 29.5 68.5 9.0 
Source:   WTO estimates based on data provided by Pakistan. 
26. Chart III.2 shows the average rates by HS Section of the tariff lines benefiting from tariff 
reductions;  the reduced tariff rates range from 5% to  20%  reflecting tariff reductions varying from 4 
to 10.4 percentage points. 
 WT/COMTD/RTA/3/1 
WT/REG265/1 Page 14  
 
 
  0 5 10 15 20 25 30XXIXXXIXXVIIIXVIIXVIXVXIVXIIIXIIXIXIXVIIIVIIVIVIVIIIIIIChart III.2
Pakistan:  Average rates of tariff lines reductions, by HS Section
HS Section  
Source :  WTO Secretariat estimates, based on data provided by Pakistan.Average rate of duty (%)
MFN Preferential
 
(b) Malaysia 
27. Malaysia's tariff elimination under the Agreement is depicted in Table III.6.12  57.9% of 
Malaysia's tariff lines were already duty-free on an MFN basis in 200813 which corresponded to 
47.6% of imports from Pakistan for the period 2005- 2007.  Upon entry into force of the Agreement, 
Malaysia eliminated duties on an additional 2.6% of tariff lines amounting to 0.4% of imports from 
Pakistan.  The remaining tariff lines are scheduled to be liberalized from 2009 to 2015 with the most 
significant tariff liberalization stage – in terms of number of tariff lines – occurring in 2012 with an 
additional 10.1% of Malaysia's tariff lines becoming  duty-free.  By the end of the transition period 
75.4% of Malaysia's tariff schedule will be duty-free, corresponding to 79.5% of imports from 
Pakistan;  24.6% of Malaysia's tariff lines will re main subject to duty corresponding to 20.5% of its 
imports from Pakistan.   
 
   
 
                                                     
 
12 For tariff lines subject to TRQs only the out-of-quota duty is included in the tariff-related 
calculations. 
13 Malaysia's tariff is composed of 10,389 tariff lines  at the HS 9-digit level;  99.2% of this tariff is 
ad valorem; 0.4% relates to tariff lines with specific duties;  0.3% relates to compound tariff lines;  and 0.1% 
relates to mixed tariff lines.  For compound and mixed lines, only the ad valorem  component is taken into 
account in the calculation of averages. WT/COMTD/RTA/3/1 
WT/REG265/1 
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  Table III.6 – Malaysia: Tariff elimination commitments under the Agreement and corresponding average trade 
Duty phase-out 
period Number 
of lines % of total lines in Malaysia's 
tariff schedule Value of Malaysia's imports 
from Pakistan (2005-2007) 
in million US$ % of Malaysia's total 
imports from Pakistan 
2005-2007 
MFN duty free 
(2008) 6,018 57.9 30.8 47.6 
2008 273 2.6 0.3 0.4 
2009 454 4.4 0.4 0.6 
2010 8 0.1 0.0 0.0 
2012 1,054 10.1 17.0 26.3 
2013 21 0.2 0.0 0.0 
2015 5 0.0 3.0 4.6 
Remain dutiable 2,556 24.6 13.2 20.5 
Total 10,389 100.0 64.6 100.0 
Note: Based on HS 2007 nomenclature. 
 Only tariffs falling under HS Chapters 1-97 is included. 
Source :  WTO estimates based on data provided by Malaysia. 
28. The base rates used by Malaysia for implemen ting its tariff liberalization scheme already 
provided for 57.9% of the tariff or 6,018 tariff lin es being duty free on an MFN basis before the entry 
into force of the Agreement.  Of the remaining 4,371 tariff lines, 1,642 held a base rate of up to 10%, 
1,278 of between 10% and 20%, 1,139 betw een 20% and 30%, 35 between 30% and 40%, 
223 between 40% and 50%, and 15 more than 50%;  39 were lines with non ad valorem  rates.  
Table III.7 shows Malaysia tariff elimination un der the Agreement by year and duty range.  
Liberalization of tariff lines with a base rate of up to 10% takes place in five stages with most lines 
scheduled to be liberalized in 2009 and 2012;  16.3 % of tariff lines in this range are excluded from 
liberalization.  Liberalization of tariff lines w ithin the 10% to 20%, 20% to 30% and 30% to 40% 
tariff ranges occurs mainly in 2012;  the percentage  of tariff lines within these ranges excluded from 
liberalization is respectively 77.8%,  87.4% and 68.6%.  99.6% of the tariff lines with a base rate of 
between 40% and 50% are excluded from liberalization, the only exception being one tariff line 
liberalized in 2008.  No liberalization is scheduled for tariff lines in the over 50% tariff range.  As for 
tariff lines with non ad valorem  rates, one such lines is scheduled for liberalization in 2009.  By the 
end of the transition period, 2,556 tariff lines will retain a duty corresponding to 24.6% of Malaysia's 
tariff schedule.   
Table III.7 – Malaysia: Tariff elimination unde r the Agreement by year and duty range 
Schedule of Tariff Liberalization Excluded lines 
MFN duty range No. of lines 2008 2009 2010 2012 2013 2015 No. of lines % of lines in 
range 
Duty Free 6,018         
<=10 1,642 199 438 8 708 21  268 16.3 
<=20 1,278 49 14  216  5 994 77.8 
<=30 1,139 24 1  119   995 87.4 
<=40 35    11   24 68.6 
<=50 223 1      222 99.6 
> 50 15       15 100.0 
Non ad valorem   39  1     38 97.4 
Total 10,389 273 454 8 1,054 21 5 2,556 24.6 
Note: Based on HS 2007 nomenclature. 
 Only tariffs falling under HS Chapters 1-97 is included. 
 
Source:  WTO Secretariat estimates, based on data provided by Malaysia. 
29. Table III.8 shows Malaysia's liberalization co mmitments under the Agreement organized by 
HS Section product categories.  Of the 10,389 ta riff lines forming Malaysia's tariff schedule 6,018 
were already duty free on an MFN basis in 2008.  Of the 273 tariff lines liberalized upon entry into 
force of the Agreement, most fall under HS Section IV (Prepared foods) and XVI (Machinery).  The next significant stages of tariff liberalization occur in 2009 and 2012 with 454 and 1,054 tariff lines WT/COMTD/RTA/3/1 
WT/REG265/1 Page 16  
 
 
  respectively becoming duty-free;  tariff liberalization is distributed across the HS Sections with a 
majority of tariff lines, however, falling under HS S ections VII (Plastics), IX (Wood), XI (Textiles), 
XV (Base metals), and XVI.  Of the 2,556 tariff li nes retaining a duty at the end of the transition 
period, the vast majority fall under HS Sections VI  (Chemicals), VII, X (Pulp, paper), XI, XV, XIII 
(Articles of stone), XVI and XVII (Transport equipment).  The average tariff that applies to the 
excluded lines is 19.2% compared to an overall MFN applied average of 7.8%. 
Table III.8 - Malaysia: Tariff eliminatio n under the Agreement, by HS section 
Number of duty-free lines  
HS section and description  MFN 
avg. 
% Total 
No of 
lines  MFN 
2008  
2008 
2009 
2010 
2012 
2013 
2015 
Remain dutiable  
Avg. tariff of 
excluded lines 
I Live animals and animal products 3.2 325 259 27   24   15 14.7 
II Vegetable products 3.0 354 251 20 43  16   24 19.8 
III Animal or vegetable fats and oils 2.6 166 98  23 1 33   11 6.8 
IV Prepared foods etc. 5.2 462 200 111 23 1 48 21  58 6.3 a 
V Minerals 1.6 203 178  7  7   11 14.1 
VI Chemicals and chemical products 2.4 1,083 902 17 4  48   112 17.8 a 
VII Plastics and rubber 14.7 655 190 2 2  151   310 19.0 
VIII Hides and skins 5.4 99 63  10  24   2 20.0 
IX Wood and articles 1.4 2,024 1,880  6  138     
X Pulp, paper etc. 10.4 333 123 1   21   188 14.8 
XI Textiles and textiles article s 12.1 1,075 241 1 14  381  5 433 14.3 
XII Footwear, headgear 15.0 84 26 1 5  1   51 14.5 
XIII Articles of stone 20.1 204 49  11  14   130 20.8 
XIV Precious stones, etc. 2.7 62 42  14  5   1 10.0 
XV Base metals and base metals pr oducts 18.5 1,020 299  140 6 33   542 27.9 a 
XVI Machinery 6.5 1,257 768 92 90  17   290 14.4 
XVII Transport equipment 17.9 463 110 1 17  75   260 23.1 
XVIII Precision equipment 0.8 266 243  16  1   6 17.5 
XIX Arms and ammunition 14.2 26 2       24 15.4 
XX Misc. manufactured articles 10.0 218 88  26  17   87 13.9 
XXI Works of art, etc. 4.5 10 6  3     1 5.0 
Total 7.8 10,389 6,018 273 454 8 1,054 21 5 2,556 19.2 
Note: Based on HS 2007 nomenclature. 
 Only tariffs falling under HS Chapters 1-97 is included. 
 For tariff lines subject to TRQs only the out-of-quot a duty is included in the tariff-related calculations. 
a Combination of ad valorem  and specific duties (for tariff lines with non ad valorem  components, only the ad valorem  part 
of the rate was included in the cal culation of the tariff averages). 
Source:  WTO estimates based on data provided by Malaysia. 
 
 
30. Chart III.3 shows a comparison of average du tiable rates in those HS Sections where 
preferential duties remain.  The comparison is made  between Malaysia's average preferential and 
MFN rates for lines which remain subject to prefer ential duties only.  As it can be seen from the 
Chart, average preferential duti es are, for most HS Sections, lower than the corresponding MFN 
duties indicating preferential tariff reductions;  the average reductions across these HS Sections varies from 1.7 to 25 percentage points.  With respect to HS Sections VIII and XIX the average preferential 
rate mirrors the MFN rate.  Table AI.6 in the Anne x provides the average of Malaysia's dutiable rates 
detailed by HS Chapter. 
 WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 17 
 
 
  0 5 10 15 20 25 30 35 40XXIXXXIXXVIIIXVIIXVIXVXIVXIIIXIIXIXIXVIIIVIIVIVIVIIIIIIChart III.3
Malaysia:  Average of dutiable rates, by HS Section
HS Section  
Note: For tariff lines with non ad valorem components, only the ad valorem part of alternate rates are included in the calculati on.
Source :  WTO Secretariat estimates, based on data provided by Malaysia.Average rate of duty (%)
MFN Preferential
 
 
31. Some of the tariff lines retaining duties are s ubject to progressive tariff reductions under the 
Agreement;  Malaysia has scheduled such reductions  with respect to 1,422 tariff lines corresponding 
to 13.7% of its tariff schedule and amounting to 1.6% of imports from Pakistan (See Table III.9). 
Table III.9 – Malaysia:  Tariff reduction commitments under the Agreement and corresponding average trade 
Duty phase-out 
period Number 
of lines % of total lines in Malaysia's 
tariff schedule Value of Malaysia's imports 
from Pakistan (2005-2007) 
in million US$ % of Malaysia's total 
imports from Pakistan 2005-
2007 
2009 14 0.1 0.2 0.2 
2010 864 8.3 0.2 0.4 
2011 541 5.2 0.6 1.0 
2014 3 0.0 0.0 0.0 
Total 1,422 13.7 1.0 1.6 
Source:   WTO estimates based on data provided by Malaysia. 
32. Chart III.4 shows the average rates by HS Secti on of the tariff lines benefiting from to tariff 
reduction;  the reduced tariff rates range from 5% to 20%  reflecting tariff reductions varying from 5 to 
10 percentage points.   
 WT/COMTD/RTA/3/1 
WT/REG265/1 Page 18  
 
 
  0 5 10 15 20 25 30XXIXXXIXXVIIIXVIIXVIXVXIVXIIIXIIXIXIXVIIIVIIVIVIVIIIIIIChart III.4
Malaysia:  Average rates of tariff  lines reductions by HS SectionHS Section  
Source :  WTO Secretariat estimates, based on data provided by Malaysia.Average rate of duty (%)
MFN Preferential
 
 
B. RULES OF ORIGIN  
33. Disciplines regarding rules of origin and custom s procedures are set out in Chapters 3 and 4 
respectively.  Article 20 contains definitions relating to rules of origin while Articles 21 to 31 contain 
the substantive rules;  the product specific rules of origin are contained in Annex 2.  Certificate of 
origin and the procedures designed to implement the rules of origin are set out in Articles 32 and 33 
and Annexes 3 and 4 respectively.  Customs pr ocedures and cooperation on customs matters are 
addressed in Articles 34 to 51 of Chapter 4.   
34. Goods imported by a Party qualify for preferential treatment if they conform to the origin 
criteria set out in Article 21.   
35. general requirements for a good to be considered an originating good of a Party (Article 21) 
are that: 
(a) it is wholly obtained or produced entirely in the territory of the exporting Party14;   
(b) it meets, in the case of not wholly obtained or produced goods, the criteria of either a 
value content (VC) or a change of tariff classification (CTC);  or 
                                                      
14 This concept applies to goods that are born, raised, harvested, picked, gathered, hunted, fished or 
mined in the territory of a Party; goods of sea-fishing and other goods taken by the vessels of the Party from the 
high seas or goods produced on board factory ships of the Party;  goods lawfully taken from the waters, seabed 
or beneath the seabed outside the territorial waters of th e Party;  and articles collected in the territory of the 
Parties which cannot be restored and destined for disposal or recovery of parts of raw material or for recycling 
purposes.  The detailed requirement are contained in Article 22. WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 19 
 
 
  (c) it is produced entirely in the Party using non-originating materials which satisfy the 
product specific rules of Annex 2. 
36. The general rule of origin under the Agreement for goods that are not wholly obtained is to 
satisfy an VC criteria of: a) a minimum domestic content of 40%; or b) a CTC at the HS Heading 
(4-digit) level.  In a few case, specific rules appl y setting out the criteria that non-originating materials 
have to meet for a good incorporating such materi als to acquire originating status.  The products 
specific rules are listed in Annex 2 and apply to  a limited range of products under HS Sections 
I (Animals), II (Vegetables Produc ts), III (Animal or Vegetable Fa ts and Oils), IV (Prepared 
Foodstuffs), IX (Textiles), XVI (Machinery), and XX (M iscellaneous).  The specific rules are detailed 
at the HS Heading (4-digit) and in a few cases HS Subheading (6-digit) level.  The main rule that 
applies is for the good to be wholly obtained or produ ced in the territory of the exporting Party (WO);  
in other cases the CTC criterion applies and it ma y require a change of HS Chapter (CC);  
HS Heading (CTH);  or HS Subheading (CTSH).  A technical rule (TR) applies to HS Chapters 50 and 51;  this requires that the good is dyed or prin ted and is subject to at least two preparatory or 
finishing operations listed in note 1 to Annex 2 (S ee Table AII.1 in the Annex for a synopsis of the 
detailed rules).   
37. Article 24 provides for the partial cumulation of  materials among the Parties.  According to 
this rule, originating goods from one Party whic h are used by the other Party as materials for a 
finished good, will be considered as originating in that Party provided that their aggregate content in 
the final good is not less than 40%.
15  Article 26 lists the minimal ope rations and processes that do not 
confer origin such as preservation of products, cl eaning, packing and repacking while Article 27 sets 
out the rules applicable to the transit of goods th rough non-parties.  Additional rules in Articles 28-31 
clarify how certain materials and operations (packi ng materials and containers;  accessories, spare 
parts and tools;  indirect materials;  identical a nd interchangeable materials) are to be treated/valued 
when determining the origin of goods. 
Box III.1  Rules of Origin:  Basic Features at a Glance 
• Regime-wide rule of origin methodology: 
− Wholly obtained or entirely produced goods;  
− RVC of 40% or CTC at the HS Heading (4-digit) level 
• Product specific rules criteria: 
− Wholly obtained or entirely produced goods; 
− CTC at the chapter, heading, or subheading level; 
− Technical rule for textile products classified under HS Chapters 50 and 51 
• Partial bilateral cumulation 
 
C. EXPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
38. There are no provisions in the Agreement concerning export duties an charges on goods. 
                                                      
15 By aggregate content it is meant value of inputs plus domestic value addition. WT/COMTD/RTA/3/1 
WT/REG265/1 Page 20  
 
 
  D. R
EGULATORY PROVISION S ON TRADE IN GOODS  
1. Standards 
(a) Sanitary and Phytosanitary Measures 
39. Chapter 6 sets out the provisions applying to sanitary and phytosanitary measures (SPS).  Its 
main objective is to facilitate trade between the Parties by providing a framework for cooperation on 
bilateral SPS matters including initiatives such  as bilateral recognition of equivalence and 
harmonisation based on international standards, guidelines and recommendations.  The Chapter does 
not contain any substantive provisions except reaffi rming the Parties' rights and obligations under the 
WTO Agreement on Sanitary and Phytosanitary Measures (Article 58). 
40. For the purposes of this Chapter, the Parties have designated focal points.16  Their tasks 
include: monitoring the implementation and administra tion of the Chapter;  enhancing communication 
between the Parties' agencies responsible for SPS matters;  promoting the use of international 
standards in the Parties' adoption and application of SPS measures;  and addressing SPS matters that 
may arise between the Parties.  The Parties may establish by mutual con sent a technical working 
group to deal with SPS matters that cannot be clar ified or resolved through the focal points;  the 
proposals of the technical working group may form th e basis for the recognition of equivalence of the 
Parties' respective SPS requirements.  The di spute settlement procedures provided under the 
Agreement do not apply to any disputes arising under this Chapter;  these are to be settled amicably 
through consultations by the technical working group and, should that fail, by the Joint Committee. 
(b) Technical Barriers to Trade 
41. Chapter 7 sets out the provisions applying to tec hnical barriers to trade (TBT).  The Chapter 
does not contain any substantive provisions except reaffirming the Parties' rights and obligations 
under the WTO Agreement on Technical Barriers to Trade (hereafter TBT Agreement).  The Chapter 
seeks to strengthen cooperation between the Pa rties aimed at achieving full and effective 
implementation of the TBT Agreement.  To this end,  the Parties' competent authorities in the area of 
technical regulations, standards and conformity assess ment procedures are encouraged to cooperate in 
reinforcing international standards as a basis for tech nical regulations and the exchange of information 
on technical regulations and conformity assessment procedures.  Article 65 requires the Parties to 
utilize international standards as a basis for c ooperation in technical regulations, standards and 
conformity assessment procedures while Article 66  requires them to use existing regional and 
international mutual recognition arrangements in relation to acceptance of conformity assessment 
procedures.  For the purposes of this Chapter, th e Parties agree to establish focal points with the 
objectives of facilitating technical consultations between the Parties on TBT matters;  enhancing 
cooperation in conformity assessment procedures;   facilitating cooperation between the Parties' 
regulatory authorities, accreditation agencies, a nd conformity assessment bodies;  and exchange 
information in relation to standardisation, techni cal regulations, standards and conformity assessment 
procedures.  
                                                      
16 Focal points are in the case of Malaysia, the Secr etary General of the Ministry of Agriculture and 
Agro-based Industry;  and in the ca se of Pakistan, the Secretary of th e Ministry of Food, Agriculture and 
Livestock. WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 21 
 
 
  2. Trade remedies 
42. Chapter 5 lists the types of trade remedies permissible under the Agreement and outlines the 
rules and procedures for administering such meas ures.  These are: global and bilateral safeguard 
measures, anti-dumping and subsid ies and countervailing measures. 
(a) Global safeguard actions 
43. The Parties retain their rights and obliga tions under Article XIX of GATT 1994 and the 
WTO Agreement on Safeguards.  Actions taken pursu ant to such provisions are not subject to the 
dispute settlement mechanism provided in Ch apter 12 of the Agreement (Article 55). 
(b) Bilateral safeguard actions17 
44. For trade between the Parties Article 54 provid es for the application of bilateral safeguard 
measures on originating goods.  The imposition of safeguard measures is allowed if, as a result of the 
reduction or elimination of customs duties under the Agreement, an originating good is imported in 
such increased quantities, either in absolute terms or relative to dom estic production, and under such 
conditions as to cause serious injury or threat thereof to the domestic industry producing a like or 
directly competitive good.  In such cases, the importi ng Party may (a) suspend the further reduction of 
customs duty on the originating good;  or (b) increase the duty rate to a level not exceeding the applied MFN rate in effect when the safeguard action is taken. 
45. The measure may only be applied following an  investigation by the Party's competent 
authorities in accordance with Articles 3, and 4.2 of  the WTO Agreement on Safeguards.  Prior to the 
application of such a measure, a Party is required to inform the other Party in writing of the initiation 
of an investigation, making a finding of serious injury or threat thereof, and the decision to apply or 
extend a bilateral safeguard measure;  that Party must also provide adequate opportunity for prior 
consultations with the other Party with a view to reviewing the proposed measure and reaching an 
agreement on the level of compensation.  The inv estigation is to be completed within one year 
following the date of its initiation and terminated  promptly without any safeguard measure being 
applied if imports of the origin ating good represent less that 8% of total imports.  The maximum 
duration of a measure is two years plus one year  extension and will terminate, notwithstanding its 
duration, at the end of the transition period of the good in question;  the latter is understood as five 
years from the completion of the tariff reduction or  elimination provided under the Agreement.  
Bilateral safeguard measures cannot be applied to goods which are s ubject to a global safeguard;  any 
existing bilateral safeguard measur e must be terminated before a global safeguard may be taken 
against any affected good. 
46. The Party proposing to apply a bilateral safeguard  measure has to provide to the other Party 
mutually agreed adequate means of trade co mpensation in the form of concessions having 
substantially equivalent trade eff ects or equivalent to the value of the additional duties expected from 
the safeguard.  If the Parties are unable to agree on the compensation within 30 days following 
commencement of the consultations , they will seek the good offices of the Joint Committee prior to 
any suspension, by the Party against who the measur e is taken, of duty concessions equivalent to the 
bilateral safeguard measure.  The right of suspen sion cannot be exercised during the first year of 
                                                     
 
17 In applying bilateral safeguard measures, the Parties adopt the rules for the application of safeguard 
measures, including provisional ones, as provided under the WTO Agreement on Safegua rds.  Such provisions, 
with the exception of quantitative restriction measures se t out in Article 5 and Articles 9, 12, 13 and 14, are, 
mutatis mutandis, incorporated into and fo rm an integral part of the Agreement. WT/COMTD/RTA/3/1 
WT/REG265/1 Page 22  
 
 
  effect of the bilateral safeguard measure provided that such measure conforms to the provisions of 
Article 54. 
Table III.10 - Synopsis of PMCEPA  bilateral safeguard measures  
Description of the bilateral safeguard measure 
Trigger • Rise in imports in absolute term s or relative to domestic production 
Criteria  • Serious injury or threat thereof to a domestic industry 
Measures • Suspension of further duty reduction; 
• Increase in duty rate not exceeding the applied MFN rate 
Timing • The maximum duration of a measure is three years (two years plus one year extension) 
Conditions 
or 
limitations  • Written notice of: a) institution of a proceeding;  b) finding of  serious injury or threat thereof;  and c) decision to 
apply or extend a measure 
• Provision of adequate opportunity for prior consultations 
• A measure may only be applied after an investigation has been carried out – an investigation must be completed 
within one year of its initiation and be  terminated promptly if imports of the originating good represent less than 
8% of total imports 
• Requirement to provide compensation 
• Retaliation is permitted in the form of  suspension of duty concessions equiva lent to the safeguard measure where 
the Parties fail to agree on the compensation 
Source: The Text of the Agreement  
 
(c) Anti-dumping 
47. The Parties retain their rights and obligations  under Article VI of the GATT 1994 and the 
Agreement on Implementation of Article VI of the GATT 1994 in Annex 1A to the WTO Agreement 
(Article 52). 
(d) Subsidies and countervailing measures 
48. The Parties retain their rights and obligati ons under Article VI and XVI of the GATT 1994 
and the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement 
(Article 53). 
3. Restrictions to safeguard the balance of payments 
49. Article 18 authorizes the Parties to take measures to safeguard the balance of payments in 
accordance with the conditions established under Artic le XII and Section B of Article XVIII of the 
GATT 1994, and the Understanding on the Balan ce-of -Payments Provisions of GATT 1994 which 
are, mutatis mutandis, incorporated into and made part of the Agreement. 
4. Customs-related procedures 
50. Customs procedures related to rules of origin  are addressed in Article 33 of Chapter 3 and 
detailed in Annex 4.  These lay out the operational procedures for the issuance and verification of the 
certificate of origin.  A claim for preferential treatment must be suppor ted by a certificate of origin in 
the prescribed form in Annex 3 issued by the designated government authority of the exporting 
Party.18  Such a claim must be initiated by the exporter or manufacturer through a written request to 
the issuing authority for pre-export verification of the origin of the products;  the result of the 
verification constitutes supporting evidence when appl ying for the certificate of origin due at the time 
of exporting the products.  The requirement of a certificate of origin may be waived where the customs value of the goods does not exceed US$200 FOB. 
                                                     
 
18 The certificate of origin must  be issued in accordance with th e rules contained in Annex 4 and 
conform to the specimen contained in Annex 3. WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 23 
 
 
  51. Where in doubt as to the authen ticity or accuracy of a certificate or origin, the importing Party 
may request a retroactive check on the origin of the good; the competent governmental authority of 
the exporting Party has six months to reply (Rule 15, Annex 4).  The importing Party may suspend the 
granting of preferential treatment while awaiting the results of the verification.  The Parties' 
competent authorities are to cooperate in cases of suspected fraudulent acts in connection with the 
certificate of origin;  and cooperate in the case of  dispute concerning any matters relating to the 
clearance of goods under the Agreement (Rule 19 and 20, Annex 4). 
52. Chapter 4 of the Agreement deals with custom s procedures and cooperation.  Its objectives 
are to simplify and harmonize customs procedur es;  ensure consistency, predictability and 
transparency in the application of customs laws a nd regulations;  ensure the efficient clearance of 
goods;  facilitate trade;  and promote cooperation a nd exchange of information related to customs 
matters (Article 35).  To this end,  Chapter 4 cont ains provisions requiring the Parties to:  facilitate the 
customs clearance of goods through th e use of information and comm unication technology,  simplify 
customs procedures and harmonize them to the extent  possible with relevant international standards 
(Article 38);  facilitate the procedures for the tem porary admission of goods (Article 39);  promote 
cooperation and capacity building on customs matters (Article 40);  mutual assistance and exchange 
of information in matters such as application and enforcement of customs laws, information and 
communications technology, risk management, illicit trafficking, and intellectual property rights 
(Articles 41 to 49).  A Sub-Committee on Customs Procedures is established for the implementation 
and operation of Chapter 4 (Article 50). 
IV. PROVISIONS ON TRADE IN SERVICES AND INVESTMENTS 
A. SCOPE AND DEFINITIONS  
53. Chapter 8 sets out the provisions governing cross- border trade in services among the Parties 
while Chapter 9 sets out the provisions governing investments.  Chapter 8 applies to measures 
adopted or maintained by a Party affecting trade in services19 by service suppliers of the other Party 20 
whereas Chapter 9 applies to measures adopted or ma intained by a Party relating to investors of the 
Parties and investments of investors of one Party in the other Party.21  The provisions of Chapter 9 
apply to existing investments at the entry into fo rce of the Agreement as well as future investments 
(Article 87). 
54. The provisions of Chapter 8 do not apply to: services supplied in the exercise of governmental 
authority;  measures related to government procurem ent;  subsidies or grants;  measures affecting air 
traffic rights;22  cabotage in maritime transport services;  s ubsidies or grants provided by a Party or a 
state enterprise;  measures affecting natural pe rsons of a Party seeking access to the employment 
market of the other Party or measures regarding nationality, residence or employment on a permanent 
basis (Article 68.2).  As for investments, Chapter 9 does not apply to claims and disputes arising out 
                                                      
19 Such measures include the purchase, payment or use of a service;  the access to and the use of 
services which are required by a Party to be offere d to the public generally;  and the presence, including 
commercial presence, of persons from a Party for the supply of a service in the territory of the other Party 
(Article 69(i)). 
20 The provisions of Chapter 8 also  apply to the supply of financia l services in accordance with the 
provisions listed in Annex 5 to the Agreement. 
21 "measures adopted or maintained by a Party" refers  both in the case of services and investments to 
central, regional or local governments and authorities of the Parties; or non -governmental bodies in the exercise 
of powers delegated by central, regional or local governme nt or authorities.  The term regional refers to a state 
of Malaysia and a province of Pakistan. 
22 Except for aircraft repair and maintenance services; selling and marketing of air transport services; 
and computer reservation system services. WT/COMTD/RTA/3/1 
WT/REG265/1 Page 24  
 
 
  of events which occurred prior to th e entry into force of the Agreement (Article 87.3).  In addition, the 
Agreement contains some general exceptions related to trade in services and investments 
(See paragraph 100). 
55. General definitions on trade in services and investments are contained in Article 69 and 
Article 88 respectively.  Trade in services is define d as the supply of a service through the four modes 
of delivery provided by the GATS.
23  A service supplier is defined as 'any person that supplies a 
service'.  A natural person is a person who under the law of the Parties is a citizen of Malaysia or 
Pakistan or has the right of permanent residence in Malaysia or Pakistan.  A juridical person of a Party 
refers to a legal entity constituted or organized und er the law of a Party a nd engaged in substantive 
business operations or, in the case of the supply of  a service through commercial presence, a legal 
entity owned or controlled by a natural or juridical  person of a Party.  Investment is defined in 
Article 88 as every kind of asset owned or controlle d by an investor of a Party;  the latter is 
understood to be a natural person or an enterprise of a Party. 
56. The liberalization of trade in services provided in  Chapter 8 follows a "positive-list" approach 
whereby the Parties accord to each  other's services suppliers, national treatment and market access in 
the sectors and sub-sectors listed in their schedules of  specific commitments (Annex 5) and subject to 
the conditions and limitations listed therein;  te rms, limitations, and conditions on market access, and 
conditions and qualificatio ns on national treatment are limited to existing non-conforming measures 
(Article 73).  In the case of investments, the Par ties have adopted a "negative-list approach" whereby 
national and MFN treatment and the prohibition of performance requirements apply to all sectors 
except for the non-conforming measures existing on the da te of entry into force of the Agreement and 
to the sectors, sub-sectors or activities for which the Parties may adopt new or maintain existing 
measures subsequent to the Agreement's entry into force (Annex 7).  In the event of inconsistency 
between Chapter 8 and 9, Chapter 8 shall prevail to th e extent of inconsistency with respect to matters 
covered by Articles 89, 90 and 92;  with respect to  matters not covered under these Articles, Chapter 9 
shall prevail to the extent of inconsistency. 
B. DENIAL OF BENEFITS  
57. Under Articles 84 and 101, a Party may deny the benefits of Chapters 8 and 9 to a service 
supplier or an investor of the other Party if that service supplier/investor is an enterprise or juridical person "owned" or "controlled" by persons/investors of a non-party, and the denying Party does not 
maintain diplomatic relations with  the non-party or adopts or maintains measures with respect to the 
non-party that prohibit transactions with the enterpri se or juridical person that would be violated or 
circumvented if the benefits of the relevant Chap ters were accorded to the enterprise or juridical 
person.  Subject to prior notification and consultation,  a Party may deny the benefits of Chapter 8 to a 
service supplier of the other Party where the service is being supplied by a juridical person that is 
owned or controlled by persons of a third State or of the denying Party and the juridical person has no 
substantive business operations in the territory of th e other Party.  With respect to investments, the 
benefits of Chapter 9 may be denied to an investor  of the other Party that is an enterprise owned or 
controlled by investors of a third State;  and to an investor of the other Party which has no substantial 
investment or business activities in the Party u nder whose laws it is c onstituted or organized.
24 
                                                      
23 Article 69(s) reproduces the GATS modes of supply. 
24 For the purposes of Article 84 and 101, a juridical person or enterprise is "owned" if 50% of its 
equity interest is beneficially owned by the person or investor, while a juridical person or an enterprise is "controlled" by a person or investor if the person or investor has the power to name a majority of its directors or 
otherwise to legally direct its ac tions (Articles 69(a) and 88(a)). WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 25 
 
 
  C. GENERAL PROVISIONS ON TRADE IN  SERVICES AND INVESTMENTS  
1. Market access 
58. The Parties agree to accord to services and servi ces suppliers of the other Party treatment no 
less favourable than that provided for in the Partie s' schedules of specific commitments in Annex 5.  
In sectors where market access commitments are unde rtaken, Article 70 prohibits the Parties from 
adopting or maintaining any of the six types of  limitations listed in Article XVI of the GATS. 
2. National treatment and MFN 
59. Article 71 provides for the application of nationa l treatment to the sectors listed by the Parties 
in Annex 5.  Accordingly, and subject to the cond itions and qualifications set  out therein, each Party 
accords to services and service supp liers of the other Party treatment no less favourable than that it 
accords to its own services and service suppliers. 
60. Article 75, on the other hand, provides for an  MFN principle whereby each Party accords to 
services and service suppliers of another Party treatme nt no less favourable than that it accords, in like 
circumstances, to services and service suppliers of a non-Party.25  The MFN principle does not apply 
to measures with respect to sectors, sub-sectors and activities listed by the Parties in Annex 5;26  
nevertheless, should a Party schedule commitments w ith respect to Annex 5 as part of an agreement 
on trade in services with a third State, it will cons ider extending to the other Party, upon request by 
the latter, treatment no less favourable than that  accorded to the third State (Article 75.3). 
61. As regards the Chapter on Investment, Articl es 89 and 90 provide respectively for national 
and MFN treatment requiring each Party to accord to  investors of the other Party and to their 
investments treatment no less favourable than that it accords in like circumstances to its own investors 
and to their investments and to investors of a thir d State and to their investments with respect to 
investment activities.27  Article 90 does not apply to treatment  accorded under bilateral, regional or 
multilateral international agreements in force or signed prior to the entry into force of the Agreement.   
62. With respect to prohibition of performance requi rements, the Parties reaffirm in Article 92 
their commitments to the WTO Agreement on Tr ade-Related Investment Measures (TRIMS) and 
incorporate its provisions as part of Chapter 9.  Th e Parties also agree to convene consultations with 
the other Party, upon the latter request, on any matter re lated to Article 92 that affects the other Party's 
investors and their investments. 
3. Movement of natural persons 
63. Chapters 8 and 9 contain several provisions d ealing with the movement of natural persons, 
particularly, the entry and temporary stay of natu ral persons of the Parties for business purposes.  
These provisions do not apply to measures af fecting natural persons seeking access to the 
employment market of a Party, or measures rega rding nationality or citizenship, or residence or 
employment on a permanent basis (Article 68.2(f)) nor do they prevent a Party from applying measures to regulate the entry and temporary stay of  natural persons from the other Party, including 
measures necessary to protect the integrity of its borders provided that they are not applied in a 
                                                     
 
25 Unlike Article 70, MFN treatment is not limited to the sectors inscribed in Annex 5. 
26 For Malaysia the listed MFN exemptions apply in all sectors and advertisi ng services.  As for  
Pakistan, Annex 5 lists MFN exemptions in banking and other financial services and telecommunication 
services-international services. 
27 'Investment activities' includes the establishment, acquisition, expansion, management, operation, 
maintenance, use, possession, liquidation, sale, or  other disposition of investments (Article 75). WT/COMTD/RTA/3/1 
WT/REG265/1 Page 26  
 
 
  manner so as to nullify or impair the benefits accrui ng to the other Party under the terms of a specific 
commitment (Article 68.3). 
64. The Parties grant entry and temporary stay to each others' natural persons in accordance with 
the specific commitments scheduled in Annex 5 and subject to the conditions and limitations listed 
therein.  Pakistan's horizontal commitments on m ode 4 in Annex 5 concern the following categories 
of natural persons:  intra-corporate transferees;   temporary business visitors;  contractual service 
suppliers;  independent professionals;  and natura l persons having skills inter alia  in information 
technology, construction engineer ing, tourism, educational services, health related services, and 
sporting services who enter to impart training.  In the case of Malaysia, the categories covered are 
intra-corporate transferees and other natural persons falling under the following categories:  
specialists or experts; professionals; and business vi sitors.  The Parties cannot impose or maintain 
quantitative restrictions on these categories of persons  unless otherwise specified in Annex 5.  Those 
seeking entry and temporary stay may be required to ob tain a visa, as is the case with business visitors 
entering Pakistan, and must comply with the immigrat ion laws and regulations of  the other Party.  The 
period that persons in these categories may stay in  the other Party is summarized in Table IV.1.  
Table IV.1 
Entry and temporary stay of natural person under the PMCEPA 
Pakistan Malaysia 
Category 
Period of stay Extension Period of stay Extension 
Intra-corporate transferees Up to three years  Yes Total period of stay 
cannot exceed five years Yes 
Business visitors  Yes 90 days Yes 
• Business visitors Up to six months    
• Service sales persons Up to one year    
Contractual services suppliers Up to one year Yes   
Independent professionals Up to one year Yes   
Other professional services 30 days to one year Yes Total period of stay 
cannot exceed five years Yes 
Source : Annex 5 of the Agreement. 
65. With respect to investments, Article 102 seeks to facilitate the movement of investors by 
requiring the Parties to: a) grant entry, temporary st ay and authorisation to work to investors, and 
executives, managers and members of the board of dir ectors of an enterprise from the other Party, for 
the purposes of investments in the former Party whic h commit a substantial amount of capital or other 
resources;28  and b) establish and make publicly availa ble the requirements and application procedures 
for a renewal of the period of temporary stay, a chan ge of status or the issuance of a work permit for a 
natural person from the other Party w ho has been granted entry and temporary stay with respect to an 
investment. 
D. LIBERALIZATION COMMITMENTS ON TRADE IN SERVICES  
66. The Parties' schedules of specific commitments are contained in Annex 5.  Each schedule 
specifies the terms, limitations and conditions for market access;  conditions and qualifications for 
national treatment;  undertakings relating to add itional commitments;  and where appropriate, the 
                                                      
28 This provision is subject to the Parties' immigra tion laws and regulations relating to entry, stay and 
authorisation to work. WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 27 
 
 
  time-frame for implementation of such commitments (Article 73).29  With respect to sectors or 
sub-sectors where the specific commitments are unde rtaken and set out in Annex 5 any terms, 
limitations, conditions and qualifications referred to in Article 73.2(a) and (b) are limited to existing 
nonconforming measures.  Any change or modificati on by a Party with respect to the conditions 
applying to the sectors or sub-sectors set out in Annex 5 are not to result in the decrease of benefits 
applied to service suppliers of the other Party imme diately before such change or modification comes 
into effect (Article 73.4). 
67. The Parties may negotiate commitments in measures affecting trade in services not subject to 
scheduling under market access and national tr eatment provisions, including those regarding 
qualifications, standards or licensing matters  (Artic le 72).  Likewise a Party may modify or withdraw 
any commitment in its schedule in Annex 5 provid ed it notifies the other Party of its intent to 
modify/withdraw a commitment and that it makes any necessary compensatory adjustments to its 
schedule.  Should the Parties not reach an ag reement on the necessary compensatory adjustments 
within three months from the notification of chan ges, the affected Party may refer the matter to 
arbitration in accordance with the proced ures set out in Chapter 12 (Article 74). 
68. The Parties agree to consult within three years after entry into force of the Agreement with a 
view to include new services sectors and sub-sect ors and review progress made on facilitating the 
mutual recognition of professional qualifications  in accordance with Article 77 (Article 85). 
1. Pakistan30 
(a) Horizontal commitments / exceptions 
69. Pakistan's horizontal commitments in modes 3 and 4 in its GATS schedule are replicated and 
expanded upon in the Agreement.  Unless otherwis e indicated in its sector specific commitments, 
Pakistan has eliminated with respect to commercial presence (mode 3) the horizontal limitation of 
maximum foreign equity participation of up to 51%;  in mode 4 it has expanded market access 
opportunities concerning entry and temporary stay fo r a broad category of natural persons.  These 
include: intra-corporate transferees, comprising ma nagers, executives, specialists, business visitors, 
business persons and services sale persons;  contractua l services suppliers;  independent professional;  
natural persons skilled in IT, constr uction engineering, tourism, edu cational services, health related 
services, and selected sporting services to impart training on a temporary basis.31  With respect to 
national treatment, the horizontal limitation of aut horization required under mode 3 for the acquisition 
of real-estate by non-Pakistani entities/persons has been eliminated. 
(b) Sector specific commitments / exceptions 
70. Pakistan has added several new sectors and sub-sectors to its existing GATS commitments.32  
With respect to existing and new commitments, it has raised, under mode 3 for market access, the 
share of foreign equity participation to 60% in all sectors, except in the integrated engineering 
services sub-sector (up to 40%).  With respect to na tional treatment, Pakistan applies in several new 
                                                      
29 The services sector description is based on the WTO Services Sectoral Classification List 
(see WTO Document MTN.GNS/W/120) as well as the UN's Provisional Central Production Classification 
(CPC). 
30 Table AIII.1 in the Annex summarizes Pakistan's commitments under the Agr eement as compared to 
its GATS schedule. 
31 Terms and conditions applying to each category ar e set out in Pakistan's schedule.  See also 
Table IV.1 for details on maximum stay and possible extensions. 
32 Sectoral coverage does not in all cases extend to the total range of services covered under each 
sector;  in such cases the sector is marked with "**". WT/COMTD/RTA/3/1 
WT/REG265/1 Page 28  
 
 
  sub-sectors limitations under for Mode 3 in the form of: (a) residency requirement for natural persons;  
and/or (b) the fulfilment of all requirements a nd conditions applicable only to foreign entities. 
71. For business services, Pakistan has added several new sub-sectors.  With respect to existing 
GATS commitments, Pakistan has raised under mode 3 the percentage for foreign equity participation 
to 60%;  fully liberalized mode 1 in most cases a nd mode 2 in several others both with respect to 
market access and national treatment. 
72. For communication services, Pakistan has added courier services and under 
telecommunication services mobile communication services.  With respect to the latter, the mandatory license requirement for all services has been remove d from the general conditions applicable to the 
GATS schedule.  Under market access, mode 3 has b een liberalized subject to the 60% foreign equity 
participation rule while under nationa l treatment modes 1 and 3 have b een liberalized where they were 
previously unbound in the GATS.  With resp ect to licenses in the packet-switched and 
circuit-switched data sub-sectors, further to the privatisation of the Pakistan Telecommunication 
Company Ltd (PTCL) the granting of new licenses fo r basic telephony has been put on hold for seven 
years from the date of take over of PTCL by M/S Etisalat.  As for licences for the 'trunked radio 
service' sub-sector these will be granted on a compe titive basis by the Pakistan Regulatory Authority. 
73. Under the construction sector, modes 1 and 2 have been liberalized in respect of both market 
access and national treatment;  mode 3 under market access is subject to partnership and/or joint 
venture with Pakistani engineers or companies and to  the 60% foreign equity participation rule.  The 
new sub-sectors committed to by Pakistan ar e subject to the same conditions as above. 
74. In financial services, Pakistan's commitments are subject to some general requirements and to 
the 60% foreign equity participation rule with  respect to commercial presence under market access.
33  
In addition to the latter, under m ode 3 for insurance services foreign companies are required to invest 
at least US$3 million and raise an equivalent am ount from the market.  With respect to banking 
services, Pakistan has expanded its commitments under mode 3 with respect to the acceptance of 
deposits and other repayable funds from the public  through measures such as removing limitations on 
the volume of such deposits and funds mobilized fro m foreign banks;  committing to entry into the 
Pakistani market by foreign banks through branch es with tier one capital of US$5 billion or more, and 
to banks belonging to countries of regional bodies at governmental level (e.g. ECO and SAARC, etc.);  
a licence from the Central Bank is required to undertake commercial banking and up to 50 branches of foreign banks may open subject to approval.  Unde r national treatment, the share held by locals and 
foreigners are transferable only if the in cumbent meet the prescribed fit and proper 
criteria/requirements stipulated in the guidelines for setting up commercial ba nks.  The fit and proper 
test also applies to mode 4 (both market access and national treatment) for employment of foreign 
nationals in banks and fi nancial institutions operating in Pakist an.  These mode 4 limitations also 
apply to the lending sub-sector. 
75. Other commitments include the addition of sever al new sectors;  these are: distribution 
services;  education services;  environmental services;  recreational, cultural and sporting services;  and transport services. 
                                                     
 
33 General requirements include entry requirements, domestic laws, guidelines, rules and negotiations, 
terms and conditions of the Ministry of Finance, State Bank of Pakistan, Security and Exchange Commission of Pakistan and of any other relevant national authority or body as the case, consistently with GATS Article VI and 
paragraph 2 of the Annex on Financial Services. WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 29 
 
 
  2. Malaysia34 
(a) Horizontal commitments / exceptions  
76. Malaysia's horizontal commitments and excep tions under the Agreement generally mirror 
those listed in its GATS schedule.  One exception is in respect of the acquisition of voting rights of a 
Malaysian corporation by foreign interests wher e the minimum value requiring approval has been 
raised from RM5 to RM10 million. 
(b) Sector specific commitments / exceptions 
77. For business services Malaysia has added urban planning services under professional services 
and data processing services under computer and relate d services.  Further commitments include those 
in relation to the modes of supply which have been either liberalized as is  the case for mode 3 for 
some sub-sector under computer and related servi ces;  partially liberalized market access in the case 
of mode 4 and national treatment for modes 1 and 2 under accounting, auditing and bookkeeping 
services;35  or modified or expanded in respect of so me specific requirements.  The latter includes 
raising the threshold for aggregate foreign interest s in a registered partnership to 40% for mode 3 
under accounting, auditing and bookkeeping servi ces, and taxation services;  including under 
architectural services temporary entry under mode 4 for two specialists/experts subject to registration 
requirements and domestic regul ations, and expanding entry under accounting, auditing and 
bookkeeping services in respect of intra-corp orate transferees by adding two additional 
specialists/experts for each firm;  expanding mode  3 under architectural and engineering services to 
allow foreign equity up to 30% for joint ventures in multi-disciplinary practices;  and, reducing the 
minimum number of beds in private hospitals fro m 100 to 70 as a condition for provision of medical 
speciality services under mode 4.   
78. For communication services, Malaysia has not added any new sub-sectors to its 
existing GATS commitments. However, in basic te lecommunications, it has reclassified its 
telecommunication services sector under: network facilitation services (NFP), network services (NSP) and applications services (ASP).  Each of these categor ies is associated with individual licences that 
specify the services that can be provided therein.
36  Modes 1 and 2 are unrestricted while for mode 3 
the provision of NFP and NSP services requires th e acquisition of shares in an existing licensed 
NFP(I) and NSP(I) operation/corporation;  the provi sion of ASP services takes place through a locally 
incorporated joint venture corporation with Malaysian individuals or  Malaysian controlled 
corporation or acquisition of shares in an existing licensed ASP(I) operator/corporation.  The foreign 
shareholding threshold is 30% for NFP(I) and NSP (I) and 49% for ASP(I).  Nationality requirements 
apply to the management of such companies;  mode  4 is unbound.  The mode 3 limitations referred to 
above also apply to value added telecommunications services.37   
79. For construction work, the Agreement relaxes ex isting limitations in mode 3 by raising the 
aggregate foreign shareholding in joint-venture corporations from 30% to  49% and by permitting 
foreign construction companies that are not locally  incorporated to carry out certain specified 
construction projects subject to compulsory sub-contracting to local sub-contractors. 
                                                      
34 Table AIII.2 in the Annex summarizes Malaysia's commitments under the Agreement as compared to 
its GATS schedule. 
35 The residence requirement for registration of 'other professionals' has been eliminated and limitations 
on national treatment in modes 1 and 2 have been eliminated but are subject to domestic regulations. 
36 The licenses are categorized as  NFP(I), NSP(I), and ASP(I). 
37 In the case of Value Added Services the cl ass licenses are NFP(C), NSP(C), and ASP(C). WT/COMTD/RTA/3/1 
WT/REG265/1 Page 30  
 
 
  80. With respect to distribution services, for whic h Malaysia has no commitments in the GATS, 
commitments have been taken in wholesale, retailing and franchising services with the only 
limitations in respect of mode 3 under market access requiring joint-ventures corporation with Malaysian individuals and/or controlled corporat ion with aggregate foreign shareholding in the 
joint-venture corporation not exceeding 70% (30% in  the case of franchising services).  In respect of 
wholesale and retailing services foreign involvemen t is prohibited in certain retailing services 
including supermarkets and newsagents.   
81. With respect to education services, for whic h Malaysia has no commitments in the GATS, 
commitments have been taken in higher educa tion services provided by privately funded higher 
education institutions;  modes 1 a nd 4 are unbound with a few exceptions
38 and mode 3 is limited to 
joint ventures with foreign equity not exceeding 49% and subject to an economic needs test, if 
necessary.39  With respect to national treatment, modes 1, 3 and 4 are unbound with a few 
exceptions.40 
82. In health related and social services, the a ggregate foreign shareholding in joint venture 
corporations has been increased from 30% to 40% for (mode 3) private hospital services.  Under 
tourism and travel related services, Malaysia has rai sed the foreign equity threshold for joint ventures 
with Malaysian companies to 49% for hotel,  tourist resort and restaurant services41 and travel agency 
and tour operator services and liberalized mode 1 for both market access and national treatment.  
Specific commitments have been added with respect  to hotel lodging services, convention centres and 
theme parks.  Further commitments have been adde d in maritime transport services with the inclusion 
of rental of cargo vessel with crew for internationa l shipping and maintenance and repair of vessels. 
83. Malaysia's horizontal commitments with respect  to financial services, including insurance, 
generally mirror those scheduled in the GATS a nd are in accordance with the Annex on Financial 
Services.  Changes include some relaxation of mode  4 requirements with respect to banks and direct 
insurance companies and the extension of commitments under Annex 5 to Islamic banks42 and takaful 
operators with respect to insurance services.43  In this respect horizontal commitments under mode 3 
include new licenses for international Islamic banks and for international takaful operators;  setting 
the threshold for entry into Malaysian-owned or controlled Islamic bank and takaful operators to a 
maximum aggregate foreign shareholding of 49%;  a nd liberalizing mode 4 for international Islamic 
                                                      
38 Mode 4 is unbound except for measures affecting the entry and temporary stay of the following 
categories of natural persons:  intra-co rporate transferee (senior managers a nd lecturers and experts), and others 
(professionals, business visitors and contractual service suppliers). 
39 Foreign equity of 51% will be considered subject to an additional economic needs test. 
40 Mode 4 is unbound except for the categories of natural persons referred to under market access. 
41 Mode 3 with respect to Hotel Lodging Services, Holiday Centre and Holiday Home Services, and 
Letting Services of Furnished Accommodation is subject to domestic regulations. 
42 The Islamic bank is defined as an entity that conducts Islamic banking business and holds a valid 
licence under the Islamic Banking Act 1983. Islamic banking business means banking business whose aims and operations do not involve any element which is not approved by the Religion of Islam. The term international 
Islamic bank means any company or an office of any fo reign institution which carries on international Islamic 
banking business and holds a valid licence under the Islamic Banking Act 1983. International Islamic banking business means Islamic banking business in currencies other than ringgit or such other Islamic banking business 
as the Central Bank may specify. 
43 The term takaful operator is defined as an entity that conducts takaful business and fulfils the 
requirements of the Takaful Act 1984. Takaful business is defined as Syariah compliant insurance scheme 
whose aims and operations do not involve any element which is not approved by the Religion of Islam and is in 
accordance with the Takaful Ac t 1984. The term international takaful operator means a company or a foreign 
institution that carries on takaful business in currencies other than ringgit as provided under the Takaful 
Act 1984. WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 31 
 
 
  banks and for international takaful operators.  In  terms of the specific commitments for banking and 
other financial services, besides extending exis ting commitments to Islamic banks, commitments 
include liberalizing mode 2 in some sub-sectors and in a few cases modes 3 and 4 for international Islamic banks;  regulatory limitations under mode 3 have been relaxed with respect to some sub-
sectors.  As for national treatment, the main change here is the elimination in several sub-sectors of 
limitations under mode 3 with respect  to branching.  Commitments with  respect to insurance services 
mirror those in the GATT except for mode 3 for reinsurance and retrocession – (life and non-life) 
where new licences have become unbound due to the issuance of new licences in these sub-sectors in 
2005.  
E. L
IBERALIZATION COMMITMENTS ON INVESTMENT  
84. The investment Chapter adopts a negative-list a pproach to the scheduling of liberalization 
commitments, such that the obligations of  national and MFN treatment, and performance 
requirements apply fully, except for sectors, sub- sectors or activities specified in Annex 7 for which 
the central or local government of a Party, a state of Malaysia or a province of Pakistan maintains a 
non-conforming measure.  These measures are subject to a "ratchet" clause (Articles 93.1(c) and (d)) 
meaning that if a Party unilaterally amends or repeals any existing non-conforming measure with the 
effect of making it more liberal, such libera lization is bound and becomes its new level of 
commitment towards the other Party. 
85. Annex 7 also sets out the sectors, sub-sectors or activities for which a Party reserves the right 
to adopt or maintain any measure not conforming with the national and MFN treatment obligations, 
and performance requirements (Article 93.2).  An y amendment or modification to an existing 
measure, or adoption of a new me asure relating to these sectors, sub-sectors or activities cannot be 
more restrictive than the measure applying immediately before such amendment, modification or adoption unless specifically indicated in Annex 7. 
86. Amendments to existing measures, or the a doption of new measures for sectors, sub-sectors 
or activities listed in Annex 7 are to be promptly notified to the other Party;  the notifying Party will 
hold consultations, upon request, with the other Part y with a view to achieving a mutually satisfactory 
outcome (Article 93.5).  The national and MFN treat ment obligations, and pr ohibition on performance 
requirements do not apply to government procuremen t and to measures affecting investments adopted 
or maintained pursuant to Chapter 8 to the extent that they relate to the supply of services through 
commercial presence (Article 93.7). 
87. Each reservation in Annex 7 contains the following:  the services sector and sub-sector to 
which the reservation relates;  the industry classi fication;  the obligation(s) against which a 
reservation is taken;  the leve l of government;  and the exis ting measure and its description. 
1. Pakistan 
88. In its Annex 7, Pakistan has taken a num ber of reservations on existing measures for 
20 sectors, sub-sectors or activities, mostly relating to  national treatment and to a lesser extent MFN 
treatment and performance requirements (See Table IV.2 );  14 of these reservations are at the central 
level of government, 1 at the regional level and 5 at  both levels of government.  In the same Annex, 
Pakistan has also taken a number of reservations for future measures in 9 sectors, sub-sectors or activities;  seven of these reservations are at the centr al level of government and 2 at the regional and 
central levels of government.  Pakistan reserves the right with respect to all of these reservations to 
make the existing or new measures more restrictive (See Table IV.3). WT/COMTD/RTA/3/1 
WT/REG265/1 Page 32  
 
 
  Table IV.2 - Existing non conforming me asures listed by Pakistan in Annex 7 
Sector, sub-sector or activity Reservation Description of existing measure 
NT Work visas for foreign nationals;  permission required for real estate 
NT/MFN/PPR All existing non-conforming measures of all provinces of Pakistan 
All sectors 
NT/MFN/PPR Right to adopt or maintain any measur e that accords differential treatment to 
parties to agreements signed prior to the date of entry into force of the 
Agreement;   post entry into force in th e case of agreements involving aviation, 
fisheries, maritime matters and telecommunications 
Export processing zones PPR Industries located in export processi ng zones may only export up to 20% of 
their total production to Pakistan 
Air services NT Controlling interests in local hands to operate domestic and international air 
services as Pakistan operators  
Radio-communications, 
communications and cable 
television NT Nationality requirement for the supply of  satellite TV, FM radio broadcasting 
and distribution services and for board of  directors of companies providing such 
services;  licenses for such services ca nnot be granted to companies owned or 
controlled by foreign nationals 
Fisheries NT Fishing restrictions (nautical miles) in Pa kistan's territorial waters and exclusive 
economic zone (EEZ);  nationality and regi stration requirement (for companies) 
for fishing licences;  some exceptions may apply 
Non-manufacturing sector NT In cases of foreign investments, the paym ent of franchise, royalty or technical 
fees is subject to quantitative limitations 
Social sector NT Minimum foreign equity investment requirement 
Infrastructure  NT Minimum foreign equity investment requirement 
NT Nationality requirement plus ownership li mitation of 25% of propriety interests 
in newspaper Print media 
NT Right to adopt any policy regarding owners hip or equity participation of foreign 
investors in newspapers, periodicals and news agencies 
Financial services (excluding insurance) NT Foreign banks having a global tier paid up capita of US$5 billion or more are 
allowed to conduct banking business in  branch mode and through a locally 
incorporated subsidiary with equity of up to 100%. Incorporation requirement in 
local company (max. 49% shareholding) for foreign corporate entity/body 
desirous of conducting banking business in Pakistan 
Financial services – Insurance NT Branch establishment requirement;  mi nimum paid-up capital for foreign/local 
insurance broker;  foreign corporate en tity/body desirous of conducting banking 
business in Pakistan must incorporate a company locally (max. 49% 
shareholding)  
Corporate agricultural farming NT Foreign inve stors are allowed to hold 100% equity in CAF 
Mining - oil, gas and mineral NT/MFN/PPR All the non-conforming measures contained in the policies, procedures, laws, 
rules of Pakistan as may be in force from time to time 
Communications NT All existing non confirming measures that are covered or contained under the 
Post Office Act 1898 
NT Domestic bidders are eligible for a speci fic percentage margin of preference in 
the comparison of their bids with those bidders who do not qualify for the 
preference as mentioned in Clause 32.3 a & b of World Bank Bid documents. Construction and engineering work 
NT Licence and joint-venture requirement fo r foreign constructor/operator wishing 
to perform engineering works in Pakistan 
Source: Annex 7 of the Agreement.  
 
 
  
 
  
 
  
 WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 33 
 
 
  Table IV.3 - Non conforming measu res listed by Pakistan in Annex 7 
Sector Reservation Description of measure 
Maritime transport 
services  NT/MFN/PPR Right to adopt or maintain any measure relating to the provisions of maritime 
transportation services and opera tion of Pakistan flag vessels 
Radio 
communications and 
communications NT/MFN Right to adopt or maintain an y measure that accords differential treatment to persons of 
other countries due to application of reci procity measures or through international 
agreements involving sharing of the radi o spectrum, guaranteeing market access, or 
national treatment.  Nationality requirement for senior management, members of the 
boards of directors of companies providi ng broadcasting or distribution services 
Communications-
cable television NT/MFN Right to adopt or maintain any measure that  accords equivalent treatment to persons of 
any country that limits owners hip by persons of the other Pa rty in an enterprise engaged 
in the operation of cable televi sions system in that country 
Engineering goods PPR Bidders tendering for engineeri ng goods produced in Pakist an shall be accorded price 
preference with respect to government procurement 
Financial services MFN Right to grant licences, on the basis of reci procity, to any non-party to the Agreement, 
which have accorded equivalent market access concessions to Pakistan’s banks. 
Agriculture farming NT Right to adopt or maintain any measure that  accords differential treatment to Pakistani 
investors 
Atomic energy NT/MFN/PPR Right to adopt or maintain any measure that  accords differential treatment to countries 
or companies under the applicable policies or laws or rules or any investment 
agreement or international agreement signed af ter the date of entry into force of this 
Agreement 
Mining : 
− oil, gas and 
mineral NT/MFN/PPR Right to adopt or maintain any measure that accords differential treatment in any 
existing investment agreement or contract in  force or signed prior to the signing of the 
Agreement 
Communications: 
− Postal services NT Wherever within Pakistan posts of Post al Communications are established by the 
Federal Government, the Federal Government shall have the exclusive privilege of: a) 
conveying by the Post, from one place to anot her all letters;  and b) performing all the 
incidental services of receiving, collecti ng, sending, dispatchi ng and delivering all 
letters 
Source: Annex 7 of the Agreement.  
 
2. Malaysia 
89. In its Annex 7, Malaysia has taken reservations on future me asures for 29 different sectors, 
sub-sectors or activities, mostly in the form of national treatment and to a lesser extent MFN 
treatment;  five of these reservations are at the centr al level of government, 1 at the regional level and 
23 at both levels of government.  For three of the li sted reservations Malaysia reserves the right to 
make existing or new measures more restrictive.44  The sectors include manufacturing, forestry, 
fisheries, oil and gas, and mining (See Table IV.4). 
 
     
 
    
 
 
                                                     
 
44 These are marked with a + sign in Table IV.4. WT/COMTD/RTA/3/1 
WT/REG265/1 Page 34  
 
 
  Table IV.4 - Non conforming measu res listed by Malaysia in Annex 7 
Sector/sub-sector or activity Reservation Description of measure 
Prohibitions or restrictions may be imposed on foreigners in land 
transactions, including ownership and lease of land and property 
and natural resources associated w ith land;  such transactions are 
subject to prior approval + 
Right to adopt or maintain an y measure with respect to the 
treatment of shares owned by a foreigner in the share capital of a corporation 
Licensing requirement 
Right to adopt or maintain any me asure with respect to acquisition 
of shares or any interest, mergers and takeover of companies and 
businesses in Malaysia by foreigners 
Right to adopt or maintain any measure relating to special preference to Bumiputera, Bumipu tera status companies, trust 
companies and institutions 
Right to adopt or maintain any me asure relating to statutory bodies NT 
Right to adopt or maintain any measure relating to national and 
state unit trusts 
MFN MFN may not be accorded to foreign investors and their 
investments with respect to pr eferential treatment granted by 
Malaysia under any future agreement 
NT and MFN may not be accorded in  the provision of loans, grants, 
incentives and other subsidies 
Right to adopt or maintain any quantitative of any measure relating 
to entry and temporary stay of foreign natural persons + 
Right to adopt or maintain any me asure on portfolio investment and 
securities 
NT and MFN may not be accorded to  foreign investors with respect 
to the privatisation or divest ment of assets owned by the 
government 
Right to adopt or maintain any me asure relating to the transfer or 
disposal of equity interests or assets of a state enterprise, a government entity, or a government-linked company or a Minister of Finance Incorporated company 
Right to adopt or maintain an y measures relating to activities 
restricted to designated enterprises or governmental entities which 
are liberalized to those other th an the designated enterprises or 
governmental entities 
Right to adopt or maintain any m easure relating to appointment of 
persons of Malaysian nationality to  senior management positions or 
board of directors of companies/enterprises NT/MFN 
Right to adopt or maintain any measure relating to any sector that 
has not been established in Malaysia  at the time of entry into force 
of this Agreement 
All sectors 
NT/MFN/PPR Right to adopt or maintain any measure taken by a State 
Government 
All services sectors NT/MFN/PPR Right to adopt or maintain any me asure relating to investments in 
services sectors provided it does not constitute a violation of its 
obligations under Chapter 8 
NT Right to maintain or impose expor t requirements on new projects or 
expansion/diversification of project s, consistent with national and 
social objectives and the orderly development of manufacturing 
activities Manufacturing 
NT Right to impose local equity requirements on new projects or on 
additional capital for expansion or  diversification of projects 
consistent with national and social objectives and the orderly 
development of manufacturing activities WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 35 
 
 
  Sector/sub-sector or activity Reservation Description of measure 
Manufacturing: 
− Pineapple canning 
− Palm oil milling and refining 
− Sugar refining 
− Liquors and alcoholic beverages 
− Tobacco processing and cigarettes 
− Wood-based products utilizing local 
logs 
− Petroleum refining 
− Ordinary portland cement 
− Steel billets/blooms 
− Hot rolled steel bars and wire rods 
− Optical discs 
− Fabrics and apparel of batik 
− Manufacture/assembly of motorcycles, 
passenger cars, and commercial 
vehicles 
− Arms, weapons, ammunitions, 
explosives, pyrotechnic products, 
propellant powders, detonating or 
safety fuses, and the like+ 
− Waste recycling activities+ 
− Collection, storage, treatment and 
disposal of hazardous and toxic 
wastes+ 
− Biodiesel NT Right to adopt or maintain any measure in these sub-sectors 
Agriculture NT/MFN/PPR Right to adopt or maintain any me asure with regard to approval for 
the agricultural projects listed in Annex 7 
Agriculture: 
− Paddy and rice NT Right to adopt or maintain any me asure in respect of the activities 
listed in Annex 7 
Fisheries: 
− Aquaculture NT Right to adopt or maintain any measure on treatment for fiscal 
incentives and approval of aquaculture projects 
− Capture fisheries NT/MFN Right to adopt or maintain any me asure relating to capture fisheries 
in Malaysia's exclusive economic zone and its seabed and subsoil 
Forestry: 
− Extraction and harvesting of timber NT Right to adopt or maintain any measure in this sub-sector 
Manufacturing, forestry, agriculture, 
fisheries: 
− Biodiversity NT/MFN Right to adopt or maintain any measure relating to biodiversity 
Oil and gas upstream industries NT/MFN Right to adopt or maintain any measure relating to the oil and gas 
upstream industries 
Mining and quarrying NT Right to adopt or maintain any measure relating to mining and 
quarrying 
+ Sectors in which Malaysia may make existing or new measures more restrictive. 
Source: Annex 7 of the Agreement.  
 
F. REGULATORY PROVISIONS ON TRADE IN SERVICES AND INVESTMENTS  
1. Domestic regulation 
90. Article 76 generally mirrors Article VI of the GATS.   It calls on the Parties to ensure that all 
measures of general application affecting trade in service are administrated in a reasonable, objective 
and impartial manner and that judicial, arbitral or  administrative tribunals or procedures are open on a 
non-discriminatory basis to services suppliers of the other Party.  With a view to ensuring that domestic regulation including qualification require ments and procedures, technical standard and 
licensing requirements do not constitute unnecessary barrier s to trade in services the Parties agree to 
jointly review the results of the negotiations pursuant  to Article VI.4 of the GATS with a view to their 
incorporation in the Agreement.  Pending such inco rporation the Parties agree not to apply licensing WT/COMTD/RTA/3/1 
WT/REG265/1 Page 36  
 
 
  and qualification requirements and t echnical standards that nullify or  impair their obligations under 
the Chapter in a manner which is not compliant with s ubparagraphs (a), (b), and (c) of Article VI:4 of 
the GATS.
45 
2. Mutual recognition 
91. Article 77 provides that a Party may recogn ize the education, experience, licenses or 
certifications granted in the other Party for the pu rpose of fulfilling the standards or criteria for the 
authorisation, licensing or certification of service suppliers of that Party.  Where a Party recognizes education, experience, licenses or certifications obtai ned in a non-Party, it is not bound to accord this 
treatment to the other Party.  The Party shall provide the other Party adequate opportunity to 
demonstrate that the education or experience obtaine d, requirements met, or licenses or certifications 
granted in the other Party should also be recognized. 
92. For the purposes of fulfilling, in whole or in part, the objectives set out in Article 77, the 
Parties have adopted, in Annex 6, a "Framework  on Mutual Recognition Arrangements" (MRA) to:  
(a) develop MRAs be tween the Parties;
46  and (b) promote the exchange  of information and adoption 
of best practice on standards and criteria between the Parties, in order to facilitate the mobility of 
professional service suppliers.  The Parties endeavour  to ensure that their respective relevant 
competent bodies develop mutually acceptable accred itation and recognition arrangements (Article 2 
to Annex 6).47  The sub-committee on trade in services is tasked to facilitate this process through the 
development of procedures for fostering the deve lopment and implementation of MRAs;  exchange 
information;  promote international standards crite ria and best practices;  maintain a listing of all 
recognised qualifications;  and examine any other matte rs of mutual interest to relating to the supply 
of services.  The sub-committee is to report to the Joint Committee on its progress and work 
programme within 1 year from the Agreement's entry into force. 
3. Safeguard actions on services trade and investment 
(a) Emergency Safeguard Measures 
93. Article 81 provides that within one year from the entry into force of the Agreement, the 
Parties will initiate discussions to develop guidelin es and procedures for the application of emergency 
safeguard measures which shall be annexed to and form part of the Agreement.  Notwithstanding 
these discussions, a Party may request consultations with the other Party if it deems itself to be 
negatively affected by its specific commitments in A nnex 5;  the consultations will endeavour to reach 
a mutually acceptable solution within a reasonable time. 
                                                      
45 Article VI:4 of the GATS calls for such requir ement to be: (a) based on objective and transparent 
criteria, such as competence and the ability to supply the services;  (b) not more burdensome than necessary to 
ensure the quality of the services;  and (c) in the case of  licensing procedures, not in themselves a restriction on 
the supply of the service. 
46 Article 1 of Annex 6 provides for the development of MRAs on:  (i) accreditation of educational 
institutions and academic programmes ;  or (ii) qualification, regi stration, licensing and certification 
requirements and experience for the fulfilment, in whole or in part, of standards and criteria for the 
authorization, licensing or cer tification of services suppliers. 
47 Matters covered under Article 2 includes: qualifications; examination; experience; recognition 
process; conduct and ethic; professional development and re-certification; scope of practice; information and 
documentation; local knowledge; and consumer protection. WT/COMTD/RTA/3/1 
WT/REG265/1 
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  (b) Restrictions to Safeguard the Balance of Payments 
94. In the event of serious balance of payments and external financial difficulties or threat 
thereof, the Parties may adopt or maintain restrict ions on trade in services, including payments or 
transfers for transactions relating to trade in services.  Such restrictions are to be consistent with the 
Articles of Agreement of the IMF, not exceed thos e that are necessary, ensure the other Party is 
treated as favourably as any third State, be tempor ary in nature and be phased out progressively and 
not be adopted or maintained for the purposes of pr otecting a particular services sector (Article 83). 
95. With respect to investments, in the event of  serious balance of payments and external 
financial difficulties or threat thereof, or where movements of capital cause or threaten to cause 
serious difficulties for macroeconomic management, in particular, monetary and exchange rate 
policies, the Parties may adopt or maintain measur es not conforming with the obligations of Article 
89 (National treatment) relating to cross-border ca pital transaction and Article 98 (Settlement of 
investment disputes).  Such measures are to be cons istent with the Articles of Agreement of the IMF, 
treat the other Party no less favourably than any thir d State, not exceed those that are necessary, be 
notified to the other Party,  and be temporary in nature and be phased out pr ogressively (Article 99). 
4. Payments, transfers and repatriation of investment 
96. Except for circumstances of restrictions to saf eguard the balance of payments pursuant to 
Article 83, neither Party may apply restrictions on international transfers and payments for current 
transactions relating to trade in services (Article 82).  With respect to investments, the Parties agree to 
allow all transfers in and out of their countries to  be made freely and without delay in any freely 
usable currency except in specifi c cases such as bankruptcy, criminal offences and obligations of 
investors arising from social security and public  retirement plans among others (Article 96). 
5. Transparency 
97. Article 78 sets out the transparency provisions fo r trade in services.  It requires each Party to 
publish all relevant measures of ge neral application which pertain to  or affect the operation of the 
Chapter.  Each Party is also to respond promptly to requests by the other Party for any of the above 
information. 
6. Other 
98. With respect to trade in services, Article 79 re quires the Parties to ensure that any monopoly 
supplier of a service does not act in a manner inc onsistent with their commitments under Chapter 8 
nor that it abuses its monopoly position.  Article 80 provides for consultations in case of business 
practices of services suppliers, other than those lis ted in Article 79, which may restrain competition 
and restrict trade in services.  Article 86 estab lishes a Sub-Committee on Trade in Services which is 
responsible for the implementati on and operation of Chapter 8. 
99. Chapter 9 contains several regulatory provisions relating to the treatment of investments and 
investors.  Under Article 91 each Party shall enc ourage and create favourable conditions for investors 
of the other Party and accord to their investments fair and equitable treatment, full protection and 
security.  Article 94 prohibits the expropriation or nationalization of investments except in certain 
specific circumstances and subject to adequate and effective compensation.48  Article 100 contains 
provisions modelled on those contained in the GA TS Annex on Financial Services which allow the 
                                                      
48 Article 94 does not apply to the issuance of co mpulsory licences granted in relation to intellectual 
property rights in accordance with the TRIPS Agreement. WT/COMTD/RTA/3/1 
WT/REG265/1 Page 38  
 
 
  Parties to take measures relating to financial servi ces for prudential reasons.  Article 98 provides for 
an investor-state dispute settlement mechanis m (See paragraph 107)  Article 103 establishes a 
Sub-Committee on investments for the purposes of e ffective implementation and operation of the 
Chapter. 
V. GENERAL PROVISIONS OF THE AGREEMENT 
1. General and security exceptions 
100. Chapter 13 addresses general and security excepti ons for goods and services by incorporating 
into the Agreement mutatis mutandis  Articles XX and XXI of the GATT 1994 for goods
49 and 
Articles XIV and XIV bis of the GATS for investment and services-related issues.50   
2. Accession 
101. There are no accession provisions in the Agre ement.  Either Party may terminate the 
Agreement by giving one year's advance notice in writing (Article 135). 
3. Institutional framework 
102. The Parties agree to: establish a Joint Committee responsible for reviewing the 
implementation and operation of the Agreement;  consider and recommend to the Parties any 
amendments to the Agreement;  facilitate the avoi dance and settlement of disputes;  supervise and 
coordinate the work of all sub-committees establis hed under the Agreement;  and carry out any other 
functions as the Parties may agree (Article 8).  The sub-committees the Parties have agreed to 
establish are for:  trade in goods;  trade in services;  customs procedures;  and investment (Article 9). 
103. Articles 3 to 6 set out the transparency and ad ministrative provisions of the Agreement.  The 
Parties must make publicly available laws, regula tions, and national policies of general application 
with respect to any matter covered under the Agreemen t (Article 3).  With respect to administrative 
procedures, the Parties endeavour to give reas onable notice about admini strative decisions which 
pertain to, or affect, the implem entation and operation of the Agreem ent (Article 4); the Parties'' 
competent authorities agree to establish standard s, where so required, for taking administrative 
decisions in response to applications submitted to th em (Article 4.2).  Furthermore, each Party agrees 
to maintain independent judicial or quasi-judicial tribunals or procedures for the review and correction 
of actions on matters covered by the Agreement (Article 5).  Other related measures include 
confidentiality (Article 6); and the designation of focal points to facilitate communications between 
the Parties (Article 10).   
4. Dispute settlement 
104. Chapter 12 sets out procedures for the settlement  of disputes between the Parties relating to 
the application and interpretation of the Agreement.51  Article 113:6 provides a forum election clause 
for matters falling under both the Agreement and a nother trade agreement to which both Parties are 
party;  however, once the complaining Party has ch osen the forum to settle the dispute, that forum 
shall be used to the exclusion of the others (exclusive forum clause). 
                                                      
49 For the purposes of trade in goods, rules of origin, customs procedures, technical regulations, 
standards and conformity assessment procedures, sanitary and phytosanitary measures, and investment other 
than Article 95 (Protection from strife). 
50 For the purposes of investment other than Article 95 and trade in services. 
51 Chapter 12 does not apply to matters arising under Article 55 (Global Safeguard Measures);  
Chapter 6 (SPS);  Chapter 11 (Economic Cooperation). WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 39 
 
 
  105. The Chapter encourages the Partie s to resolve disputes through co operation and consultations.  
Article 115 lays down the procedures for consulta tions while Article 116 provides for good offices, 
conciliation and mediation procedures;  the latter ma y be initiated and terminated at any time and may 
continue while procedures of the arbitral tribunal are in progress.  A Party may request consultations 
in writing with the other Party on any matter on the in terpretation or application of the Agreement if it 
considers that benefits accruing under the Agre ement are being nullified or impaired; or the 
attainment of any objective of this  Agreement is being impeded, as a result of the failure of the other 
Party to meet its obligations under the Agreement.  The Parties shall enter into consultations within 
30 days following the initial request (Article 146.2).  In the event that the Party complained against 
does not enter into such consultations or that th e consultation between the Parties fail to settle the 
dispute within 60 days from the date of the request, the complaining Party may request the establishment of an arbitral tribunal (Article 117). 
106. The PMCEPA provides for detailed steps in th e process for dispute resolution, the most 
salient of which are synoptically described in Table V.1.  Articles 118 to 121 deal, respectively, with 
the composition, functions, proceedings of arbitral  tribunals, and suspension and termination of 
proceedings.  The tribunal shall accord adequate oppor tunity to the Parties to review its draft report 
prior to its finalization;  the fi nal report shall be released to the Parties within 60 days following the 
establishment of the tribunal.  Should the tribunal co nsider that it cannot release its final report within 
such timeframe it will inform the Parties of the reas ons for the delay;  in no case, however, should this 
period exceed 150 days.  The tribunal's final report is  binding and not subject to appeal.  Article 122 
sets out the procedures related to the implementa tion of the award, while Article 123 deals with 
compensation and suspension of benefits. WT/COMTD/RTA/3/1 
WT/REG265/1 Page 40  
 
 
  Table V.1 - Synopsis of the Agreement's Dispute Settlement Provisions 
 
Source: The Text of the Agreement  
 
107. Article 98 provides for the settlement of investme nt disputes between a Party and an investor 
of the other Party that has incurred a loss or dama ge by reason of an alleged breach of any rights 
conferred under Chapter 9.52  The Article does not apply to disputes on any rights conferred by 
                                                      
52 Article 98 applies mutatis mutandis to measures affecting the supply of service by a service supplier 
of a Party through commercial presence in the territory of the other Party, regardless of whether or not such 
services sector is scheduled in a Party's schedule of specific commitments in Annex 5 (Article 68.4). Consultations  
Panel examination  
Panel final report  Consultations fail to resolve dispute 
within 60 days from the request 
Written request for the 
establishment of  a Panel 
45 days for composition;  40 more 
days in case of disagreement 
Panel submits draft 
award to the Parties  Parties to agree on resolution of dispute and the 
period of time for implementing the award
Retaliation  
suspension of application of concessions or 
other obligations under the Agreement 
Comments by the Parties 60 days or max. 150 
days in case of delay No reply to request within 10 days or 
no consultations within 30 days Negotiations on compensation 
− if no resolution of dispute within 45 
days of issuance of award; or 
− failure by the non conforming Party 
to implement the agreement reached within the time agreed 
Referral to arbitral tribunal
to determine the appropriate 
level of suspension of benefitsRequest for 
consultations  
30 days 
Report becomes 
public  10 days if no agreement reached in 20 days 
Referral to arbitral tribunal 
if the party complained against 
− considers the level of benefits suspended 
is excessive; or 
− has eliminated the inconsistent measure 
30 days 
Arbitral tribunal  
presents its determination Referral to arbitral 
tribunal 
if disagreement as to 
existence or consistency 
of measures taken to 
comply with award 
30 or max 45 days 
Arbitral tribunal  
presents its report WT/COMTD/RTA/3/1 
WT/REG265/1 
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  Articles 89 (National treatment) and 92 (Prohibitio n of performance requirements).  The Agreement 
encourages the settlement of an investment dis pute amicably through consultations.  Where the 
dispute cannot be settled within six months from th e date of written request for consultations, the 
dispute may be referred to international arbitration.53  A notice of intent for arbitration must be made 
in writing to the other Party at least 90 days before submission of the claim.  An investor shall not be 
entitled to make a claim where more than three y ears have elapsed since the date the disputing 
investor knew of the loss or damage incurred.  The ar bitral award is final, bi nding and shall include in 
case of a breach of the rights conferred under the Ch apter a remedy in the form of payment of 
monetary damages and/or restitution of property.  The award shall be executed without delay under 
the law of the Party concerned. 
5. Other provisions 
(a) Intellectual property 
108. Chapter 10 of the Agreement contains provisions  governing intellectual property (IP).  The 
Parties reaffirm their existing rights and obligatio ns with respect to each other under the TRIPS 
Agreement and any other multilateral agreement relating to IP to which they are both parties.  They 
endeavour to strengthen cooperation in  IP through the exchange of IP related information;  promotion 
of contacts between their respective agencies dea ling with IP related issues;  policy dialogue;  
promote public awareness;  and any other activity mutu ally determined by the Parties.  To facilitate 
such cooperation, each Party has established a focal point.54 
(b) Economic cooperation 
109. Under Chapter 11 the Parties endeavour to strengthen, promote and develop economic 
cooperation between themselves.  The Joint Committ ee is responsible for encouraging and promoting 
such cooperation in areas mutually agreed upon by th e Parties.  The dispute settlement procedures 
provided under the Agreement do not apply to  any disputes arising under this Chapter. 
(c) Taxation measures 
110. The provisions of the Agreement do not appl y to any taxation measure unless otherwise 
provided under the Agreement.  Taxation measures are defined as measures levying direct or indirect taxes, including excise duties and sales tax, as long  as these taxes are not used for the purpose of 
protecting the domestic industry of the country of the Party levying the duties (Article 127). 
(d) General review 
111. The Parties undertake to hold a general review of the Agreement in the fifth calendar year 
following the entry into force of the Agreement and, unless otherwise agreed by both Parties, every 
five years thereafter.  Notwithstanding this provision, the Parties agree to review in 2009 the concessions set out in Annex 1 to the Agreement (Article 130). 
                                                     
 
53 The disputing investor may submit the dispute to: a) the Kuala Lumpur Regional Centre for 
Arbitration (KLRCA) if agree by the disputing Party;  arbitration in accordance with the provisions of the 
Convention on the Settlement of Investment Disputes between States and Nationals of Other States 
(Washington, March 18, 1965);  arbitration under the Arbitration Rules of the United Nations Commission on International Trade Law (adopted on 28 April 1976);  or in accord ance with other arbitratio n rules if agreed with 
the disputing Party. 
54 The focal points are in the case of Malaysia, the Director General of Malaysia Intellectual Property 
Corporation (MyIPO);  in th e case of Pakistan, the Director General of  the Intellectual Property Organization of 
Pakistan (IPO Pakistan). WT/COMTD/RTA/3/1 
WT/REG265/1 Page 42  
 
 
  6. Relationship with other agreements concluded by the Parties 
112. In Article 133 the Parties reaffirm their right s and obligations under the WTO Agreement and 
any other agreement to which they are both parties.   The WTO Agreement shall prevail in the event of 
inconsistencies;  in the event of inconsistencies with ag reements other than the WTO, the Parties will 
consult with a view to finding a mutu ally satisfactory solution (Article 133). 
113. Table V.2 lists all other regional trade agreem ents (RTAs) notified and not notified to the 
GATT/WTO and in force to which Pakistan and Malaysia are party. 
Table V.2 - Pakistan and Malaysia:  Part icipation in other RTAs (notified and non-notified in force), as of June 2009 
GATT/WTO Notification Partner / Agreement Date of entry  
into force Type of 
agreement Year WTO Provision 
PAKISTAN 
China 01.07.07 Goods 2008 GATT Art. XXIV 
SAFTA 01.01.06 Goods 2008 Enabling Clause 
Sri Lanka 12.06.05 Goods 2008 Enabling Clause 
ECO 17.02.92 Goods 1992 Enabling Clause 
SAPTA 07.12.95 Goods 1997 Enabling Clause 
GSTP 19.04.89 Goods 1989 Enabling Clause 
PTN 11.02.73 Goods 1971 Enabling Clause 
Mauritius 30.11.07 Goods Not notified  
Iran 01.10.06 Goods Not notified  
MALAYSIA 
Japan 13.07.06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V
ASEAN Agreements:     
♦ ASEAN-China 01.07.07 Services 2008 GATS V 
♦ ASEAN-China 01.07.03 Goods 2004 Enabling Clause 
♦ AFTA 28.01.92 Goods 1992 Enabling Clause 
♦ ASEAN-Japan * Goods & Services Not notified 
♦ ASEAN-Korea * Goods & Services Not notified 
GSTP 19.04.89 Goods 1989 Enabling Clause 
* Not yet in force for all Parties.  Dates of entry into force differ. 
Source: WTO Secretariat.  
 
SAFTA: South Asian Free Trade Agreement.  
ECO: Economic Cooperation Organization. SAPTA: South Asian Preferential Trade Arrangement.  
GSTP: Global System of Trade Preferences. 
PTN: Protocol relating to Trade Ne gotiations among deve loping countries. 
APTA: Asia Pacific Trade Agreement (Bangkok Agreement).  
ASEAN: Association of Southeast Asian Nations. 
 
114. Article 134 lists agreements that  were terminated on the day of entry into force of the 
Agreement.  These are the following ones: 
(a) Trade Agreement between the Government of  Malaysia and the Government of the 
Islamic Republic of Pakistan signed in Kuala Lumpur on 5 November 1987; 
(b) Agreement between the Government of Malaysia and the Government of the 
Islamic Republic of Pakistan for the Prom otion and Protection of Investment signed 
in Kuala Lumpur on 7 July 1995;  and WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 43 
 
 
  (c) Agreement on the Early Harvest Programme  for the Free Trade Agreement between 
the Government of Malaysia and the G overnment of The Islamic Republic of 
Pakistan signed in Kuala Lumpur on 1 October 2005, as amended. 
 WT/COMTD/RTA/3/1 
WT/REG265/1 Page 44  
 
 
  ANNEX I 
 
 1. A comparison between the scheduled elimination of tariffs applied to the Parties' mutual 
imports and the duty rates applied by them on MFN im ports is shown in Tables AI.1 (Pakistan) and 
AI.2 (Malaysia), by agricultural (WTO definition) , non-agricultural and total products.  Applied MFN 
duty rates in 2008 serve as a comparison.
1 
2. Pakistan's overall average applied MFN rate in 2007-2008 was 14.5%;  the average applied 
tariff on agricultural products was 14.7% compared  to an average applied tariff of 14.5% for 
non-agricultural products.  Duty-free tariff lines accounted for 5% of all tariff lines.  On entry into 
force of the Agreement, Malaysian exporters enjo yed a relative margin of preference of 15% for 
agricultural goods vis-à-vis  the prevailing average MFN tariff in 2007-2008, compared to a relative 
margin of preference of 2% for non-agricultura l goods;  overall, Malaysia n exporters enjoyed a 
relative margin of preference of 3.4% vis-à-vis the prevailing average applied MFN tariff.  By the end 
of the implementation period, the share of Pakistan 's duty-free lines for Malaysian imports is expected 
to increase to 44.2% of the total tariff, of which 66.6% for agricultural lines and 41.3% for 
non-agricultural lines. 
Table AI.1 - Pakistan: Indicators of MFN tariff rates and preferential  rates for imports from Malaysia 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin 
of goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2008 14.5 15.3 5.0 14.7 17.0 13.3 14.5 15.1 3.8 
Malaysia 2008 14.0 14.7 5.0 12.5 14.5 13.3 14.2 14.8 3.8 
 2009 12.3 16.9 26.9 9.8 16.9 40.1 12.7 16.9 25.2 
 2010 11.3 15.5 26.9 8.4 14.5 40.1 11.7 15.6 25.2 
 2011 10.7 14.6 26.9 7.8 13.5 40.1 11.0 14.8 25.2 
 2012 9.8 17.7 44.2 6.5 21.4 66.6 10.2 17.4 41.3 
 2013 9.8 17.7 44.2 6.5 21.4 66.6 10.2 17.4 41.3 
 2014 9.6 17.3 44.2 6.3 21.0 66.6 10.0 17.0 41.3 
a WTO Definition. 
Note: Based on HS 2002 nomenclature. 
Source:  WTO Secretariat estimates based on data provided by Pakistan. 
3. Malaysia's average applied MFN rate in 2 008 was 7.8%;  the average applied tariff on 
agricultural products was 3.7% compared to an av erage applied tariff of 8.3% for non-agricultural 
products.  Duty-free tariff lines account for 57.9% of all tariff lines.  On entry into force of the 
Agreement, Pakistani exporters enjoyed a relative margin of preference of 35% for agricultural goods 
vis-à-vis  the prevailing average MFN tariff in 2008, and 8.4% for non-agricultural goods.  Overall, 
Pakistani exporters enjoyed a relative margin of preference of 14.3% vis-à-vis the prevailing average 
applied MFN tariff, as well as an increase to 60.6% in the share of Malaysia's duty-free lines.  By the 
end of the transition period, the share of duty free lines vis-à-vis  Pakistan is scheduled to increase to 
75.4% of which 91% for agriculture and 73.3% for non-agricultural products. 
 
 
  
                                                     
 
1 In the case of Pakistan the relevant applied MFN corresponds to the fi scal year 2007-2008;  
(See footnote 11). WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 45 
 
 
  Table AI.2 - Malaysia: Indicators of MFN tariff rates and preferential  rates for imports from Pakistan 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin of 
goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2008 7.8 18.7 57.9 3.7 10.3 61.6 8.3 19.6 57.3 
Pakistan 2008 7.0 17.8 60.6 2.4 9.7 72.8 7.6 18.4 58.9 
 2009 6.5 18.7 64.9 1.8 10.0 79.8 7.1 19.3 62.9 
 2010 5.8 16.7 65.0 1.6 9.0 79.9 6.3 17.1 62.9 
 2011 5.4 15.5 65.0 1.4 8.1 79.9 5.9 15.9 62.9 
 2012 4.9 19.8 75.1 0.9 11.8 89.3 5.4 20.1 73.2 
 2013 4.9 20.0 75.3 0.8 13.9 91.0 5.4 20.1 73.2 
 2014 4.7 19.2 75.3 0.8 13.5 91.0 5.2 19.4 73.2 
 2015 4.7 19.2 75.4 0.8 13.5 91.0 5.2 19.4 73.3 
a WTO Definition. 
Notes:  Based on HS 2007 nomenclature. 
 For tariff lines subject to TRQs only the out-of-quota duty is included in the tariff -related calculations;  lines with specif ic duties 
and the non ad valorem  component of lines with compound and alternat e rates are excluded from the calculations;  
 Only tariffs falling under HS Chapters 1-97 is included. 
Source : WTO Secretariat estimates based on data provided by Malaysia. 
 
4. Table AI.3 shows the market access opportunities in  Pakistan for Malaysia's top 25 exports, 
which in 2005-2007 accounted on average for 54.4% of Malaysia's global exports.  The table shows in 
which year all HS 8-digit tariff lines corresponding to the product definition (i.e. applying to the 
6-digit HS code used to capture the volume of trade) will become duty-free in Pakistan. 
5. Malaysia's top 25 exports cover a total of 95 HS 9-digit tariff lines of which 26 are already 
duty-free on an MFN basis.  Five of Malaysia's t op 25 exports (which account for 12 HS 9-digit lines 
and 16.3% of Malaysia's average global exports in  the period 2005-07) already benefit from zero 
MFN duties in Pakistan's market.  Eight further products gain duty-free access in 2009 as a result of 
the tariff liberalization commitments undertaken by Pakistan under the Agreement; combined these 
account for 14 HS 9-digit tariff line and 22.3% of Malaysia's average global exports.  By the end of the implementation period scheduled under the Agreemen t, of the 69 dutiable HS 9-digit tariff line, 24 
will become duty-free while 44 will retain duties.  Th e margin of preference granted to Malaysia by 
Pakistan under the Agreement varies from 1.3 to 5 percentage points. 
Table AI.3 – Pakistan:  market access opportunities  under the agreement for Ma laysia's top 25 exports 
Access Conditions to Pakistan's import markets  
MFN (2008)  Malaysia's top export products in 2005-2007  Number of 
tariff lines  Duty-free in  
HS number and description of the product  Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) 
Duty-free 
Dutiable 
2009 
2012 
Remain Dutiable 
847330 Parts and accessories of the machines of heading 84.71 6.3 1.3 3 1 1   
854221 Digital 5.7 5.0  1 1   
270900 Petroleum oils and oils obtained from bituminous 
minerals, crude. 5.6 0.0 1     
271111 Natural gas 4.1 0.0 1     
847130 Portable digital automatic data processing machines, 
weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display 4.0 0.0 3     
854260 Hybrid integrated circuits 3.4 5.0  1 1   
151190 Other 3.1 --  4   4 
854229 Other 2.6 5.0  1 1   
852520 Transmission apparatu s incorporating reception 
apparatus 2.3 7.0  5 3  2 
271019 Other 1.8 12.6 2 21   21 
Table AI.3 (Cont'd)  WT/COMTD/RTA/3/1 
WT/REG265/1 Page 46  
 
 
  Access Conditions to Pakistan's import markets  
MFN (2008)  Malaysia's top export products in 2005-2007  Number of 
tariff lines  Duty-free in  
HS number and description of the product  Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) 
Duty-free 
Dutiable 
2009 
2012 
Remain Dutiable 
847180 Other units of automatic data processing machines 1.8 3.6 2 5 5   
847170 Storage units 1.5 0.0 6     
847160 Input or output units, whether or not containing 
storage units in the same housing 1.5 6.8 4 7 5  2 
400122 Technically specified natural rubber (TSNR) 1.1 0.0 1     
271011 Light oils and preparations 1.1 7.5 3 3   3 
852990 Other 1.1 12.5  4 2 1 1 
854129 Other 1.0 5.0  1 1   
853710 For a voltage not exceeding 1,000 V 0.9 31.7  3   3 
854290 Parts 0.9 5.0  1 1   
852812 Colour 0.9 23.3  3   3 
853400 Printed circuits. 0.9 20.0  1   1 
401519 Other 0.8 20.0  1   1 
441214 Other, with at least one outer ply of non-coniferous 
wood 0.7 20.0  1   1 
151620 Vegetable fats and oils and their fractions 0.7 --  2   2 
711319 Of other precious metal, whether or not plated or clad 
with precious metal 0.6 5.0  3 3   
Total of above 54.4  26 69 24 1 44 
-- Specific duty. 
Source:  WTO estimates based on data provided by the Pa kistan authorities and UNSD, Comtrade data. 
6. Table AI.4 shows the market access opportunities in  Malaysia for Pakistan's top 25 exports, 
which in 2005-2007 accounted on average for 54.5% of Pakistan's global exports.  The table shows in 
which year all HS 9-digit tariff lines corresponding to the product definition (i.e. applying to the 
6-digit HS code used to capture the volume of trade) will become duty-free in Malaysia. 
7. Pakistan's top 25 exports cover a total of 44 HS 8-digit tariff lines of which 18 are already 
duty-free on an MFN basis.  Two of Pakistan's top 25 exports (which account for 6 HS 8-digit lines and 2.2% of Pakistan's average global exports in  the period 2005-07) already benefit from zero MFN 
duties in Malaysia's market.  15 further products  gain duty-free access as a result of the tariff 
liberalization commitments undertaken by Malaysia under the Agreement:  one in 2009;  13 in 2012;  
and one in 2015;  combined these account for 28 HS 8-digit tariff line and 32.3% of Pakistan's 
average global exports.  By the end of the implem entation period scheduled under the Agreement, of 
the 26 dutiable HS 8-digit tariff lines, 17 will become  duty-free while nine will retain duties.  The 
margin of preference granted to Pakistan by Malaysia under the Agreement varies from 0.4 to 
20 percentage points. 
 
   
 
    
 WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 47 
 
 
  Table AI.4 – Malaysia: market access opportunities  under the agreement for Pakistan's top 25 exports 
Access Conditions to Malaysia's import markets  
MFN (2008)  Pakistan's top export products in 2005-2007  
No. of tariff lines  Duty-free in  
HS number and description of the product  Share 
in 
global 
exports 
(%) Avg. 
applied 
rate 
(%) 
Duty-free 
Dutiable 
2009 
2012 
2015 
Remain 
Dutiable 
100630 Semi-milled or wholly milled rice, whether or not 
polished or glazed 6.5 40.0  2    2 
630231 Of cotton 5.7 20.0  1   1  
271019 Other 4.7 0.4 11 1 1    
630260 Toilet linen and kitchen linen, of terry towelling or 
similar terry fabrics, of cotton 3.5 20.0  1  1   
620342 Of cotton 3.2 20.0  1    1 
610510 Of cotton 3.0 20.0  1    1 
520512 Measuring less than 714.29 decitex but not less 
than 232.56 decitex (exceeding 14 metric number 
but not exceeding 43 metric number) 2.7 10.0  1  1   
420310 Articles of apparel 2.5 20.0  1    1 
520819 Other fabrics 2.2 10.0  1  1   
520532 Measuring per single yarn less than 714.29 decitex 
but not less than 232.56 decitex  1.9 10.0  1  1   
630210 Bed linen, knitted or croc heted 1.8 20.0  1  1   
521051 Plain weave 1.5 10.0  3  3   
570110 Of wool or fine animal hair 1.4 10.0 1 1    1 
630239 Of other textile materials 1.4 20.0  1  1   
610910 Of cotton 1.4 20.0  1    1 
630232 Of man-made fibres 1.4 20.0  1  1   
630710 Floor-cloths, dish-cloths, dusters and similar 
cleaning cloths 1.3 20.0  1  1   
620462 Of cotton 1.2 20.0  1    1 
521213 Dyed 1.2 10.0  1  1   
521031 Plain weave 1.1 10.0  1  1   
950662 Inflatable 1.1 0.0 1      
901890 Other instruments and appliances 1.1 0.0 5      
520522 Measuring less than 714.29 decitex but not less 
than 232.56 decitex 1.0 10.0  1  1   
420329 Other 0.9 20.0  1    1 
520511 Measuring 714.29 decitex or more 0.9 10.0  1  1   
Total of above 54.5  18 26 1 15 1 9 
Source : WTO estimates based on data provided by the Ma laysian authorities and UNSD, Comtrade data. 
8. Table AI.5 shows a comparison of Pakistan's average dutiable rates in those HS Chapters 
where preferential duties remain.  The comparison is  made between Pakistan's average preferential 
and MFN rates for lines which remain subject to preferential duties only.  Under the Agreement a 
total of 3,797 tariff lines distributed across 88 HS Ch apters retain a duty.  As it can be seen from the 
Table, average preferential duties are for most HS  Sections lower than the corresponding MFN duties 
indicating preferential tariff reductions, although in several cases only marginal ones.  The tariff 
reductions across these HS Chapters varies from 0.1 to 20 percentage points corresponding to an 
overall average margin of preference of 3.6 percentage points.  
 
  
 
    WT/COMTD/RTA/3/1 
WT/REG265/1 Page 48  
 
 
  Table AI.5 – Pakistan:  Average of dutiable rates, by HS Chapter 
Number of dutiable tariff 
lines and their average rates 
(%) HS Chapter Description 
No. of lines 
MFN 
PMCEPA 
Margin of 
preference 
1 Live animals 3 25 25 0 
2 Meat and edible meat offal 37 22.7 20.9 1.8 
4 Dairy produce; birds' eggs; natural honey; edib le products of animal origin, not elsewhere 
specified or included 17 25 20 5 
5 Products of animal origin not else where specified or included 2 25 25 0 
9 Coffee, tea, mate and spices 2 12.5 7.5 5 
10 Cereals 8 10 10 0 
11 Products of the milling industry; malt; st arches; inulin; wheat gluten 17 15 5.6 9.4 
13 Lacs; gums, resins and other ve getable saps and extracts 2 25 25 0 
14 Vegetable plaiting materials; vegetable products not elsewhere specified or included 2 25 5 20 
15 Animal or vegetable fats and o ils and their cleavage products; pr epared edible fats; animal or 
vegetable waxes 51 13.8 12.9 0.9 
16 Preparations of meat, of fish or of crustacean s, molluscs or other aqua tic invertebrates 4 25 25 0 
17 Sugars and sugar conf ectionery 16 15 13.1 1.9 
18 Cocoa and cocoa preparations 7 18.6 11.7 6.9 
19 Preparations of cereals, flour, starch or milk; pastrycooks' products 10 24.5 20 4.5 
20 Preparations of vegetables, fruit, nuts or other parts of plants 14 25 20 5 
21 Miscellaneous edible preparations 2 25 20 5 
22 Beverages, spirits a nd vinegar 23 71.3 70 1.3 
24 Tobacco and manufactured tobacco substitutes 7 25 25 0 
25 Salt; sulphur; earths and stone; plastering ma terial, lime and cement 7 15.7 7.1 8.6 
26 Ores, slag and ash 2 12.5 12.5 0 
27 Mineral fuels, mineral oils and products of th eir distillation; bituminous substances; mineral 
waxes 42 13.8 12.9 0.9 
28 Inorganic chemicals: organic or  inorganic compounds of precious metals, of rare-earth metals, 
of radioactive elements or of isotopes 46 10.4 7.9 2.5 
29 Organic chemicals 69 14.6 11.3 3.3 
30 Pharmaceutical products 38 13.2 7.7 5.5 
31 Fertilizers 4 5 5 0 
32 Tanning or dyeing extracts; tannins and their de rivatives; dyes,pigments and others colouring 
matter; paints and varnishes; putty and other mastics; inks 59 16.4 14.3 2.1 
33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations 50 17 10 7 
34 Soap, organic surface-active agen ts, washing preparations, lubr icant preparations, artificial 
waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, 
modelling pastes, dental waxes'  and dental preparations 35 18.6 14.8 3.8 
35 Albuminoidal substances; modified st arches; glues; enzymes 20 13.8 11.2 2.6 
36 Explosives; pyrotechnic products; matc hes; pyrophoric alloys; certain combustible preparations 7 22.1 21.4 0.7 
37 Photographic or cinema tographic goods 2 15 15 0 
38 Miscellaneous chemical products 67 15.3 10.5 4.8 
39 Plastics and articles thereof 142 17.6 16.4 1.2 
40 Rubber and articles thereof 93 21.6 18.9 2.7 
41 Raw hides and skins (other than  furskins) and leather 5 22 21 1 
42 Articles of leather; saddlery and harness; trav el goods, handbags and sim ilar containers; articles 
of animal gut (other than silk-worm gut) 24 24.2 17.5 6.7 
43 Furskins and artificial fur; manufactures thereof 1 25 20 5 
44 Wood and articles of wood; wood charcoal 50 19.4 16 3.4 
45 Cork and articles of cork 4 15 5 10 
46 Manufactures of straw, of esparto or of other pl aiting materials; basketware  and wickerwork 5 20 5 15 
47 Pulp of wood or of other fibrous cellulosic materi al; waste and scrap of pape r or paperboard 5 17 8 9 
48 Paper and paperboard; articles  of paper pulp, of paper or of paperboard 126 21.5 18.3 3.2 
49 Printed books, newspapers, pictur es and other products of the printing industry; manuscripts, 
typescripts and plans 8 17.5 5 12.5 
50 Silk 3 15 15 0 
51 Wool, fine or coarse animal hair; horse hair yarn and woven fabric 14 13.9 9.6 4.3 
52 Cotton 80 9.2 6.9 2.3 
53 Other vegetable textile fibres; paper yarn and woven fabrics of paperyarn 15 7.3 5.3 2 
54 Man-made filaments 62 12.3 12.3 0 
55 Man-made staple fibres 119 12.6 12.6 0 
Table AI.5 (Cont'd)  WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 49 
 
 
  Number of dutiable tariff 
lines and their average rates 
(%) HS Chapter Description 
No. of lines 
MFN 
PMCEPA 
Margin of 
preference 
56 Wadding, felt and non-wovens; special yarns; twin e, cordage, ropes and cables and articles 
thereof 31 19.4 13.2 6.2 
57 Carpets and other textile fl oor coverings 36 20.4 16.5 3.9 
58 Special woven fabrics; tufted textile fabrics;  lace; tapestries; trimmings; embroidery 44 25 20 5 
59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for 
industrial use 22 20 15.9 4.1 
60 Knitted or crocheted fabrics 44 24.8 20 4.8 
61 Articles of apparel and clothing acce ssories, knitted or crocheted 119 25 20 5 
62 Articles of apparel and clothing accessori es, not knitted or cr ochet 124 24.7 19.8 4.9 
63 Other made up textile articles; sets; worn clothi ng and worn textile article s; rags 85 24.6 19.7 4.9 
64 Footwear, gaiters and the like; parts of such articles 31 24.8 20 4.8 
65 Headgear and parts thereof 12 20 6.3 13.7 
66 Umbrellas, sun umbrellas, walki ng-sticks, seat-sticks, whips, riding-crops and parts thereof 8 23.1 5 18.1 
67 Prepared feathers and down and articles made of f eathers or of down; artif icial flowers; articles 
of human hair 8 21.3 5 16.3 
68 Articles of stone, plaster, cement, asbest os, mica or similar materials 45 24 18.1 5.9 
69 Ceramic products 42 22 17.6 4.4 
70 Glass and glassware 78 21.8 14.2 7.6 
72 Iron and steel 179 13.6 9.6 4 
73 Articles of iron or steel 138 21.1 17.5 3.6 
74 Copper and articles thereof 34 15.6 12.2 3.4 
75 Nickel and articles thereof 6 15 11.7 3.3 
76 Aluminium and articles thereof 38 17.4 15.1 2.3 
78 Lead and articles thereof 7 16.4 9.3 7.1 
79 Zinc and articles thereof 6 12.5 5 7.5 
80 Tin and articles thereof 5 14 8 6 
81 Other base metals; cermets; articles thereof 1 10 5 5 
82 Tools, implements, cutlery, spoons and forks, of base  metal; parts thereof of base metal 54 17.2 13.7 3.5 
83 Miscellaneous articles of base metal 56 26.3 21.2 5.1 
84 Nuclear reactors, boilers, machinery and mechan ical appliances; parts thereof 283 21.3 18.7 2.6 
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, 
television image and sound record ers and reproducers, and parts a nd accessories of such articles 304 21.9 18.4 3.5 
86 Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track 
fixtures and fittings and parts thereof; mech anical (including electro-mechanical) traffic 
signalling equipment of all kinds 1 10 5 5 
87 Vehicles other than railway or tramway rolling-st ock, and parts and accessori es thereof 221 40.2 40.1 0.1 
89 Ships, boats and floating structures 9 15.6 5 10.6 
90 Optical, photographic, cinematographic, measuri ng, checking, precision, medical or surgical 
instruments and apparatus; parts and accessories thereof 53 21.9 19.5 2.4 
91 Clocks and watches and parts thereof 23 17.8 12.8 5 
92 Musical instruments; parts and accessories of such articles 4 10 5 5 
93 Arms and ammunition; parts and accessories thereof 52 20.2 20.2 0 
94 Furniture; bedding, mattresses, mattress supports , cushions and similar stuffed furnishings; 
lamps and lighting fittings, not elsewhere specifi ed or included; illuminated signs, illuminated 
name-plates and the like; prefabricated buildings 47 25.2 20.2 5 
95 Toys, games and sports requisites; pa rts and accessories th ereof 55 18.6 7.7 10.9 
96 Miscellaneous manufactured articles 61 21.4 10 11.4 
97 Works of art, collectors' pieces and antiques 3 6.7 6.7 0 
Total 3,797 20.9 17.3 3.6 
Note: Based on HS 2002 nomenclature. 
Source:  WTO estimates based on data provided by Pakistan. 
9. Table AI.6 shows a comparison of Malaysia's average dutiable rates in those HS Chapters 
where preferential duties remain.  The comparison is  made between Malaysia's average preferential 
and MFN rates for lines which remain subject to preferential duties only.  Under the Agreement a 
total of 2,556 tariff lines distributed across 66 HS Ch apters retain a duty.  As it can be seen from the 
Table, average preferential duties are for most HS  Sections lower than the corresponding MFN duties 
indicating preferential tariff reductions, although in several cases only marginal ones.  The tariff WT/COMTD/RTA/3/1 
WT/REG265/1 Page 50  
 
 
  reductions across these HS Chapters varies from 0. 6 to 35.7 percentage points corresponding to an 
overall average margin of preference of 5.4 percentage points.  
Table AI.6 – Malaysia: Average of dutiable rates, by HS Chapter 
Number of dutiable tariff 
lines and their average rates 
(%) Hs Chapter Description 
No. of lines 
MFN 
Preferential 
Margin of 
preference 
1 Live animals 2 20 10 10 
2 Meat and edible meat offal 4 40 20 20 
3 Fish and crustaceans, molluscs and other aquatic invertebrates 2 20 10 10 
4 Dairy produce; birds' eggs; natural honey; edib le products of animal origin,not elsewhere 
specified or included 7 50 14.3 35.7 
7 Edible vegetables and certa in roots and tubers 1 90 50 40 
8 Edible fruit and nuts; peel of citrus fruit or melons 15 13.3 8.7 4.6 
10 Cereals 8 40 36.9 3.1 
15 Animal or vegetable fats and o ils and their cleavage products; pr epared edible fats; animal or 
vegetable waxes 11 11.4 6.8 4.6 
16 Preparations of meat, of fish or of crustacean s, molluscs or other aqua tic invertebrates 5 20 10 10 
22 Beverages, spirits and vinegar 34 -- --  
24 Tobacco and manufactured tobacco substitutes 19 5 5 0 
25 Salt; sulphur; earths and stone; plastering ma terials, lime and cement 11 23.6 14.1 9.5 
28 Inorganic chemicals; organic or  inorganic compounds of precious metals, of rare- earth metals, 
of radioactive elements or of isotopes 23 19.8 19.8 0 
29 Organic chemicals 4 25 15 10 
32 Tanning or dyeing extracts; tannins and their de rivatives; dyes, pigments and other colouring 
matter; paints and varnishes; putty and other mastics; inks 20 22 19.9 2.1 
33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations 10 17 17 0 
34 Soap, organic surface- active agen ts, washing preparations, lubri cating preparations, artificial 
waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, 
modelling pastes, "dental waxes" and dental  preparations with a basis of plaster 21 12.7 8.8 3.9 
35 Albuminoidal substances; modified starches; glues; enzymes 7 25 22.9 2.1 
36 Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations 10 27.5 27.5 0 
37 Photographic or cinema tographic goods 6 20 20 0 
38 Miscellaneous chemical products 11 16.4 15.5 0.9 
39 Plastics and articles thereof 234 22.5 18.7 3.8 
40 Rubber and articles thereof 76 28.2 20 8.2 
42 Articles of leather; saddlery and harness; trav el goods, handbags and sim ilar containers; articles 
of animal gut (other than silk- worm gut) 2 20 20 0 
48 Paper and paperboard; articles of paper pulp, of paper or of paperboard 173 17.5 14.4 3.1 
49 Printed books, newspapers, pictur es and other products of the printing industry; manuscripts, 
typescripts and plans 15 20 18.7 1.3 
54 Man- made filaments 19 11.6 6.8 4.8 
55 Man- made staple fibres 36 11.9 7.5 4.4 
56 Wadding, felt and nonwovens; special yarns; twin e, cordage, ropes and cables and articles 
thereof 22 20.9 16.4 4.5 
57 Carpets and other textile fl oor coverings 21 24.3 18.6 5.7 
58 Special woven fabrics; tufted te xtile fabrics; lace; tapestries; trimmings; embroidery 119 20 10.1 9.9 
59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for 
industrial use 13 20 20 0 
60 Knitted or crochete d fabrics 16 15 10 5 
61 Articles of apparel and clothing accessori es, knitted or croche ted 94 19.4 18.8 0.6 
62 Articles of apparel and clothing accessori es, not knitted or cr ocheted 90 19 18.2 0.8 
63 Other made up textile articles; sets; worn clot hing and worn textile arti cles; rags 3 10 6.7 3.3 
64 Footwear, gaiters and the like; parts of such articles 24 27.3 19.2 8.1 
65 Headgear and parts thereof 11 20 10 10 
66 Umbrellas, sun umbrellas, walking- sticks, seat- st icks, whips, riding- crops and parts thereof 8 20 10 10 
67 Prepared feathers and down and articles made of f eathers or of down; artif icial flowers; articles 
of human hair 8 23.1 11.3 11.8 
68 Articles of stone, plaster, cement, asbestos , mica or similar materials 43 25.9 17.4 8.5 
69 Ceramic products 29 27.1 21 6.1 
70 Glass and glassware 58 34.1 23.3 10.8 
71 Natural or cultured pearls, precious or semi- preci ous stones, precious metals, metals clad with 
precious metal, and articles thereof; imitation jewellery; coin 1 20 10 10 
Table AI.6 (Cont'd)  WT/COMTD/RTA/3/1 
WT/REG265/1 
Page 51 
 
 
  Number of dutiable tariff 
lines and their average rates 
(%) Hs Chapter Description 
No. of lines 
MFN 
Preferential 
Margin of 
preference 
72 Iron and steel 275 39.8 37 2.8 
73 Articles of iron or steel 133 27.9 20.2 7.7 
74 Copper and articles thereof 8 24.1 18.8 5.3 
76 Aluminium and articles thereof 37 25.3 17.6 7.7 
78 Lead and articles thereof 2 15 10 5 
79 Zinc and articles thereof 5 22 14 8 
80 Tin and articles thereof 3 23.3 16.7 6.6 
82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal 30 25 20 5 
83 Miscellaneous articles of base metal 49 22 15.1 6.9 
84 Nuclear reactors, boilers, machinery and mech anical appliances; parts thereof 171 22 14.7 7.3 
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, 
television image and sound record ers and reproducers, and parts a nd accessories of such articles 119 21.8 14 7.8 
87 Vehicles other than railway or tramway rolling- stock,and parts and accessori es thereof 255 29 23.2 5.8 
88 Aircraft, spacecraft, and parts thereof 1 25 20 5 
89 Ships, boats and floating structures 4 25 20 5 
90 Optical, photographic, cinematographic, measuri ng, checking, precision, medical or surgical 
instruments and apparatus; parts and accessories thereof 3 23.3 16.7 6.6 
91 Clocks and watches and parts thereof 2 27.5 22.5 5 
92 Musical instruments; parts and accessories of such articles 1 15 10 5 
93 Arms and ammunition; parts and accessories thereof 24 15.4 15.4 0 
94 Furniture; bedding, mattresses, mattress supports , cushions and similar stuffed furnishings; 
lamps and lighting fittings, not elsewhere specifi ed or included;  illuminated signs, illuminated 
name - plates and the like; prefabricated buildings 26 21.2 14.2 7 
95 Toys, games and sports requisites; pa rts and accessories thereof 12 24.2 15 9.2 
96 Miscellaneous manufactured articles 49 22 13.4 8.6 
97 Works of art, collectors' pieces and antiques 1 30 5 25 
Total 2,556 24.6 19.2 5.4 
-- Specific duty. 
Note: Based on HS 2007 nomenclature. 
 For tariff lines subject to TRQs only the out-of-quota duty is included in the tari ff-related calculations;  for tariff lines with non 
ad valorem  components, only the ad valorem  part of the rate was included in the calcu lation of the tariff averages; Only tariffs 
falling under HS Chapters 1-97 is included. 
Source:  WTO estimates based on data provided by Pakistan. 
 
 WT/COMTD/RTA/3/1 
WT/REG265/1 Page 52  
 
 
  ANNEX II 
 
 
Table.  AII.1:  Product specific rules of origin of PMCEPA 
HS Section and Description HS Ch. Rule RVC/notes (where applicable)  
1-3 WO 
4 WO; CTC I - Live Animals; Animal Products 
5 WO  
6-8 WO 
9 WO; CTC II - Vegetable Products 
10-14 WO  
III - Animal or Vegetable Fat and Oils 15 WO  
16 CTC 
17 WO 
20 WO; CTC 
23 WO IV - Prepared Foodstuffs; Beverages, 
Spirits and Vinegar 
24 WO  
50-51 TR CTC is not required provided that the good is dyed or printed plus 
at least two operations listed in note 1 to Annex 2. XI -Textile 
52 WO; CTC  
XVI - Machinery 84-85 CTC  
XX - Miscellaneous 94 CTC  
Note: Wholly Obtained (WO);   
 Change of Tariff Classification (CTC);   
 Technical Rule (TR). 
Source:  Annex 2 of the Agreement. 
 WT/COMTD/RTA/3/1 
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  ANNEX III 
 
 
1. Tables AIII.1 and AIII.2 summarize Pakistan and Malaysia's specific commitments under 
Chapter 8 for trade in services and compare them to  their respective GATS schedules.  The Tables list 
new commitments and modification to existi ng ones under the GATS.  New commitments are 
indicated by the letter N (New) under the GATS co mmitments column; the table simply shows the 
addition of new sectors and sub-sectors and does not include the description of the commitment at the level of the modes of supply.  As for existing commitments under the GATS, the table only lists the 
sectors and sub-sectors where changes have occurred under the Agreement;
1  with respect to these, the 
table lists the modes of supply under market access and national treatment that reflect changes under 
the Agreement as compared to the Parties' respective GATS schedules.2 
2. Table AIII.1 shows that Pakistan has committed under the Agreement five new sectors and 
35 new sub-sectors as compared to its GATS schedule.  With respect to modification of existing 
GATS commitments, these include in most cases rela xing the requirements under mode 3 and 4 and 
fully liberalizing modes 1 and 2 (see section IV:D .1 for a detailed description of the changes). 
Table AIII.1:  Pakistan's specific services commitments under the Agreement (as compared to its GATS schedule) 
PMCEPA 
Sector or Sub-sector GATS 
commitments? Market Access National 
Treatment 
HORIZONTAL COMMITMENTS  
All Sectors Y 3, 4 3 
SPECIFIC COMMITMENTS  
Business services Y   
• Legal services   
• Accounting and bookkeeping   
• Architectural services N 
  
• Engineering services 1, 2, 3 1, 2  
• Integrated engineering Y 3  
• Veterinary services   
• Services provided by midwives, etc. (CPC 93191) N   
• Consultancy services (CPC 841) 1, 2, 3 1, 2 
• Other computer related services (CPC 842, 843, 844) 1, 3 1 
• R&D services (CPC 851) Y 
1, 3 1 
• R&D services (CPC 852, 853)   
• Rental/leasing services w/out operators (CPC 83101) N   
• Technical testing and analysis services 1, 3 1 
• Services incidental to agriculture, forestry and mining (CPC 881, 
882, 883, 5115) Y 3  
• Printing publishing   
• Agriculture storage facilities services   
• Range land services N 
  
Communication services Y   
• Courier services (CPC 7512) N   
• Telecommunications services 3  
− Voice telephone services 3 1, 2, 3 
− Packet/circuit switched data 3 1, 3 
− Private leased circuit services Y 
3 1, 3 
− Mobile communication services N   
Construction and related engineering services   
• General construction work for civil engineering (CPC 513) Y 1, 2, 3 1, 2 
• General construction work for buildings (CPC 512)   
• Installation and assembly work (CPC 514, 516)   
• Building completion and finishing work (CPC 517)   
• Pre-erection work (CPC 511, 515, 518) N 
  
                                                      
1 The letter Y (Yes) indicates that the sector or su b-sector is committed in th e Party's GATS schedule. 
2 A change is understood as either the liberalization, or modification of any given mode of supply. WT/COMTD/RTA/3/1 
WT/REG265/1 Page 54  
 
 
  PMCEPA 
Sector or Sub-sector GATS 
commitments? Market Access National 
Treatment 
Distribution services   
• Wholesale, retailing and franchising N   
Educational services   
• Higher, adult and other education services N   
Environmental services   
• Refuse disposal services   
• Sanitation and similar services N 
  
Financial services   
• Insurance and related services:   
− Life and non-life 3  
• Banking and other financial services:   
− Acceptance of deposits 3, 4 3, 4 
− Lending of all types 3, 4 3 
− All payments and money transmission services 3 3 
− Trading for own account 3  
− Participation in issues of all kind of securities 3  
− Asset management 3  
− Financial and investment  advisory services Y 
3  
Health related and social services   
• Hospital services 
• Medical and dental services Y 1, 3 1 
Tourism and travel related services   
• Hotels and restaurants services (CPC 641-643) 
• Travel agency and tour operator services Y 1, 2, 3 1, 2 
• Other: theme parks and convention centres N   
Recreational, cultural and sporting services   
• Libraries, archives, museums   
• Sporting services N 
  
Transport services   
Rail transport services   
• Passenger transportation   
• Freight transportation   
• Container terminal   
• Maintenance and repair    
• Maintenance and repair of rail transport equipment   
• Supporting services for rail transport services   
Road transport service   
• Passenger transportation   
• Freight transportation   
• Rental commercial vehicles with operators   
• Maintenance and repair of road transport equipment   
• Supporting services for road transport services   
Services auxiliary to all modes of transport   
• Cargo-handling services   
• Storage and warehouse services N 
  
Source: Annex 5 of the Agreement. 
 
 
 
 WT/COMTD/RTA/3/1 
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  3. Table AIII.2 shows that Malaysia has comm itted under the Agreement two new sectors and 
seven new sub-sectors as compared to its GATS sche dule.  With respect to modification of existing 
GATS commitments, these include in most cases rela xing the requirements under mode 3 and 4 and 
fully liberalizing modes 1 and 2 (see section IV:D .2 for a detailed description of the changes). 
Table AIII.2:  Malaysia's specific services commitments  under the Agreement (as compared to its GATS schedule)  
PMCEPA 
Sector or Sub-sector GATS 
commitments? Market Access National 
Treatment 
HORIZONTAL COMMITMENTS  
All Sectors Y 3  
SPECIFIC COMMITMENTS  
Business services   
• Accounting, auditing and bookkeeping 3, 4 1, 2 
• Architectural services 3, 4  
• Engineering services Y 
3  
• Urban planning services N   
• Medical speciality services  4 
• Consultancy services (CPC 841, 842) Y 3  
• Data processing services N   
• Database services Y 3  
Communication services Y   
• Basic telecommunications (See Para 74)   
Construction and related engineering services   
• Construction work Y 3  
Distribution services   
• Wholesale, retailing and franchising N   
Educational services   
• Higher education N   
Financial services   
• All financial services 3, 4  
• Banking and other financial services:   
− Acceptance of deposits 2 3 
− Lending of all types  3, 4 
− Financial leasing 3  
− All payments and money transmission services Y 
2, 3 3 
Health related and social services   
• Hospital services Y 3  
Tourism and travel related services   
• Hotel, tourist resort and restaurant services (CPC 641, 642, 643) 1, 3 1 
• Travel agency and tour operator services Y 
1, 3 1 
Transport services Y   
• Rental of cargo vessels with crew   
• Maintenance and repair of vessels  N   
Other services Y   
• Services incidental to electricity and gas distribution N   
Source: Annex 5 of the Agreement.  
 
__________