WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO WT/TPR/M/193/Add.1 
16 April 2008 
 (08-1775) 
Trade Policy Review Body 
16 and 18 January 2008 Original:  English/Spanish 
                 anglais/espanol                  inglés/español 
  
TRADE POLICY REVIEW 
PAKISTAN 
Minutes of Meeting
 
Addendum  
Chairperson:  H.E. Mr. Vesa Himanen (Finland)  
 This document contains the advance written questions, and replies provided by Pakistan.1 
__________________________________________________________________________________  
Organe d'examen des politiques commerciales 
16 et 18 janvier 2008 
 
EXAMEN DES POLITIQUES COMMERCIALES 
PAKISTAN 
Compte rendu de la réunion
 
Addendum  
Président:  S.E. M. Vesa Himanen (Finlande) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par le Pakistan.1 
__________________________________________________________________________________ 
 
Órgano de Examen de las Políticas Comerciales 
16 y 18 de enero de 2008  
EXAMEN DE LAS POLÍTICAS COMERCIALES 
PAKISTÀN 
Acta de la reunión
 
Addendum  
Presidente:  Excmo. Sr. Vesa Himanen (Finlandia) 
 
 En el presente documento figuran las pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por el Pakistán.1 
 
 
  
_________________________________________ 
 1 
In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.  
  WT/TPR/M/193/Add.1 
 Page 3 
 
 
 ADVANCE WRITTEN QUESTIONS BY MEMBERS 
EUROPEAN COMMUNITIES  
I. ECONOMIC ENVIRONMENT  
(4) M AIN STRUCTURAL POLICY DEVELOPMENTS   
(iii) Governance 
 WTO Secretariat's Report, page 10/11, para. 27&28 & page 19, para. 3 
 
We take note of the number of important measures Pakistan has put in place since the last Review to improve governance and enhance transparency. Despite  these improvements, the report notes that the 
business climate seems to "remain somewhat unfriendly" to private economic activity. In a similar 
vein, the Secretariat's Report (page 19, para 3) notes that "foreign investment would be facilitated by […] on-going reductions in corruption".   1. Could Pakistan elaborate what additional steps it intends to undertake so as to improve 
governance and enhance transparency further?  
 2. In this context, could Pakistan please elaborate on its specific plans to fu rther reduce levels of 
corruption?  
 
(6) D
EVELOPMENTS IN MERCHANDISE TRADE  
(i) Merchandise trade  
(a) Composition of trade   WTO Secretariat's Report, page 13, para. 36 
 According to the WTO Secretariat's Report, "little export diversification has occurred since the last 
Review of Pakistan. Exports remain highly concentrated".   3. Could Pakistan elaborate on its plans to pursue further diversification, in particular with 
regard to the textiles and clothing sector?  
 II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES  (4) T
RADE AGREEMENTS AND ARRANGEMENTS   
(ii) Regional and other preferential arrangements  
 
WTO Secretariat's Report, page 26, para. 19 & page 27, para. 22 
 
It is indicated that Pakistan would gain considerab ly from unilateral trade liberalisation. At the same 
time, the Secretariat's report states that Pakistan's  sensitive list of goods, to be exempted from tariff 
cuts under SAFTA, has the highest share of items among non-LDC members.  4. Could Pakistan indicate whether it considers unila teral liberalisation as a first step to further 
benefit from regional integration? If so, would Pa kistan consider opening its markets further 
vis-à-vis its direct neighbours? 
 5. Does Pakistan consider reducing its list of sen sitive goods, which are exempt from tariff cuts 
under SAFTA? WT/TPR/M/193/Add.1 
Page 4  
 
 (b) Regional and plurilateral arrangements  
 
WTO Secretariat's Report, page 27, para. 22 
 
6. Has Pakistan notified the South Asia Free Trade Agreement (SAFTA) to the WTO? If not, 
when does Pakistan intend to do so? 
 7. Could Pakistan indicate the scope and libera lization commitments under this Agreement?  
 
(c) Bilateral arrangements  
 
WTO Secretariat's Report, page 29-31, para. 27-32 
 
According to the WTO Secretariat's Report, Pakistan 's recent bilateral agr eements have not been 
notified or announced to the WTO.  
 
8. When does Pakistan intend to notify the Pa kistan-Sri Lanka FTA, Pakistan-China FTA, 
Pakistan-Malaysia PTA, Pakistan-Iran PTA and the Pakistan-Mauritius PTA?  
 9. Could Pakistan indicate for each of the aboveme ntioned RTAs how much trade is covered and 
how far liberalization commitments go?  
 
10. Could Pakistan inform about the latest state of play of negotiations in trade in services with 
China?  
 11. Could Pakistan confirm that the Pakistan-Mal aysia PTA has indeed come into force on 
1 January 2008? 
 12. Does Pakistan consider that a growing number of  shallow RTAs would contribute to reap the 
benefits regional inte gration offers?   
 13. Does Pakistan share the views that pursuing comprehensive and high-quality RTAs would 
lead to enhance genuine trade liberalization in the region? 
 14. Does Pakistan agree with the assumption that fully-fledged and comprehensive FTAs are a 
preferable option in terms of economic gains a nd trade liberalisation benefits rather than 
limited shallow preferential trade agreements?  
 
WTO Secretariat's Report, page 30/31, para. 32 
 
According to the WTO Secretariat's Report, "no fu rther details on the PTA were available, including 
from the authorities".   
15. Could Pakistan please further describe the sc ope and coverage of the Pakistan Mauritius 
bilateral trade agreement?   WT/TPR/M/193/Add.1 
 Page 5 
 
 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) I NTRODUCTION  
 
WTO Secretariat's Report, page 36, para. 2 
 The EC acknowledges efforts undertaken by Pakistan  with a view to reduc ing the occurrence of 
smuggling. However, we noted that the Secretar iat’s report indicates that "significant smuggling 
remains, albeit reduced, partly due to  trade restrictions with India".  
 16. Could Pakistan indicate which particular measu res it is currently carrying out and which ones 
it is planning to undertake so as to counter such smuggling activities?  
 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs  (a) Policy and general features  
 
WTO Secretariat's Report, page 39, para. 14 
 
According to the WTO's Secretariat's Report, "un ilateral  'top down' tariff reform programmes ended 
in 2002/03; since then 'piecemeal' re forms have mainly prevailed […]".  
 
17. Why did unilateral tariff reduction programmes cease in 2002/03?  
 
(c) MFN tariff bindings 
 
WTO Secretariat's Report, page 42., para. 21 & page 49, para. 37 
 
The Secretariat's Report informs that peak ad va lorem rates have dropped in recent years from 250% 
to 90% and these are concentrated on a few sensitive  items including on motor vehicles. With the 
merger of the capital value tax on imported motor ve hicles in June 2007, tariffs on cars with engines 
above 800 cc were raised by either 5, 10 or 15 pe rcentage points depending on their engine capacity. 
In addition, it is indicated that ta riffs for motor vehicles are also unbound. 
 
18. Could Pakistan confirm whether it intends to re duce tariffs on motor vehicles at least to the 
level before June 2007 or even below? 
 19. In addition, is Pakistan planning to bi nd its tariffs on imported motor vehicles? 
 
(iii) Customs valuation, minimum import prices and Preshipment inspection 
 WTO Secretariat's Report, page 48, para. 33  
The Secretariat report states that the "transaction value reportedly applies to only some 90-95% of 
imports and is used unevenly on  food and consumer goods".  
 
20. Could Pakistan report on the difficulties encountered  in applying the transaction value in such 
a relevant percentage of imports?  
 
21. Could Pakistan describe on what basis cu stoms authorities determine under-invoicing? 
 22. Do Pakistan's Customs communicate to the im porter the grounds for considering that the 
transaction value is inapplicable? Does Pakistan i Customs give importers a chance to respond 
and to show Pakistani Customs that the transaction value listed on the invoice should be WT/TPR/M/193/Add.1 
Page 6  
 
 accepted as transaction value? What type of info rmation can the importer provide to address 
these concerns? 
 
WTO Secretariat's Report, page 48, para. 34 
 
23. Could Pakistan explain the reasons fro appl ying special customs valuation procedures to 
motor vehicles?  
 
(iv) Other levies, charges and taxes (a) Domestic taxes  
 
WTO Secretariat's Report, page 48, para. 36 
 
The Secretariat's report states that "while, with some important exceptions, domestic taxes […] apply at the same rate on domestic a nd imported products and may not generally discriminate against 
imports, any assessment is made difficult by their no n-transparency and complexity, including in how 
they are administered differently on imports".  24. Could Pakistan provide information on where exporters to Pakistan can find information 
about the taxes applied to each product cate gory and how these taxes are administered? 
 (v) Import prohibitions, quotas, restrictions, and licensing  (a) Prohibitions 
 
WTO Secretariat's Report, page 50, para. 42 
 Page 11 of the Report by Pakistan informs that sinc e the last review, Pakistan's ban on imported iron 
and steel waste and scrap had been removed. However,  the Secretariat's report refers to this ban as 
only being "relaxed". 
 
25. Could Pakistan confirm whether this im port ban has been actually abolished?  
 
26. In addition, could Pakistan describe the current regime for the import of iron and steel waste 
and scrap? 
 
WTO Secretariat's Report, page xii, para. 21 
 The Secretariat's Report states that the commercial imports of used vehicles are prohibited to promote 
the domestic industry.  27. Could Pakistan confirm that the commercial impor t of used vehicles is indeed prohibited? If 
so, could Pakistan explain the rationale for this  measure and indicate whether it is planning to 
enact the necessary legal measures to cease this import ban? 
(b) Restrictions and licensing  WTO Secretariat's Report, page 51, para. 45 
According to the WTO Secretariat's Report, certain imports are restricted for health, safety, security, 
and environmental reasons. However, "this does not always seem to be the case e.g. for motor vehicles and the oil and gas sector".  
 
28. Could Pakistan elaborate further on the rationa le for restricting imports of these products?  WT/TPR/M/193/Add.1 
 Page 7 
 
 
 WTO Secretariat's Report, page 51, para. 47 
 
According to the WTO Secretariat's Report, Pakistan is no longer operating an import licensing system.   
29. Could Pakistan confirm that no product is subj ect to import licensing procedures?  If so, is 
Pakistan considering re-introducing the system in the future?  
 
(vii) Government procurement 
 
WTO Secretariat's Report, page 52, para. 52 
 
30. In light of the recent reforms of 2004 and of the fact that Pakistan’s current government 
procurement framework is based upon interna tional best practice, does Pakistan envisage 
becoming an observer to the Plurilateral WTO Agreement on Government Procurement? If 
not, could Pakistan elaborate on the reasons for not taking such decision? 
 
WTO Secretariat's Report, page 53, para. 53 
 
31. How does Pakistan's authorities interpret " no advantage is envisaged from competitive 
bidding" in order to allow for direct tendering? Are there any thresholds applied? 
 
WTO Secretariat's Report, page 53, para. 54 
 
32. Which nationalities are prohibited by governme nt policy? Does Pakistan envisage reducing 
price preferences at some time? 
 
WTO Secretariat's Report, page 53, para. 56 
 
33. When do Pakistan's authorities plan to provide updated figures of total government 
procurement market for goods and services and indi cation of the share of federal procurement 
covered by the Public Procurement Regulatory Authority (PPRA)? 
 
WTO Secretariat's Report, page 54, para. 60 
 
According to the report, a number of institutional a nd legislative changes in Pakistan's trade remedy 
regime have taken place just in advance and since the last review.  
 
34. Could Pakistan elaborate on whether it considers these changes to meet the desired intent? 
Are further changes currently under wa y or foreseen in the near future? 
 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(ii) Exports duties and taxes 
 
WTO Secretariat's Report, page 59, para. 77 
 
It is stated that "Export taxes are prohibited ( section 18(2), Customs Act). However, the CBR can 
impose "regulatory duties" of up to 100% on exports , by notification without parliamentary approval 
(section 18(3))." 
35. Could Pakistan explain what exactly "regulat ory duties" mean and whether these duties are 
published? 
 WT/TPR/M/193/Add.1 
Page 8  
 
 It is further stated that "Duties of 25% were applied to exported ferrous  and non-ferrous waste and 
scrap in June 2006 […] due to domestic shortages; "r egulatory" duties also apply […] at 20% on hides 
and skins […]"  36. Could Pakistan clarify if the 25 % export duties on non-ferrous waste and scrap  are still in 
place? 
 37. Could Pakistan describe on what ground s can regulatory duties be applied?  
 38. What is the difference between "regulatory duties" and "export taxes"? 
 
(iv) Export subsidies  
 
WTO Secretariat's Report, page 60, para. 85 
 According to the WTO Secretariat's Report, Paki stan has in place numerous assistance schemes which 
add complexity to Pakistan's trade regime. Accord ing to the report, Pakistan has not notified any 
export assistance to the WTO since its last Review.   
39. Could Pakistan indicate if it has enacted new export assistance schemes since its last Trade 
Policy Review?  
 
40. When does Pakistan intend notifying such programs to the WTO? 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation  
 
WTO Secretariat's Report, page 68, para. 105  
The Secretariat's report states that "many indirect taxes remain unduly complex and lack transparency 
due to different tax bases across products and specified  minimum levels; a multiplicity of taxes, often 
narrowly based due to numerous concessions/excepti ons; administrative inefficiency with corrupt 
elements' cumbersome assessment procedures' and endemic tax evasion due to the large informal 
economy".  
 
41. Could Pakistan elaborate on the planned m easures envisaged to continue pursuing the 
necessary tax reforms so as to enhance transpar ency, simplicity and predictability of its tax 
system? 
 
42. How does Pakistan plan to reduce tax evasion and increase the number of taxpayers?  
43. Is Pakistan already undertaking any measures so as to make tax procedures less 
administratively complex? 
 
WTO Secretariat's Report, page 68, para. 108 
 
We note that General Sales Tax (G ST) is generally levied at the same rate on impor ted and domestic 
goods. However, some exemptions still di scriminate directly against imports. 
44. What are Pakistan's plans to abolish these exemptions?  
  WT/TPR/M/193/Add.1 
 Page 9 
 
 
 WTO Secretariat's Report, page 69, para. 109 
 
The EC is concerned about the lack of clarity a nd information on the minimum valuation addition. 
The information available does not allow for a fu ll assessment of the measures but this may have 
potentially serious discriminatory effect on imports. 
 
45. Does Pakistan plan to enhance transparency in  this regard so as to ensure that minimum 
valuation addition has not a discriminatory impact on imports?  
 
(v) Intellectual property rights (IPR)  
 
WTO Secretariat's Report, page 77, para. 134 
 
We very much appreciate the decisive steps undert aken by Pakistan to strengthen its intellectual 
property protection, in pa rticular enforcement. However, accord ing to the WTO Secretariat's Report, 
Pakistan participates in only two of the 24 treaties of the World Intellectual Property Organization. In 
the meantime, "Vision 2030, adopted in May 2005, aims  to turn Pakistan into a developed country by 
2030 through rapid and sustainabl e development by, inter alia, deploying knowledge-intensive import 
items " (Summary observations, page x, para. 10). 
 46. Could Pakistan please explain how it plans to st rengthen the protection of  intellectual property 
rights so that its economy can be benefited from receiving more knowledge-intensive 
imports?  
 
IV. TRADE POLICIES BY SECTOR 
(1) O
VERVIEW  
 
WTO Secretariat's Report, pages 80-110, para. 1-106 
 
We note that under Chapter IV there is no informat ion on the leather sector and the hides and skins 
sector in Pakistan. In the EC’s view, these are relevant sectors in the Pakistan’s economy and 
therefore, including related information would have been of utmost interest. 
 
47. Could Pakistan provide some relevant informa tion regarding the current production and trade 
volumes in those sectors?  
(2) A GRICULTURE , LIVESTOCK , FORESTRY , AND FISHERIES  
(i) Features  
 
WTO Secretariat's Report, page 81, para. 6 
 
According to the WTO Secretariat's Report, "envi ronmental factors, e.g. rising soil salinity and 
deteriorating groundwater quality, ar e also undermining productivity".  
 
48. Could Pakistan elaborate on how it plans to improve environmental conditions and, more 
generally, how to make its economic  growth more sustainable?  
 WT/TPR/M/193/Add.1 
Page 10  
 
 (5) S
ERVICES  
(ii) Communications 
 
WTO Secretariat's Report, page 104, para. 84 
 49. Could Pakistan provide with a brief descripti on of the satellite market and procedures to 
provide satellite services in the country? 
 
WTO Secretariat's Report, page 105, para. 88 
 50. Is Pakistan considering of lowering the licence  fees and abolish the contributions to R&D 
Fund to bring cost of service closer to the actual costs of its provision? 
 
WTO Secretariat's Report, page 106, para. 93 
 51. In interconnection, which is the procedure for making sure that rates are cost based? Does 
Pakistan rely on competition to bring prices down or is there regulatory intervention to make 
sure that such rates are cost based? 
 
(iii) Transport  
 
WTO Secretariat's Report, page 108, para. 99 
 
According to the WTO Secretariat's Report, "all port  terminals at Karachi and Qasim Ports are run by 
international contractors and face competition from the terminal at Port Qasim operated by P&O 
Ports". In the EC's view, instead of P&O Ports it should be read "by DP World".  
52. Could Pakistan confirm this?  
 
With regard to Pakistan's policy concerning th e carriage of government cargo, for example, the 
requirement that the transportation of crude o il is conducted by the Pakistan National Shipping 
Corporation.  
53. Could Pakistan comment on whether it intends to review this practice in order to facilitating 
open access to the market for international maritime transport operators? 
 54. Could Pakistan provide information as to th e operation of the 2002 Shipping Ordinance which 
reserves the carriage of 40% of Pakistan’s ex ternal trade for Pakistani vessels and the 
activities of the Shipping Rates Advisory Board?  
55. Does Pakistan intend to review these measures in favour of practices that are conducive to 
open access to the market for international maritime transport services? 
 Some transport operators have noted that they are taxed 4% freight tax on both import and export 
revenues.  
 
56. Could Pakistan please comment on this? 
 
It is understood that all Afghanistan transit cargo is controlled by the National Logistic Cell which 
can issue a No Objection Certificate, at a char ge, to assign the carriage of such cargo to other 
operators. 
  WT/TPR/M/193/Add.1 
 Page 11 
 
 
 57. Could Pakistan comment on whether the charge levied can be eliminated and provide 
information as to what this charge covers? 
EUROPEAN COMMUNITIES - ADDITIONAL QUESTIONS  
I. ECONOMIC ENVIRONMENT 
 
WTO Secretariat's Report, page x, para. 8 
 
According to the WTO Secretariat's Report, "Pakis tan's investment framework has hardly changed 
since its previous Review.  Only a few sectors (e.g. me dia, tourism, and air transport) remain closed to 
foreign investment or subject to restrictions".  
 
1. Could Pakistan elaborate on the reasons fo r not having made further progress in the 
liberalization of its investment framework?  
 2. Could Pakistan indicate whether it has plans to un dertake further liberalization, and if so, in 
which sectors?  
 
(3) M
AIN MACROECONOMIC POLICY DEVELOPMENTS  
(i) Monetary and exchange rate policy  (b) Exchange rate policies  
 
WTO Secretariat's Report, page 7, para. 15 
 
The WTO Secretariat's Report states: "While the nomin al effective exchange rate depreciated by some 
15% (slowed by SBP intervention) from 2001/02 to 2006/07, higher inflation relative to trading partners means that the real exchange rate has appreciated continuously since 2003/04 (1.9% in 
2005/06 and 0.8% in 2006/07). This may have contri buted to Pakistan's declining international 
competitiveness; the fall in export growth in 2006/ 07 to 0.4% (9.9% in 2005/06) also reportedly 
reflected one-off supply factors and EC-specific preferences and safeguards".   3. Is the Government of Pakistan considering the introduction of greater exchange rate flexibility 
in order to align the value of its curre ncy to its macroeconomic fundamentals?  
(4) M
AIN STRUCTURAL POLICY DEVELOPMENTS  
(i) Tax and expenditure reforms  (a) Taxation  
 
WTO Secretariat's Report, page 9, para. 22 
 
According to the WTO Secretariat's Report, "The number of people paying tax remains "abysmally 
low", despite improvements in 2006/07. Only 1.5% of  the populations are registered taxpayers:  less 
than half of these file income tax returns, and one tenth file GST returns. Moreover, the sectoral 
incidence of the tax burden is highly uneven and th e overall burden falls disproportionately on large-
scale manufacturing. Agriculture (largely a provi ncial tax matter), which, like manufacturing, 
accounts for almost one fifth of GDP, contributes only  1-2% of total tax revenue while manufacturing 
accounts for well over half; the authorities expect this imbalance to improve as tax reforms progress".   4. Which steps are the Pakistani authorities taking in  order to distribute the tax burden sectoral 
incidence and to increase the tax base?  
 WT/TPR/M/193/Add.1 
Page 12  
 
 II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(4) T
RADE AGREEMENTS AND ARRANGEMENTS  
(i) World Trade Organization (c) Dispute settlement  
 
Pakistan's Report, page 11, para. 43 
 
The Report by the Government states: "On 8th November 2006, Pakistan issued implementing legislation on the "ICSID Convention" on the Settle ment of Investment Disputes between States and 
Nationals of Other States. Before this, the "New York  Convention" also entered into force in Pakistan 
on the 12 October 2005. Both these measures are majo r steps forward in demonstrating Pakistan's 
commitment to transparency in the resolution of international investment disputes".  
5. Regarding the "New York Convention" coul d Pakistan please explain why some public 
companies are challenging international awards in Pakistani courts instead of applying the 
regulations of the Convention and recognising these awards?  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
 
WTO Secretariat's Report, page xii, para. 22 
 According to the WTO Secretariat's Report, "P akistan still has no uniform labelling and marking 
system".   6. Is Pakistan determined to implement measu res in order to harmonize the labelling and 
marking system?  
 
7. If so, what measures does Pakistan intend undertaking? 
 
(ii) Tariffs 
(iii) Customs valuation, minimum import prices and preshipment inspection  
 
WTO Secretariat's Report, page 47, para. 33  
According to the WTO Secretariat's Report, "Customs  has used its "take over" legislation introduced 
in 2006 to determine customs values of targeted  goods to guard against rampart fraudulent under-
invoicing. If the importer does not agree to raise the d eclared value to this offer, Customs "takes over" 
the goods and sells them to the local bidder, paying the importer his declared value plus 5%. Customs 
has "taken over" only one import consignment, of motor cycle parts".  Local manufacturers are trying to stop these unfair trade practices by importing goods that are being under-invoiced in smaller quantities at actual prices  and recording these prices with the Valuation 
Department of the Central Board of Revenue in Ka rachi, thus benchmarking them as reference prices 
for subsequent imports of goods.  
 8. Could Pakistan inform us whether it intends  to change Section 25A, Customs Act to 
 eliminate under-invoicing completely.    WT/TPR/M/193/Add.1 
 Page 13 
 
 
 (iii) Customs valuation, minimum import prices and preshipment inspection 
 WTO Secretariat's Report, page 48, para. 33  
9. Can Pakistan provide information about recen t changes in its customs valuation law, 
providing for a change to the system laid dow n in the WTO Customs Valuation Agreement in 
relation to the sequential order of appli cation of the methods of valuation?  
 10. Is it the case that, now, the customs authorities can determine a custom s value in accordance 
with Section 25 (or 25A) of the 1969 Finance Act in a manner that does not follow the 
hierarchy of valuation methods laid down in the WTO Customs Valuation Agreement? 
 11. Can Pakistan state when it will provide a copy of this legislation to the Customs Valuation 
Committee?  
(x) Standards and other technical requirements  
(a) Standards and quality certification   
WTO Secretariat's Report, page 56, para. 63 
 
According to the WTO Secretariat's Report, "T he Pakistan National Accreditation Council (PNAC) 
remains the national accreditation body for testing laboratories and other conformity assessment 
facilities. It applies international standards and h as accredited 24 testing and calibration laboratories, 
including in pharmaceuticals, textiles, chemicals,  engineering, and food. ..The PSQCA’s System 
Certification Centre was recently established  and is to be fully operational shortly". 
 The PSQAC has to check brands of over 1,000 licensed industries across Pakistan. 
 
12. How is the process of restructuring this agency  going to affect the Certificate System in 
Pakistan?  
 13. Is Pakistan going to enter into agreemen ts on mutual recognition with international 
certification agencies such as Bureau of International Weights and Measures (BIPR), 
Organization of Legal Metrology (OIML), In ternational Laboratory of Accreditation 
Cooperation (ILAC), Asia Pacific Laborator ies Accreditation Cooperation (APLAC) and 
International Accreditation Federation (IAF) in order to comply with requirements like, for 
example, Technical Barriers to Trade (TBT)? 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(iv) Competition and consumer policy  (a) Competition policy  
 
WTO Secretariat's Report, page 77, para. 132 
 It appears from the report that Pakistan is in the process of establishing a new competition regime.  
 14. Could Pakistan please inform us about the content of the new legislation?  
 15. What is its scope of application?  
 
16. When will it enter into force?  
 17. Who will be the enforcement authority and with what resources?  WT/TPR/M/193/Add.1 
Page 14  
 
 18. Who are the sectoral regulators with competence to regulate competition matters and what 
will the interrelationship be with the competition authority? 
 
(v) Intellectual property rights (IPR) 
 
WTO Secretariat's Report, page 79, para. 138 
 
According to the WTO Secretariat's Report, "Claims th at trade marks are weakly  enforced are rejected 
by the authorities. There are also claims that there is patent infri ngement in pharmaceuticals by firms 
being licensed to produce patented drugs, with inconsistent enforcemen t of court injunctions, 
protection against unfair commercial use of test or other data submitted to authorities for registration 
is also said to be inadequate".   19. What kind of measures will Pakistan implement in order to protect the intellectual property 
rights especially in pharmaceutical and agrochemical sectors?  
 
Pakistan's Report, page 15, para. 63 
 
According to the Report by the Government, "Pakis tan has upgraded its regime for the protection of 
intellectual property rights (IPRs) in line with its commitments in the agreement on Trade Related 
Intellectual Property rights (TRIPS). This includ es strengthened protection of intellectual property 
rights and enhanced enforcement m echanisms. An integrated umbrella in the form of "Intellectual 
Property Organization of Pakistan" has been establis hed for dealing with all aspects of IPRs".  
 20. Could Pakistan please inform us about the scope of the interventions carried out by this 
Organization, especially in view of the dema nds placed by the International Federation of 
Phonographic Industry (IFPI) about the situation of piracy in Pakistan?  
IV. TRADE POLICIES BY SECTOR 
(2) A
GRICULTURE , LIVESTOCK , FORESTRY , AND FISHERIES .  
(iii) Main subsectors  (c) Fisheries  
 
WTO Secretariat's Report, page 88, para. 31 
 
According to the WTO Secretairat's Report, "The nu mber of fishing licenses is fixed at 20 for Zone II 
and 10 for Zone III:  there are 18 vacant licenses and no Zone III licensees; 47 applications were 
received at end-August 2006. No licensed foreign vessels operate in Pakistan’s Exclusive Economic 
Zone (EEZ). Such licenses may be granted in exceptional cases where a foreign firm makes a 
"sizeable" investment in establishing value-a dded shore-based facilities, such as canning and 
processing, and transfers technology.  The provi ncial governments of Sindh and Balochistan have 
separate legislation affecting fisheries.  For exam ple, the Sindh Government requires trawlers with 
over six crew to have turtle excluder devices".   
21. Could Pakistan please clarify what it considers to be "sizeable investment" in order to grant a 
fishing license? 
EUROPEAN COMMUNITIES – ANNEX ADDITIONAL QUESTIONS
 
 
EC question 4 liberalisation under SAFTA 
 
Pakistan states that according to the World Bank, Pa kistan is considered "the most transparent and 
liberal" country in South Asia. Such asse ssment is of course very good news.   WT/TPR/M/193/Add.1 
 Page 15 
 
 
 Q1. In order to be able to refer to this in the future, could Pakistan please provide the source of the 
relevant World Bank report? 
 
EC question 9 on coverage of Pakistan's RTAs 
 We very much appreciate the detailed information Pakistan provided to clarify that question.  
 Q2. In order to fully assess coverage of Pakistan's RTAs though, we would appreciate if Pakistan 
could express – if possible - coverage as percentage  of both tariff lines and also of trade .  
 EC question 18 on tariff rates on motor vehicles 
 
We appreciate that tariff rates on motor vehicles have  been reduced by Pakist an since the last TPR 
and welcome that Pakistan aims to provide predictab ility and stability in its tariff regime. Pakistan has 
informed that the year wise tariffs on imported ve hicles were announced for the next five years.  
 
Q3. Could Pakistan please provide more detailed in formation on the planned evolution of this 
tariff over the next five years? At what rate is it at  present? And is it going to stay at that level 
or change?  
EC question 32 on Government Procurement 
 
Pakistan has informed that "Public Procuremen t Rules 2004 do not allow any discrimination on the 
basis of nationality except in cases where any procuring agency decides to limit such participation to 
national bidders only or prohibits participation of bidders of some nationalities in accordance with the 
policy of the Federal Government."  
Q4. Could Pakistan please provide further detail on the criteria applied when procurement 
agencies decide to limit participation to national bidders or prohibit participation of others? Is 
there a mechanism for appeal? 
 
EC question 35 on export taxes/ regulatory duties 
 
The Secretariat's Report states that "export taxes are prohibited (section 18(2), Customs Act). However, the CBR can impose regulatory duties (…) on exports". Pakistan informs in its response 
that such regulatory duty is levied on only two ite ms, namely wheat and non ferrous waste. Pakistan 
also informs that these regulator y duties are time bound and stand rescinded at the expiry of the 
financial year in which they are imposed.  
 
Q5. We would welcome further clarification on the export duty levied on hides and skins. Is this 
indeed an export tax (which though according to  the Secretariat's report should normally be 
prohibited)? Or is it a regulatory duty (which though according to Pakistan should thus stand 
rescinded at the end of the financial year)?  
 The Secretariat's report also states (page 59/ paragraph 77) that a regulatory duty of 30% was levied 
on exported leather goods.  
 Q6. Could Pakistan please clarify which leather goods  are covered and – as above – whether this 
duty is indeed a regulatory duty or rather an export tax?  
 EC question 37 on export taxes/regulatory duties  
Pakistan states in its response, that regulatory duti es were levied to ensure domestic market stability.  WT/TPR/M/193/Add.1 
Page 16  
 
 Q7. Could Pakistan confirm that domestic shortage  is the only legal basis upon which regulatory 
duties may be imposed? If not, which are the othe r justifications provided under the existing 
legislation (CBR)?  
 
Q8. According to the CBR and/ or current practices, what are the procedures, criteria and methods 
for establishing that the justifications for the imposition of regulatory duties have been met? 
EUROPEAN COMMUNITIES – FOLLOW-UP QUESTIONS
 
Original question:   
 
Some transport operators have noted that they are taxed 4% freight ta x on both import and export 
revenues. 
 Could Pakistan please comment on this?  
Answer: 
 There is no tax like "freight tax" on import and export revenues of transport operators.  
  
Follow up question: 
 
With regard to Pakistan's reply to the EC's ques tion on freight tax, we would like to seek additional 
clarifications. Our understanding is that there is a freight tax levied at the rate of 8% on foreign 
shipping companies (not on shippers or consignees) on ocean freight related charges and applied to all 
export freight as well as to import collect freight . Whilst the freight tax is administered on export 
freight under the 'Income Tax Ordinance, 2001', we  understand that Pakistan has more recently begun 
also levying the freight tax on import freight as we ll and with retroactive effect. Please could Pakistan 
explain how this situation is permissible and co mment, with regard to the freight tax, whether 
measures are being envisaged to create an environmen t more conducive to fair and free access to the 
international maritime market.  
BRAZIL
 
 1. The report of the Secretariat has indicated that there are a number of outstanding notifications, 
when Pakistan believes this situation will be corrected? 
 2. Does Pakistan intend to incorporate Codex Alimentarius standards when it reviews its SPS-
related legislation?  
 JAPAN
 
 
Secretariat Report (WT/TPR/S/193) 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(viii) Local-content requirements and indigenization programmes 
 
Question 1: page 53, paragraph 58  
The Secretariat report explains a number of excise tax concessions which favour local content.  
  WT/TPR/M/193/Add.1 
 Page 17 
 
 
 It would be appreciated if the Government of Paki stan indicates any justification for this measure in 
light of national treatment in Article 3 of GATT a nd Article 3.1(b) of the Agreement on Subsidies and 
Countervailing Measures.  
 
(x) Standards and other technical requirements 
 
Question 2: page 56, paragraph 64 
 
According to the Secretariat report, Pakistan’s onl y notifications (25 notifications) to the WTO under 
the TBT Agreement were all submitted in June 2007. 
 
(1) Please explain this reason. 
 (2) Does Pakistan find such a practice problemat ic in terms of maintaining transparency? 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(v) Intellectual property rights (IPR)  
Question 3: page 78, paragraph 135 
 
The Secretariat report states that Pakistan is considering introducing a "section 3(d)-type" provision designed to exclude from patentability the "mere discovery of a new form of a known substance 
which does not result in enhancement of known efficacy  of that substance, the mere discovery of any 
new property or new use of a known substance, a nd the mere use of a known process, machine or 
apparatus – unless that process results in a new product or employs at least one new reactant," 
(1) Please indicate what criterion Pakistan considers to introduce in order to determine the 
difference between a mere discovery (that is  unparentable) and a patentable invention. 
 (2) Please indicate what criterion Pakistan considers to introduce in order to determine the 
enhancement of a known efficacy  of a known substance. 
 
CHINA
 
Secretariat Report, page 20, para. 9 
 
TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(3) T RADE POLICY FORMULATION AND IMPLEMENTATION  
(i) Objectives and strategies  
Trade is an important part of Pakistan's devel opment and poverty-reduction strategy.  Vision 2030, 
adopted in May 2005, aims to turn Pakistan in to a developed country by 2030 through rapid and 
sustainable development by, inter alia , deploying knowledge-intensive import items. 
 Could Pakistan please explain in de tail on how its trade policies c ould contribute to achieve this 
development goal? 
 WT/TPR/M/193/Add.1 
Page 18  
 
 Secretariat Report, page 32, para. 38 
 
(5) F
OREIGN INVESTMENT REGIME  
 
Since its last Review, Pakistan has signed 30 bilatera l investment treaties (BITs) bringing the total to 
48. The authorities indicate that a BIT with the Unit ed States would facilitate greater investment and 
other economic cooperation.  Could Pakistan please explain in more detail on ho w such arrangements would facilitate investment 
and economic cooperation between Pa kistan and the United States? 
 
Secretariat Report , page 52, para. 55 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE (2)  M
EASURES DIRECTLY AFFECTING IMPORTS  
 
(vii) Government procurement 
 
Pakistan is not a signatory or observer to the plurilateral WTO Agreement on Government 
Procurement and does not currently have plans to join it. However, according to the authorities, 
Pakistan’s current government procurement framewo rk is based upon international best practices 
aimed at eliminating corruption, improving tr ansparency, reducing delays, and enhancing 
accountability.   Could Pakistan provide further information on the structure and the operation of Pakistan’s current 
government procurement framework?  
From some sources of information, we have noted th at Pakistan has become an important exporter of 
ethanol internationally.   Could Pakistan provide some information on its ex periences of developing its ethanol production and 
export?  
CHINA – ADDITIONAL QUESTIONS
 
Secretariat Report Page 26, para. 18 II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(4) T
RADE AGREEMENTS AND ARRANGEMENTS  
(ii) Regional and other preferential Arrangements 
As an active promoter and participant of free trade, Pakistan is a member of several regional or 
plurilateral arrangements. 
Could Pakistan please indicate any further plan on its participation of re gional or plurilateral 
arrangements?  WT/TPR/M/193/Add.1 
 Page 19 
 
 
 Page 42, para. 21 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariff 
Currently, Pakistan maintains an  average bound tariff rate 3 times higher than its average applied 
tariff rate. 
Could Pakistan please elaborate the necessity of ma intaining this difference between its bound rate 
and applied rate? 
Page 43, para. 24 
Currently, the average MFN tariff of Pakistan is 14. 5% while the rates for certain products are much 
higher, reaching nearly 90%. 
Could Pakistan please explain the reason of maintaining this high tariff rate for those products? 
CANADA  
 
Report by the Government (WT/TPR/S/193) 
 No questions.  
 
Report by the Secretariat (WT/TPR/S/193) 
 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(5) F
OREIGN INVESTMENT REGIME  
 Para. 35, page 31 
 
The Secretariat Report notes a number of challenges associated with Pakistan’s investment regime, 
including poor coordination and collaboration between  the relevant regulatory bodies, the duplication 
of requisite permissions, and difficulties in enforcing contracts with local partners. 
 1. Could Pakistan please explain what steps ar e being taken to address each of these specific 
issues? 
 (i) Incentives  Para. 36, page 31 
 
The Secretariat Report indicates th at the government would like to enhance the role of special 
economic zones (SEZs) in attracting fore ign direct investment (FDI).   
 2. Could Pakistan please elaborate on the specifics  of its plan to use SEZs in order to attract 
FDI? 
 WT/TPR/M/193/Add.1 
Page 20  
 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs  Para. 20, page 41 
 3. (a) Could Pakistan please explain its plan s for reducing the complexity of its tariff 
structure, in particular reducing the 15 specific rates of tariff, and generally 
simplifying the 14 ad valorem rates ? 
 
 (b) Could Pakistan please further explain wh at it proposes to do to ensure the average 
MFN applied tariff rate continues to dec line, and does not rise again as it did in 
2006/2007? 
 
(c) MFN tariff bindings 
 
Para. 21, page 42  
The Secretariat Report notes that Pakistan’s unb ound tariff items include, inter alia, agriculture 
products such as certain seeds, meat and meat pr oducts. The report further remarks that Pakistani 
authorities provided no comments concerning unbound agriculture items. 
 
4. Could Pakistan please explain the reason or r easons for which it maintains unbound tariffs for 
certain agriculture products includi ng seeds, meat and meat products? 
 
Para. 22, page 42 
 
5. Could Pakistan please comment on how it inte nds to reduce its bound tariff rates to more 
closely approximate its applied tariff rates?  
 
(f) Regulatory duties  
Para. 25, page 45  
Pakistan imposes "regulatory duties" in addition to  import tariffs on certain imports, and these have 
become less transparent recently.    
6. (a) Could Pakistan please explain how it in tends to make the use of these regulatory 
duties more transparent and open to public scrutiny?   
  (b) Could Pakistan please indicate when these regulatory duties will be phased out? 
 
(g) Concessions and exemptions 
 
Para. 29, page 46  
 
The widespread use of import tariff concessions a nd exemptions reduces overall economic efficiency 
in Pakistan, and makes the Pakistani tariff system less transparent.   
 
7. Could Pakistan please comment on how it intends  to make the use of import tariff concessions 
and exemptions more transparent, and to redu ce their use, to improve the Pakistani economy? 
  WT/TPR/M/193/Add.1 
 Page 21 
 
 
 (ix) Contingency measures 
 Para. 60, page 54 
 
Canada is a strong proponent of a fair and tran sparent, rules-based trade system which includes 
providing Parties with the opportunity for judicial review. The Secretariat Report indicates that 
Pakistan has terminated its Appellate Tribunal in 20 03 but plans to re-establish an Appellate Tribunal. 
 8. (a) Could Pakistan provide more informati on regarding when it plans to re-establish the 
Appellate Tribunal? 
 
 (b) Could Pakistan also confirm that the Appellate Tribunal, once re-established, will 
hear appeals against anti-dumping and countervailing decisions?   
(x) Standards and other technical requirements 
(b) Sanitary and phytosanitary regulations 
 
Para. 66, page 56  
The Secretariat Report states that "[i]mplementation of Pakistan’s sanitary and phytosanitary regime 
is reportedly complicated by the number of federal and provincial agencies involved (...)."  However, 
according to authorities, no provincial agency is involved in the implementation of such measures. 
 
9. Could Pakistan please address this  inconsistency and provide clarification as to whether or not 
provincial agencies are involved in the im plementation of Paki stan’s SPS regime?  
Para. 66, page 56 
 The Secretariat report refers to a National SPS Task force which assists stakeholders to disseminate 
information and develop strategies to implement SPS policies.  10. Could Pakistan please indicate which federa l and/or provincial ministries or government 
bodies are involved in the National SPS Taskforce? 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(v) Intellectual property rights  Para. 135, page 78 
 Canada notes that according to the Secretariat Repor t for Pakistan, "[t]he Government can reportedly 
grant public institutions, including the National B ook Foundation, royalty-free compulsory reprint 
rights where considered in the public interest, w ithout the holder’s authorization…[t]he authorities 
indicate that this provision has never been used".    11. (a) Could Pakistan please provide furt her information describing under which 
circumstances such compulsory rights may be granted?  
  (b) Could Pakistan please indicate why it has chosen not to require payment of royalties 
to the rights owner under such circumstances?  
 WT/TPR/M/193/Add.1 
Page 22  
 
 Para. 135, page 78 
 
The Secretariat Report indicates that, "[i]t is also claimed that trade mark protection is inadequate, 
since rights of prior use are not recognized in the Trademarks Registry.   However, the authorities 
indicate that the legislation provides "substantial" tr ade mark protection for prior use by merchants or 
manufacturers, and that these provisions have b een upheld by several judicial precedents." 
 12. Could Pakistan please provide further informa tion on the protection for prior use provided by 
legislation?  Is there a procedure that a llows merchants or manufacturers to oppose the 
granting of a trade mark based on prior use, either before or after publication?   
 
Para. 138, page 79 
 
The Secretariat Report indicates that, "[s]ome see fi nes and criminal penalties, such as no mandatory 
minimum sentences in some areas, e.g. copyright, as an inadequate deterrent" and "[t]he IIPA has 
estimated that piracy rates remain high for records and music (100% in 2006, up from 83% in 2002), 
books, business software (up from 80% to 84%), entertainment software, and motion pictures." 
 13. Canada appreciates Pa kistan’s efforts in IPR enforcement and would be grateful if Pakistan 
could provide further information about ho w fines and penalties related to copyright 
infringement are imposed. 
 IV. TRADE POLICIES BY SECTOR (4) M
ANUFACTURING  
(ii) Food processing  
Para. 56, page 95  
The Secretariat Report notes that the ".. domestic oil extraction industry is protected by high specific 
tariffs on oils and seeds, equivalent to ad valorem  rates of 65-70%."  The Government Report, 
however, indicates that the maximum ta riff has been reduced to 25%.   
 
14. Could Pakistan please explain the apparent discrepancy and the measures to be taken to 
reduce the tariffs on oil and seeds to le vels in keeping with other sectors? 
 
(5) S
ERVICES  
(ii) Communications 
(a) Telecommunications 
 Paras 86 and 88, page 105 
 
The Secretariat notes that "liber al rules govern foreign investment in telecommunications: 100% 
foreign equity is allowed in all telecommunications  services (…)."  However, the Secretariat further 
notes that criteria for issuing a license include, among others, Pakistani ownership. 
 15. Could the Government of Pakistan please clar ify what is meant by "Pakistani ownership?" 
  WT/TPR/M/193/Add.1 
 Page 23 
 
 
 HONG KONG, CHINA  
 
Contingency measures 
 
WT/TPR/S/193, page 23, para. 11 
 
1. The Secretariat Report states that for continge ncy protection requests that are generally anti-
competitive and could "excessively" raise costs to consumers or intermediate inputs users, the 
National Tariff Commission (NTC) would not apply its statutory guidelines in providing protection to the industry concerned.  It is fu rther mentioned that the statutory guidelines are 
based on industry need rather than economic e fficiency and they disregard effects of the 
protection on national welfare.  Does it mean that in not applying the guidelines, economic efficiency and national welfare effects will be taken into account by the NTC in such cases?  
Are there any separate guidelines to determin e whether the requests are generally anti-
competitive and could "excessively" raise costs to consumers or intermediate inputs users?  In 
this connection, will these stakeholders be give n opportunity before the NTC to express their 
views on the effects of the contingency protection on them? 
 
Investment 
 
WT/TPR/S/193, page 31, para. 35 
 
2. According to the Secretariat Report, there are still some limitations affecting investment.  We 
would like to know whether Pakistan has any plan to remove such limitations, in particular, improvement in its arbitration/judicial pr ocedures for resolving commercial disputes. 
 
Competition 
 
WT/TPR/G/193, page 14, paras. 61-62 
 
3. We note from the Government Report that apart from enacting a new competition law and 
replacing the Monopoly Control Authority with  the Competition Commission, independent 
regulatory bodies have been established to promote competition in specific markets (e.g. 
tourism, energy).  We would like to seek cl arification on the relationship between these 
regulatory bodies and the Competition Commission.   Are these independent regulatory bodies 
performing a different or complementary role  to that of the Competition Commission? 
 Banking  WT/TPR/S/193, page 101, para. 74  
4. As reflected in the Secretariat Report, exis ting foreign banks and those formed under certain 
prescribed criteria are allowed to open up to  100 branches as per Branch Expansion Plans 
submitted and approved by the State Bank of Pakistan.  Would Pakistan clarify whether this 
branching permission is granted only for forei gn banks entering through branch mode, or for 
both foreign bank branches and wholly fore ign-owned locally incorporated banking 
subsidiaries?  While the maximum number of br anches inscribed in Pakistan’s existing GATS 
schedule of specific commitments is much lower at only 25, would Pakistan consider raising 
the ceiling in its next offer so as to increase  the legal certainty and predictability of its 
banking regime? 
 WT/TPR/M/193/Add.1 
Page 24  
 
 Insurance 
 WT/TPR/S/193, page 103, para. 81 
 
5. We understand from the Secretariat Report that  fully foreign-owned life   and non-life 
insurance firms which are locally incorporated  are permitted to operate in Pakistan.   
However, as set out in its GATS   schedule of specific commitments, Pakistan’s commitments 
are limited to existing foreign insurance services providers only and those providing life insurance are subject to foreign shareholding ceilings. Would Pakistan confirm whether new 
fully foreign-owned life and non-life insurance firms are currently allowed to enter its 
market?  
 
Transport services and logistics and related services  
WT/TPR/S/193, page 108, para. 98 
 
We note from the Secretariat Report that the Paki stan Government has launched a national trade 
corridor initiative, aimed at revamping the whole transport sector, including ports, roads, railways, 
and aviation.  We would be grateful for more deta ils about the initiative, including the coverage, its 
latest progress, the expected timef rame and results for the initiative. 
 
CHINESE TAIPEI  
 
Secretariat report: WT/TPR/S/193 
 
I. ECONOMIC ENVIRONMENT 
(3) M AIN MACROECONOMIC POLICY DEVELOPMENTS  
(i) Monetary and exchange rate policy 
Page 6, paragraph 11 
It is indicated in the report that the independence of the State Bank of Pakistan (SBP), the authority 
responsible for monetary and excha nge rate policies, has been strengthened during the review period 
and that the Ministry of Finance has "little or no influence" over these policies. However, the Minister 
of Finance still chairs the Monetary and Fiscal Po licy Coordination Board, which discusses Pakistan’s 
financial and fiscal stances.   
On the assumption that financial issues, including mo netary and exchange rate policies, are addressed 
by the Fiscal Policy Coordination Board chaired by th e Minister of Finance, we are interested in 
knowing how the SBP manages to maintain its i ndependence from the Ministry of Finance.  
 
For example:  
a)  Does the Minister of Finance participate in and chair the Fiscal Policy Coordination Board in 
his/her own private capacity only, rather than on behalf of his/her Ministry? 
b)  Is the Monetary and Fiscal Policy Coordination Board not an 
  inter-agency body for making decisions on financ ial issues, but simply a  consulting body for 
the SBP? 
  WT/TPR/M/193/Add.1 
 Page 25 
 
 
 (4) M AIN STRUCTURAL POLICY DEVELOPMENTS  
(ii) Privatization  
Page 10, paragraph 25;  page 75, pa ragraph 128;  page 76, Table III.8 
 
As stated, privatization is being revitalized as a key element of Pakistan’s structural reforms, but the privatization programme seems to have s lipped behind schedule for various reasons. 
 
a)  Could Pakistan please advise what priorities, if  any, are listed in the privatization programme?  
b)  Are there any limitations on foreign participati on in the privatization of  those priority-listed 
State-owned enterprises? 
 
(7) T
RENDS AND PATTERNS IN FOREIGN INVESTMENT  
 
Page 17, paragraph 40;  page 31, paragraph 35 
 
UNCTAD classifies Pakistan as an" under performer" with "low FDI potential and performance". Furthermore, Pakistan’s latest rankings on the In ward FDI Performance Index and the Inward FDI 
Potential Index are below the average. Neverthele ss, the Pakistan authorities indicate that major 
investment limitations remain. 
Could Pakistan please advise whether a plan exists to effectively remove those major investment 
limitations as identified by the authorities? If so, it would be appreciated if Pakistan could elaborate 
further on the details of such a plan. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURES 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(x) Standards and other technical requirements (d) Marking, labelling and packaging 
Page 58, paragraph 72 As indicated, imports failing to meet labelling and marking requirements are seized and destroyed by 
Customs. 
 
In our view, the above-mentioned penalties appear to  be disproportionate to the seriousness of the 
violations. Failure to meet labelling and marking requirements may well not be accompanied by any 
health or safety concerns and very often can be easily corrected. Could Pakistan, therefore, please 
clarify whether any corrective actions are allowe d for minor offenses concerning the labelling and 
marking requirements, short of the seizure and destruction of the products concerned? 
 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(viii) Export promotion 
 
Page 67, paragraphs 102 & 103 
As indicated, two-thirds of the export or mark et promotion expenditure in 2005/06 was spent on 
"grants, subsidies and write off of loans" unde r the Export Development Fund (EDF). The EDF’s 
programmes are implemented by various governme nt agencies, including the Trade Development 
Authority (TDA), whose main role is market prom otion, as well as private sector and business support 
bodies, e.g. chambers and trade associations.  
Could Pakistan please provide further information on the following aspects: WT/TPR/M/193/Add.1 
Page 26  
 
 a)  How the EDF’s budget amount is raised and wh at shares of the fund are allocated respectively 
to the TDA and to various chambers and trade associations? 
b)  Whether the TDA offers subsidies to Paki stani participants in trade delegations and 
exhibitions. If so, how does this operate? 
c)  Would the TDA offer assistance to a forei gn business that wishes to gain  access to the 
Pakistani market? If so, what type of assistance would be provided? 
d)  Would the TDA provide assistance to a fo reign company which intends to establish a 
strategic alliance with a Pakistani company in fields like marketing channels, brand 
cooperation or share holding? If so, what type of assistance would be provided? 
IV. TRADE POLICIES BY SECTOR 
(3) M
INING AND ENERGY  
(ii) Energy 
 Page 90, paragraphs 38 & 39 
 a) Since March, 2006, the Oil and Gas Regulator y Authority (OGRA) has been responsible for 
regulating the midstream and downstream petroleu m industry. The Ministry of Petroleum and 
Natural Resources is in charge of regula ting the upstream oil and gas activities. 
As we know, the petroleum industry’s distributi on system and supply chain comprises a large 
number of businesses and it is necessary for all partic ipants to operate together very closely in 
order to make the industry as a whole sustainable.   We are therefore interested in whether any 
special coordinating mechanism has been established between the aforementioned two 
authorities to ensure the consistency of energy  policies, and, if so, how this mechanism 
works?  
b) Minimum Pakistani equity limits apply for ons hore oil exploration zones  and, if unmet, the 
Government Holdings (PvT) Ltd may acquire the minimum interest.  
Could Pakistan please provide us with details of  the domestic equity limits? Furthermore, if a 
timetable exists for the loosening or removal of those limits, we should be grateful for details 
of this as well. 
c) Firms must meet minimum employment require ments, training, and welfare expenditures, and 
special arrangements apply to exploration in offshore areas. 
Could Pakistan please provide details of these above -mentioned ‘special  arrangments’? Are they 
applied equally to local and foreign enterprises?  If not, could we please be informed of the additional 
requirements applying to foreign investors? 
(5) S
ERVICES  
(ii) Communications 
(a) Telecommunications – Anti-competive rules 
As indicated in the report, the Pakistan Tel ecommunications Authority’s (PTA) frameworks for 
mergers/acquisitions and for prohibiting anti-compe titive conduct are being prepared, and it is in the 
process of announcing anti-competitive regulations. 
Could Pakistan please advise when it expects th e PTA’s frameworks for mergers/acquisitions and 
prohibiting anti-competitive conduct to  be established? We would also appreciate receiving details of 
the timeline to the announcement  of anti-competitive regulations. 
  WT/TPR/M/193/Add.1 
 Page 27 
 
 
 AUSTRALIA  
 II. TRADE POLICY REGIME (4) T
RADE AGREEMENTS AND ARRANGEMENTS  
(i) WTO  
1. Australia notes from the Secretariat’s repor t (WT/TPR/S/193, page 25, paragraph 16 and 
Table II.3) that Pakistan has made no notifications under the Agreement on Agriculture since 2001 (when it submitted notifications for domestic support and export subsidy commitments for the 
marketing years 1999-2000 and 2000-2001).  Can Pa kistan explain why it has made no subsequent 
notifications and advise when it will be ab le to submit its overdue notifications? 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs 
 
2. Australia notes that since the last review, Pakist an has unilaterally bound much of its tariff in 
the WTO (WT/TPR/S/193, page 42, paragraph 22), with its proportion of bound tariff lines rising 
from 36.6% to 98%.  We note, however, that the bound rates are, on average,  four times higher than 
the applied rates, 61% vs 15%.  Can Pakistan a dvise on what basis it established the far higher bound 
rates now entered into its bound tariff schedule? 
 
IV. TRADE POLICIES BY SECTOR 
(2) A GRICULTURE , LIVESTOCK , FORESTRY , AND FISHERIES  
(ii) Policy framewor k and developments 
(c) Domestic support measures  
3. The Secretariat report notes that rural pove rty remains high and agricultural productivity is 
low (WT/TPR/S/193, page 80, paragraph 2), suggesting there is room for further reform in Pakistan’s 
agriculture sector.  The report by the Secretariat further notes that domestic wheat prices have been on 
average 20 per cent below import parity in recent years, suggesting that market price support 
arrangements are penalising wheat farmers (WT/TPR/S /193, page 84, paragraph 18). The report also 
notes that market price support arrangements penalise rice and cotton farmers. In the interest of 
allowing producers to benefit from higher global commodity prices, does the Pakistan government 
conduct regular reviews of the level of price suppor t, and has it considered phasing out price support? 
 (5) S
ERVICES  
 
4. Cross-border trade in services is growing very  rapidly, and both deve loped and developing 
country members of the WTO have become dynamic exporters.  Pakistan is yet to make any commitments on cross-border (Mode 1) supply (W T/TPR/S/193, page 99, paragraph 68).  Noting 
developments in the internet and communications technologies generally, Australia is particularly 
interested in the situation with regard to the professional services sectors.  Does Pakistan have any 
current regulatory barriers to cross-border suppl y, and is Pakistan willing to make Mode 1 
commitments, particularly in the professional services sectors?  
 WT/TPR/M/193/Add.1 
Page 28  
 
 REPUBLIC OF KOREA
 
 
I. TRADE POLICIES AND PRACTICES BY MEASURE 
 
Customs clearance procedure 
 WT/TPR/S/193, p. 47, para. 33 
 
The Pakistani customs authority uses reference impo rt prices to investigate allegations of fraudulent 
under-invoicing for targeted products, which vary by country. In the case that the customs authority 
determines the declared value of an item to be significantly lower than its actual value based on 
import prices registered in the database, adjusted  duties are then applied at the discretion of the 
authority. This discretionary import price adjustment  more often than not results in friction between 
the authority and importers as well as delays in  customs clearance.  Please elaborate plans the 
Pakistani Government have to enhance transpar ency regarding customs declarations made by 
importers and to alleviate delays in customs clearance.  
 
Government procurement 
 
WT/TPR/S/193, p. 52-53, para. 52-54 
 Certain competitive bidding practices in Pakistan are not in compliance with international standards. 
For example, although the lowest bidder passes a technological assessment, a few market leading 
companies are given a second chance to improve th eir initial bids. Furthermore, the selection of 
certain vendees is often motivated by non-economic f actors. Although Pakistan is not a signatory to 
the WTO Agreement on Government Procurement, all government procurement procedures need to 
be conducted in a fair and transparent manner, b ased on international practices aimed at improving 
transparency and enhancing accountability.  Please ela borate plans the Pakistani Government have in 
order to implement a fair and transparent government procurement bidding system.  
Intellectual property rights  
WT/TPR/S/193, p.78-79, para. 137-138  
Recently the distribution of pirated products has beco me widespread in Pakist an with the weakening 
of IPR enforcement by the FIA (Federal Investig ation Agency). Trademark infringements such as 
pirated mobile phones are also prevalent.  Please el aborate plans the Pakistani Government have in 
order to enhance IPR protection. 
II. TRADE POLICIES BY SECTOR 
 WT/TPR/S/193, p. 104-107 
 
Services:  Telecommunications 
 Several value-added telecommunication services, su ch as voice mail, electronic data interchange, 
Code and protocol conversion, ha ve not been included in the WTO commitments on services. Please 
indicate whether Pakistani Government has any pl an to make further commitments on value-added 
telecommunication services. 
  WT/TPR/M/193/Add.1 
 Page 29 
 
 
 CHILE  
 
Del Informe de la Secretaría (Documento WT/TPR/S/193) 
 RÉGIMEN DE LA POLÍTICA COMERCIAL: MARCO Y OBJETIVOS 
Acuerdos y arreglos comerciales 
ii) Acuerdos regionales y otros acuerdos preferenciales c) Acuerdos bilaterales  Pág. 36, párrafo 27 
 
Pregunta:  Se solicitan mayores detalles sobre el contenido y alcance del ALC entre Pakistán y MERCOSUR. El informe indica que las negociaci ones empezarán en 2007, ¿ya se han iniciado? 
POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
I. Introducción 
 
Pág. 46, párrafo 6 
 
Pregunta: El informe indica que algunas entidad es estatales gozan de derechos exclusivos de 
importación respecto de ciertas materias primas ¿Cuales son esas entidades públicas y respecto de que materias primas tienen de rechos exclusivos? 
 
IV. Medidas que afectan a la producción y al comercio 
ii) Asistencia a la producción Juntas de desarrollo  
Pág. 46, párrafo 5, y Pág. 94, párrafo 125 
 
Pregunta: ¿En que consisten las Juntas de Desarrollo , quienes las conforman, cuantas existen y de que 
manera se ven beneficiadas por los derechos de importación?  
POLÍTICAS COMERCIALES, POR SECTORES 
V. Servicios 
iii) Transporte Aéreo Páginas 139 y 140, Párrafos 101-102. 
 
Pregunta: Sin perjuicio de su política de "cielos abiertos", ¿Bajo que condiciones estaría dispuesto 
Pakistán a liberalizar el cabotaje para operadores ex tranjeros sin límite de participación propietaria? 
 
ARGENTINA
 
 III. TRADE POLICIES AND PRACTICES BY MEASURE (1) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Registration and documentation requirements 
 Paragraph 10, page 38  
The Secretariat Report states in paragraph 10, page 38 , that Pakistan introduced in February 2002 the 
Pakistan Customs Computerized System (PACCS). Its full roll-out, initially planned for June 2007, 
has slipped. Could Pakistan inform how long will it  take to complete the full implementation of this 
system? What are the steps needed  and the average time in order to  clear goods in those ports that 
have not yet implemented the PACCS?   WT/TPR/M/193/Add.1 
Page 30  
 
 (v) Import prohibitions, quotas, restrictions, and licensing 
Paragraph 46, page 51 
The Secretariat Report states that imports of certa in goods eligible for tariff exemptions/concessions 
require ministerial or other approval. For example,  the Ministry of Food, Agriculture and Livestock 
must certify duty-free imports of wheat flour. Could  Pakistan indicate what the requirements to 
obtain such tariff exemptions/concessions are? What  are the criteria used to grant such tariff 
exemptions/concessions?  
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(v) Intellectual property rights (IPR) 
 
Paragraphs 134 and 137, pages 77 and 78  
The Secretariat Report in paragra phs 134 and 137 mentioned different measures taken by Pakistan to 
strengthen intellectual property protection, in par ticular enforcement. How does Pakistan assess its 
experience in that regard? Could Pakistan explain in more detail the interaction among the relevant 
agencies to boost enforcement and reduce piracy?  
Paragraph 136, page 78 
 
The Secretariat Report states that in 2006, 247 patent s were granted. Could Pakistan inform what the 
sectors in which those patents were granted are? 
 
UNITED STATES
 
 WT/TPR/S/193 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 (1) I
NTRODUCTION  
 
Page 36, paragraph 3 :  The Secretariat report indicates that th e use of minimum values in Pakistan no 
longer exists. When did Pakistan el iminate the use of minimum values? 
 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs (f) Regulatory duties 
 
Page 45, paragraph 25 :  The Secretariat’s report notes that Pakistan is phasing out "regulatory 
duties," but some still remain.  When will they a ll be eliminated? Do we understand correctly that 
there is no public list of products affected by th ese duties and their corresponding rates?  Also, the 
report mentions that "the removal in 2005/06 of the legislative requirement for these duties to be 
imposed subject to NTC recommendations was aimed at providing greater flexibility in using them; 
however, it has reduced their transparency and public  scrutiny." Please define "regulatory duties" and 
explain how Pakistan applies and administers these " duties" in a manner consistent with Pakistan’s 
WTO obligations? 
 
(iii) Customs valuation, minimum import prices and preshipment inspection 
 
Page 47-48, paragraph 33 :  The Secretariat reports that the use of "transaction values applies to only 
some 90-95% of imports and is  used unevenly on food and cons umer goods."  Please explain  WT/TPR/M/193/Add.1 
 Page 31 
 
 
 Pakistan’s customs valuation procedures regardi ng imports of food products.  Please explain how 
Pakistan uses the 2006 "take over" legislation in a manner consistent with the WTO Customs 
Valuation Agreement?  
(iv) Other levies, charges, and taxes 
(b) Other 
 
Page 49, Paragraph 38 :  The 2007/08 budget recently changed Pa kistan’s Customs Act to allow fees 
and charges to be levied on imports for services (examination, scanning, and inspection).  According 
to the Secretariat, the legislation does not specify th at these fees are to be levied on a cost recovery 
basis.  What steps is Pakistan taking to en sure that these fees remain consistent with GATT 
Article VIII?  
(v) Import prohibitions, quotas, restrictions, and licensing 
(b) Restrictions and licensing 
 Page 51, Paragraphs 45-48 :  The Secretariat’s report describes measures that seem to resemble an 
import-licensing regime.  But Pakistan maintains that  it does not operate an import-licensing regime.  
Please explain how Pakistan administers the quantita tive restrictions outlined in paragraph 48 if not 
through import licensing procedures?  Also, pleas e describe the administrative procedures necessary 
to benefit from the tariff exemptions /concessions outlined in paragraph 46? 
 (vii) Government procurement 
 
Page 53 :  According to paragraph 53, "direct tenderi ng is allowed when no advantage is envisaged 
from competitive bidding."  Who makes the determin ation that "no advantage is envisaged from 
competitive bidding"?   Is that decision reviewable by an impartial authority?    
 With regard to paragraph 54 : 
 - When bidding is limited to national bidders, is that restriction included in the notice of the 
procurement?  If not, where is it provided? 
 
- With regard to the statement that: "Procuri ng agencies must provide domestic (including 
foreign) suppliers price preferences where th is is government policy," please describe the 
circumstances under which foreign suppliers ar e given price preferences.  Are foreign 
suppliers given the price preference when th ey meet the domestic value added content 
requirements? 
 - Is there any impartial authority in Pakistan to  which suppliers may take  complaints regarding 
the conduct of procurements?  
(ix) Contingency measures 
 
Page 54, paragraph 60 :  The Report indicates that Pakistan h as taken no countervailing or safeguard 
actions, but that it notified countervai ling duty regulations in October 2002 
(G/SCM/N/1/PAK/2/Suppl.1).  Has Pakistan’s c ountervailing duty regime undergone changes since 
that time?   WT/TPR/M/193/Add.1 
Page 32  
 
 (x) Standards and other technical requirements 
(b) Sanitary and phytosanitary regulations 
 
Page 56, paragraphs 66-67 :  Please identify the activities that Pakistan’s National SPS Taskforce has 
undertaken to ensure provincial leve l implementation of SPS policies.  Wh at is the status of Pakistan’s 
governmental review of its SPS legislation?  What is the timetable for this review? 
(d) Marking, labelling, and packaging  
 
Page 58, paragraph 72 :  The Report states that "Imports failing to meet labelling and marking 
requirements are seized and destroyed by Custom s."  Please explain why Pakistan believes it 
necessary to destroy such imports.  Has Pakistan c onsidered returning the g oods to the exporter to 
allow for their sale in another market, wher e the goods meet the labelling requirements? 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
 Pages 45-54 and 60-75 :  According to the Report, Pakistan maintains numerous types of industry 
support and incentive programs, including, inter alia , duty and tax concessions, sector-specific 
schemes, export assistance, local-content or "indi genization" programs, input subsidies, and 
concessionary credit.  But Pakistan has not no tified the WTO under Article 25 of the Subsidies 
Agreement since October 1996 (G/SCM/N/3/PAK).  How will Pakistan address its Article 25 
notification obligations? 
Additionally, the privileges afforded to Pakistan  and certain other Members under Annex VII of the 
Subsidies Agreement do not include an exemption from the ban against subsidies contingent upon the 
use of domestic over imported goods (Article 3.1(b )).  How will Pakistan address its obligations under 
Article 3.1(b) of the Subsidies Agreement?  
(i) Taxation 
 
Pages 68-70, Paragraphs 108-113 :  The Secretariat’s report notes that several of Pakistan’s domestic 
taxes (including the general sales tax and the federal excise duty) can discrimi nate against, or have 
potential to discriminate against, imports.  Can Paki stan explain how these taxes are consistent with 
Pakistan’s obligations under GATT Article III? 
 
(v) Intellectual Property Rights 
 
Trademarks :  How does Pakistan protect well-known marks? Does Pakistan provide an opportunity 
for right holders to oppose a trademark application or to petition for the cancellation of a trademark 
registration? 
 
Geographical Indications :  How does Pakistan prevent the use of misleading foreign or domestic 
geographical indications?  How does Pakistan preven t the use of false geographical indications used 
on wines and spirits? How are owners of trademarks  protected against geographical indications that 
are filed later-in-time? 
  
What are the civil and criminal penalties for wr ongful use of a geographical indication? Who can 
enforce a judgment related to the wrongful use of a geographical indication?  In cases of infringement, 
how will damages be calculated?   
 
Patents :  Page 78, paragraph 135:  The Secretariat’s report states that Pakistan is considering 
introducing a "section 3(d)-type" provision d esigned to exclude from patentability the "mere 
discovery of a new form of a known substance which does not result in enhancement of known  WT/TPR/M/193/Add.1 
 Page 33 
 
 
 efficacy of that substance, the mere discovery of  any new property or new use of a known substance, 
and the mere use of a known process, machine or apparatus – unless that process results in a new 
product or employs at least one new reactant, ther eby allowing only new pharmaceutical discoveries 
and not subsequent medical uses to be patented ."  Please elaborate on whether the provision would 
mean that patents would not be granted in cases  where the invention otherwise meets the three 
categories for determining patentability ( i.e. novelty, inventive step, and industrial applicability). 
Page 79, paragraph 138 :  The Secretariat’s Repor t states that the government is actively considering 
the need for legislation to protect against unfair use of test data.   How does Pakistan intend to protect 
against unfair use of test data and when does Pa kistan intend to introduce such legislation? 
Enforcement:  Pages 77-79, Paragraphs 134-138 :  The Secretariat’s report notes that Pakistan has 
strengthened its intellectual property rights protection and enforcement in  recent years.  What steps is 
Pakistan taking to reduce book piracy and software piracy? 
Page 79, paragraph 138 , the Secretariat's Report states that there are no mandatory minimum 
sentences in some areas, such as copyright.  Has Pakistan considered providing remedies such as jail 
terms and/or monetary fines that cons titute a deterrent to infringement?  
IV. TRADE POLICIES BY SECTOR 
(2) A GRICULTURE , LIVESTOCK , FORESTRY , AND FISHERIES  
Main subsectors  
(a) Crops 
Page 86, paragraph 22 :  The Report mentions that Pakistan can direct licensed flour mills to buy 
wheat from particular sources. Are licenses issued contingent upon the source used to procure the 
wheat? Are there specific stipulations under the Flour Mill Control Order (of 1959) designating 
eligible sources?  
(5) S ERVICES  
(i) Financial services 
Page 103, Paragraph 79 :  The SECP as apex regulator prude ntially supervises and monitors the 
insurance industry (Insurance Ordinance, 2000, Insu rance Rules, 2002, and SEC (Insurance) Rules, 
2002).  But, there remains some confusion between  its respective regulatory responsibilities and those 
of the Ministry of Commerce; they both issue rules and SECP cannot revoke licenses without 
consulting the Ministry.  
Please explain the responsibilities of SECP and the Ministry of Commerce in the regulation of 
insurance.  Why must SECP consult the Ministry before revoking licenses? 
Page 103, Paragraph 81 :  Foreign life and non-life insurance firms must be locally incorporated 
(after promulgation of the Ordinance any new branches are prohibited); fully foreign-owned firms are permitted following removal of the 51% foreign eq uity cap in September 2006.  Foreign companies 
must bring in minimum foreign exchange of US$4 million in equity towards minimum capital 
requirements; the balance may be raised locally.  Residents are generally prohibited from insuring 
with overseas companies (Insurance Rules, August 2002). 
Please explain the situation in which the minimu m capital requirements may be raised locally.  
SINGAPORE
 
1. Para. 8 (WT/TPR/G/193): "In order to further liberalize Pakistan's foreign direct investment 
(FDI) regime, minimum FDI levels in social, agricu lture and infrastructure sectors have been reduced 
from US$0.5 million to US$0.3 million and in services, such as retailing and wholesaling, from WT/TPR/M/193/Add.1 
Page 34  
 
 US$0.3 million to US$0.15 million.  The maximum lim it of foreign equity of 51% in life insurance 
was removed in September 2006. The number of c ountries with which Pakistan has signed bilateral 
investment treaties has increased from 18 to 48." 
What are the minimum FDI requirements in the ot her sectors? Also, are there plans to liberalise 
foreign equity limits for all the various sectors? 
2. Para. 48 (WT/TPR/G/193): "The foreign exchange  regime has been further liberalized.  The 
Pakistani corporate sector has been allowed to acquire  equity abroad. Foreign registered investors can 
bring in and take back their capital, profits, di vidends, remittances, royalties, etc. free from any 
restriction..." 
Is the acquisition of equity by the Pakistani co rporate sector allowed with no restrictions, no 
deposit/registration or approval procedures? What about the acquisition of real estate? 
What is the definition of foreign registered investor s? If the company is incorporated in Pakistan, but 
sets up a branch in another country, will there be an y restrictions or specific processes before the 
Pakistani company can transfer funds to its branch office?  
INDIA
 
Delay in grant of MFN status to India by Pakistan  
India and Pakistan have no formal trade agreement. While India has a ccorded MFN status to Pakistan, 
Pakistan maintains a list of importable items from India called Positive List which presently consists 
of 1802 items. Thus, Pakistan has denied MFN status to India. Would Pakistan spell out the reasons 
for this discriminatory treatment?  
ISRAEL  
Israel thanks the comprehensive statement from the delegation of Pakistan. 
Israel notes Pakistan's liberalization efforts and the progress made since its last review, as detailed in 
the Secretariat Report. 
Israel remains deeply concerned with several po licy instruments which, according to the secretariat 
report, seem to be incompatible with Pakistan 's commitments in the framework of its WTO 
membership. 
In particular: the secretariat report states in paragr aph 14 of page 24 that Pakistan does not accord 
MFN treatment to Israel. The report further says, in pa ragraph 4 of page 36 that all imports from Israel 
are banned. This import ban is further reflected in  paragraph 43 of page 50 of the report. Other 
measures concerning prohibition of Foreign Direct Investment from Israel in Pakistan are also 
mentioned in the report. 
In this context, Israel would like to raise the following questions: 
1. Could Pakistan please explain how these measures are in conformity with its WTO 
commitments in respect to non- discrimination? 
2. Is Pakistan ready to withdraw these measures and to indicate its intentions for the withdrawal 
of the prohibition of trade with Israel? 
Israel recalls that further to its own review in Febr uary 2006, all of its policy instruments vis-à-vis all 
WTO members were aligned as to abide by its WTO obligations. In this context we reiterate our concern with the measures imposed by Pakistan and we look forward to receive Pakistan's answers. WT/TPR/M/193/Add.1 
 Page 35 
 
 
 REPLIES PROVIDED BY PAKISTAN  
 EUROPEAN COMMUNITIES
 
 
I. ECONOMIC ENVIRONMENT  
(4) M AIN STRUCTURAL POLICY DEVELOPMENTS  
(iii) Governance  WTO Secretariat's Report, page 10/11, Para. 27&28 & page 19, Para. 3 
 We take note of the number of important measures Pakistan has put in place since the last Review to 
improve governance and enhance transparency. Despite  these improvements, the report notes that the 
business climate seems to "remain somewhat unfriendly" to private economic activity. In a similar vein, the Secretariat's Report (page 19, Para. 3) not es that "foreign investment would be facilitated by 
[…] on-going reductions in corruption".  
 
1. Could Pakistan elaborate what additional st eps it intends to undertake so as to improve 
governance and enhance transparency further?  
 
Pakistan has been implementing wide-ranging structur al reforms in almost every sector of the 
economy to improve supply-side response. We are removing impediments to private sector 
development, removing irritants to improve investment  climate and improving allocation of resources.  
Thus reforms have been implemented in the follo wing areas: financial sector; capital markets; tax 
and tarif;, tax administration; fiscal transpa rency; privatization programme; governance, 
particularly with respect to devolution and capacity  building; and agricultu re, particularly with 
respect to agriculture pricing, movement of co mmodities and introducing private sector in wheat 
operations  The passing of Fiscal Responsibility and Debt Limitation Act 2005 has also been a very 
important step in this reform process.  In order to improve the business climate in Pakist an, Government of Pakistan is giving due attention 
to the strengthening of institutions, improving co mpetitiveness of our industry, building a robust 
financial system, further strengthening of tax admin istration, promoting transparency in economic 
policy-making, further reforms in capital market and strengthening the country’s physical and human 
infrastructure.  Some specific examples of such reforms are given below: 
 1. Access to justice programme  
2. The civil service reforms 
3. Conversion of the ‘Central Directorate of Na tional Savings’ into a corporate body.  
4. Promulgation of Competition Ordinance 2007   
5. ISO 9001 Certification for government Ministries 
6. Productivity enhancement measures (HRD  & Infrastructure Development)  
7. Establishment of Economic Reform Unit in the Ministry of Finance  
8. Establishment of Competitiveness Support Fund  
9. Setting up of Infrastructure Project Devel opment Facility to promote public-private 
partnerships in infrastructure development. 
10. Deepening and continuation of Banking and Financial Sector Reforms   
11. Deepening of Tax Administration Reform  
 2. In this context, could Pakistan please elaborat e on its specific plans to further reduce levels of 
corruption?  
 
Anti Corruption is a continuous process.  This is an integral component of public sector management 
in Pakistan as manifested clearl y in the Government’s resolve to cu rb corruption. Several on-going WT/TPR/M/193/Add.1 
Page 36  
 
 and new initiatives are mentioned in this regard.  One, implementation of the National Anti 
Corruption Strategy (NACS) remains an on goi ng process involving all stakeholders across the 
different sectors of the socio-economic polity of Paki stan. This strategy has three key elements of 
awareness, prevention, and investigation and pro secution. Moreover, a continuous review of the 
implementation status of NACS recommenda tions is undertaken on a regular basis. 
 
Two, given the transnational nature of white collar crimes and realizing the importance of a 
concerted international effort aimed at comba ting corruption, Pakistan ratified the United Nations 
Convention Against Corruption (UNCAC) in August 2007. The instrument of ratification has already 
been conveyed to the UN Secretar y General’s office. A dedicated Cell at the headquarters of the 
National Accountability Bureau has also been crea ted to co-ordinate & oversees effective 
implementation of the Convention.  Three, realizing that Anti-Corruption effort is ofte n greatly hampered by the laundering of proceeds 
of corruption and its accompanying flight from one jurisdiction to another, Government of Pakistan 
has in September 2007 promulgated the Anti Money Laundering Ordinance (AMLO). Among other 
things, a Financial Monitoring Unit (FMU) has also been established in the State Bank of Pakistan under the AMLO for handling suspicious transactions.  
 
(6) D
EVELOPMENTS IN MERCHANDISE TRADE  
(i) Merchandise trade  
(a) Composition of trade  
 WTO Secretariat's Report, page 13, para. 36 
 
According to the WTO Secretariat's Report, "little export diversification has occurred since the last 
Review of Pakistan. Exports remain highly concentrated".  
 3. Could Pakistan elaborate on its plans to pursu e further diversification, in particular with 
regard to the textiles and clothing sector?  
 
Diversification policy is based on the identificati on of competitive advantage and focusing on high 
value addition to the locally produced raw-materials and imported inputs. The focus is on improving 
competitiveness by continuously modernizing and  upgrading the manufactu ring infrastructure and 
through human resource development. The policy is implemented through priv ate-public partnerships 
and encouraging entrepreneurs to diversify into new sectors. The following sectors, in particular have 
been identified for diversification e fforts: cement, pharmaceuticals,  processed agricultural and food 
products including ethanol, gems and jewelry, s ports goods, marble and granite, furniture, motor 
cycle and auto parts, electrical capital goods, elect ronics and electrical homeappliances, processed 
petroleum products, and telecommunication.  
 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES  
(4) T
RADE AGREEMENTS AND ARRANGEMENTS  
(ii) Regional and other preferential arrangements  
 WTO Secretariat's Report, page 26, para. 19 & page 27, para. 22 
 
It is indicated that Pakistan would gain considerab ly from unilateral trade liberalisation. At the same 
time, the Secretariat's report states that Pakistan's  sensitive list of goods, to be exempted from tariff 
cuts under SAFTA, has the highest share of items among non-LDC members.   WT/TPR/M/193/Add.1 
 Page 37 
 
 
 4. Could Pakistan indicate whether it considers un ilateral liberalisation as a first step to further 
benefit from regional integration? If so, would Pa kistan consider opening its markets further 
vis-à-vis its direct neighbours? 
 
The policy of trade liberalization is three pronged;  unilateral, regional (including bilateral) and 
multilateral. While these policies complement ea ch other, these also have overlapping impact. 
Pakistan’s unilateral liberalization does have beneficial impact on regional integration and that equally applies to trade with direct neighbours.  Trade liberalization is a comprehensi ve exercise including reduction or elimination of both tariff and 
non tariff barriers. Pakistan through substantive re ductions in the negative list, abolition of quotas, 
scaling down of tariffs and by not resorting to non-tariff barriers, has reached a stage of liberalization far ahead of its direct neighbours. Acco rdingly, the overall trade regime of Pakistan is 
considered by the World Bank as the most  transparent and liberal in South Asia.   
 5. Does Pakistan consider reducing its list of sensitive goods, which are exempt from tariff cuts 
under SAFTA? 
 
First, it should be noted that in terms of volume  of imports the tariff lines in the sensitive list 
constitute an insignificant share of the total imports  of Pakistan from SAFTA region. Secondly, as per 
the provisions of the Agreement, the Sensitive Li sts of SAFTA members are to be reviewed after every 
four years or earlier as may be decided by SAFTA Ministerial Council (SMC). Pakistan will consider 
reducing its sensitive list as per this review provision. 
 
(b) Regional and plurilateral arrangements  
 
WTO Secretariat's Report, page 27, para. 22  
6. Has Pakistan notified the South Asia Free Trade Agreement (SAFTA) to the WTO? If not, 
when does Pakistan intend to do so? 
 
The SAARC Secretariat has been mandated by th e Member States to notify the SAFTA Agreement to 
the WTO. The draft circulated by the SAARC Secret ariat has already been approved by Pakistan. The 
notification would be submitted to the WTO as soon as  it is cleared by the other members as well. 
 
7. Could Pakistan indicate the scope and liber alization commitments under this Agreement?  
 The SAFTA Agreement came into fo rce on January 01, 2006. The first tariff reduction was notified on 
July 01, 2006. SAFTA envisages reduction of tariff in two phases: 
Phase-I  (2006-2008)
 
 i. The tariff reduction by the Non-Least Developed St ates from existing tariff rates to 20% to be 
done within a time frame of 2 years, from the dat e of coming into force of the Agreement.  The 
tariff rates below 20% are to be reduced on a Margin of Preference basis of 10% on actual 
tariff rates for each of the two years.  
ii. The tariff reduction by the Leas t Developed States from existing tariff rates will be to 30% 
within the time frame of 2 years from the dat e of coming into force of the Agreement. The 
rates below 30% will be reduced on Margin of Preference basis of 5 %. 
 WT/TPR/M/193/Add.1 
Page 38  
 
 Phase-II  (2008-2016)
 
 i. The subsequent tariff reduction by Non-Least Developed States from 20% or below to 0-5% 
shall be done within a second time frame of 5 years beginning from the third year from the 
date of coming into force of the Agreement. However, the period of subsequent tariff 
reduction by Sri Lanka is to be six years.  
ii. The subsequent tariff reduction by the Least Devel oped States from 30% or below to 0-5% to 
be done within a second time frame of 8 years be ginning from the third year from the date of 
coming into force of the Agreement 
 
SAFTA also envisages trade facilitation measures by eliminating non-tariff barriers (NTBs), by 
harmonizing standards and SPS measures, and by including trade facilitation. 
 
For further details please visit our  web site (www.commerce.gov.pk) 
 
(c) Bilateral arrangements  
 
WTO Secretariat's Report, page 29-31, para. 27-32 
 
According to the WTO Secretariat's Report, Pakistan 's recent bilateral agr eements have not been 
notified or announced to the WTO.   
8. When does Pakistan intend to notify the Pakistan-Sri Lanka FTA, Pakistan-China FTA, 
Pakistan-Malaysia PTA, Pakistan-Iran PTA and the Pakistan-Mauritius PTA?  
 
Pakistan is already in consultation with th e FTA partners for notifying these agreements to the 
respective bodies of WTO. 
 
9. Could Pakistan indicate for each of the a bovementioned RTAs how much trade is covered 
and how far liberalization commitments go?  
 
Pakistan Iran PTA and Pakistan Mauritius PTA have a limited scope. On the other hand, Pakistan - 
Sri Lanka FTA, Pakistan - China FTA and Pakist an - Malaysia FTA are co mprehensive Agreements 
covering substantially all trade in due course – to be implemented in a phased programme.  
 Pakistan – Sri Lanka FTA 
 
 Pakistan – Sri Lanka FTA came into force in June  2005. For trade in goods, the Agreement contains 
three categories of lists of products: 
 
i. Immediate concession list –  el imination of tariff immediatel y after entry into force of 
the Agreement 
ii. A no concession list –  where MFN tariff will be maintained 
iii. On the remaining tariff lines  –  elimination of tariff in linear mode in three years for 
Pakistan and five years for Sri Lanka 
 
The immediate concession list of Pakistan comprises  206 tariff lines and for Sri Lanka 102 tariff lines 
at 6 digit HS. The No Concession list comprises 510 and 697 tariff lines at 6 digit HS for Pakistan 
and Sri Lanka respectively. Both the countries have al so provided market access to each other on a 
few products on TRQ basis. The first review of th e Agreement has already been held in which 
Pakistan has further deepened the concessions for Sri Lanka on some produc ts. The scope of the 
Agreement is being enlarged by including Services, Investment & Trade facilitation.   WT/TPR/M/193/Add.1 
 Page 39 
 
 
 Pakistan - China FTA  
 Pakistan – China FTA came into force on July 01 , 2007. For trade in go ods, both countries shall 
reduce/eliminate tariffs in a phased manner. Th e first phase is from 2007 to 2011 in which the 
following modalities have been agreed by both countries: 
 
i. Elimination of tariffs in th ree years (35% Tariff Lines) 
ii. Reduction of tariff to 0-5% (20% Tariff Lines) 
iii. Reduction of tariff on margin of pr eference basis (30% Tariff Lines) 
iv. No concession list & Exclusion List  (15% of the tariff lines) 
 
Pakistan – Malaysia FTA  
 Pakistan – Malaysia FTA came into force on January 01,  2008. It is Pakistan`s first comprehensive 
FTA covering Trade in Goods, Trade in Services,  Investment & Economic Co-operation. The 
Agreement envisages elimination/reduction of tariffs  in phases. The tariff li beralization committed in 
the first phase (2008-2012) is given below:  
i. Tariff Elimination (43.2% of tariff lines) 
ii. Tariff Reduction (43.4%) 
iii. No Concession & Exclusion list (13.4% of tariff lines) 
 
The first review of the Agreement will be in 2009 in which both countries may consider further 
elimination/reduction of tariffs. Thereafter the Agreement will be reviewed every five years.. 
 
10. Could Pakistan inform about the latest state of play of negotiations in trade in services with 
China?  
 
The negotiations with China for incorporating Tr ade in Services are on-going. So far three rounds of 
negotiations have been held in which both countri es are considering market a ccess to each other in 
various sectors/sub sectors, including education, health, financial services and mode 4. 
 
11. Could Pakistan confirm that the Pakistan -Malaysia PTA has indeed come into force on 
1 January 2008? 
 
Yes, the FTA has been implemented from January 01, 2008. 
 12. Does Pakistan consider that a growing number of shallow RTAs would contribute to reap the 
benefits regional inte gration offers?   
 
Pakistan is aware that deeper economic integratio n through more trade in services, freer flow of 
investments, reduction in non tariff and technica l barriers to trade, harmonization and mutual 
recognition of standards and coordination of macro- economic policies would bring still greater 
benefits. But each country determines the level of in tegration with a view to maximize the welfare 
gains and minimize the risks to its economic and so cial structure and avoid threats to its human 
development efforts at home. All the RTAs, which Pa kistan has signed, have provisions for deeper 
tariff cuts and for expanding the scope of economic c ooperation in future. As selective, deeper trade 
liberalization and economic integrati on through RTAs has to be a reciprocal process, Pakistan is 
engaged with its partners to realize the full potential of regional integration efforts to the mutual 
benefits of all the partners. 
 WT/TPR/M/193/Add.1 
Page 40  
 
 13. Does Pakistan share the views that pursuing comprehensive and high-quality RTAs would 
lead to enhance genuine trade liberalization in the region? 
 
Pakistan believes that an RTA qualifies as being a high quality RTA if the enhan ced trade contributes 
to sustained economic growth of the partner c ountries. The multifarious spillovers of a high quality 
RTA are transmitted through technology  transfer, allocative efficiencies, linking of supply chains, 
reduction in the cost of doing business, by removi ng NTBs and behind the border barriers, in addition 
to tariff reduction. The government of Pakistan is aware of the need to rea lize the full potential of 
RTAs and is providing effective in stitutional support to the inte gration process and expects its 
partners to reciprocate. 
 
14. Does Pakistan agree with the assumption that  fully-fledged and comprehensive FTAs are a 
preferable option in terms of economic gains a nd trade liberalisation benefits rather than 
limited shallow preferential trade agreements?  
 Pakistan is pursuing comprehensive FTAs in whic h it is committed to ultimately eliminate/reduce 
tariff on substantially all trade and providing market access in services with an objective of mutual 
benefits to all partner countries.  
 
WTO Secretariat's Report, page 30/31, para. 32 
 According to the WTO Secretariat's Report, "no fu rther details on the PTA were available, including 
from the authorities".   15. Could Pakistan please further describe the sc ope and coverage of the Pakistan Mauritius 
bilateral trade agreement?  
 
Pakistan – Mauritius PTA has been operational since 30
th November 2007. Pakistan has agreed to 
allow 35% to 50% reduction on Margin of Preferen ce (MOP) at the end of year from the date of 
operation and 100% MOP in the next year a nd a Tariff Rate Quota (TRQ) of 200,000 to 
300,000 pieces to textile exports fr om Mauritius. Mauritius has agreed to reduce duty on 50% Margin 
of Preference (MOP) on goods exported from Pakist an at the end of year from date of operation to 
100% MOP in the next year. 
 The basic criteria for Rules of Origin for Pakist an-Mauritius PTA are as under: origin requirement is 
35% of the total FOB value of a product and value addition shall not be less than 25% of the FOB value. 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) I
NTRODUCTION  
 WTO Secretariat's Report, page 36, para. 2 
 
The EC acknowledges efforts undertaken by Pakistan  with a view to reduc ing the occurrence of 
smuggling. However, we noted that the Secretar iat’s report indicates that "significant smuggling 
remains, albeit reduced, partly due to  trade restrictions with India".  
 16. Could Pakistan indicate which particular m easures it is currently carrying out and which ones 
it is planning to undertake so as to counter such smuggling activities?  
 
Pakistan has addressed this issue through a two-pronge d strategy of policy interventions and effective 
enforcement. At the policy level, rationalization of  tariffs and simplification of import procedures  WT/TPR/M/193/Add.1 
 Page 41 
 
 
 have been the corner stones of trade policies; and at implementation level, improved intelligence and 
effective crackdown of smugglers have helped enhance enforcement efforts. 
 With gradual liberalisation of trade with Indi a and reduction of tariffs under SAFTA, cross-border 
smuggling has been substantially reduced. Moreover,  the fencing of the whole border has also 
blocked land routes for smuggling.   
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs  (a) Policy and general features  
 
WTO Secretariat's Report, page 39, para. 14 
 
According to the WTO's Secretariat's Report, "un ilateral  'top down' tariff reform programmes ended 
in 2002/03; since then 'piecemeal' re forms have mainly prevailed […]".  
 
17. Why did unilateral tariff reduction programmes cease in 2002/03?   
Tariff reforms and tariff rationaliza tion is a constant and on going process. Even in the budget 2007-
08 the tariffs on a number of items have been br ought down and a rate of 0% has also been 
introduced in the tariff schedule, besides tariffica tion of many items chargeable to 0 % in SROs. 
 
(c) MFN tariff bindings 
 
WTO Secretariat's Report, page 42, para. 21 & page 49, para. 37 
 The Secretariat's Report informs that peak ad va lorem rates have dropped in recent years from 250% 
to 90% and these are concentrated on a few sensitive  items including on motor vehicles. With the 
merger of the capital value tax on imported motor ve hicles in June 2007, tariffs on cars with engines 
above 800 cc were raised by either 5, 10 or 15 pe rcentage points depending on their engine capacity. 
In addition, it is indicated that ta riffs for motor vehicles are also unbound. 
 
18. Could Pakistan confirm whethe r it intends to reduce tariffs on motor vehicles at least to the 
level before June 2007 or even below? 
 
The tariffs on motor vehicles have been reduced by Pakistan since its  last TPR. The year wise tariffs 
on imported vehicles have been announced for the n ext five years, up to June 2012, to provide 
predictability and stability. 
19. In addition, is Pakistan planning to bind its tariffs on imported motor vehicles? 
 
The policy for binding the unbound industrial tariffs (currently less than 1% of tariff lines) is under 
active consideration, especially in the context of ongoing Doha Round Negotiations 
 
(iii) Customs valuation, minimum import prices and Preshipment inspection  WTO Secretariat's Report, page 48, para. 33  
The Secretariat report states that the "transaction value reportedly applies to only some 90-95% of 
imports and is used unevenly on  food and consumer goods".  
 20. Could Pakistan report on the difficulties encounter ed in applying the transaction value in such 
a relevant percentage of imports?  WT/TPR/M/193/Add.1 
Page 42  
 
 The difficulty of accepting transactional values is generally confined to cases such as second hand 
vehicles or when imports are made from dubious so urces or where certain goods are subject to high 
tariffs where more thorough valuation checks have to be made. Pakistan is trying to augment its 
efforts for application of transaction value by st reamlining the risk management and establishment of 
Post Clearance Audit and capacity building of staff. 
 
21. Could Pakistan describe on what basis customs authorities determine under-invoicing? 
 
When imported goods reflect lower prices for identic al goods imported in the same quantity from the 
same source there is an indication of under-invoicing.   Another indication is when the invoice price of 
a finished good is far less than the raw materials used in it.  Yet another infication would be when the 
goods are repacked in transit to Pakistan and their concentration or specification is mis-declared 
with a view to justify low prices.  Generally these indications form the basis for the doubts for under-
invoicing. 
 22. Do Pakistan's Customs communicate to the importer the grounds for considering that the 
transaction value is inapplicable? Does Pakistani Cu stoms give importers a chance to respond and to 
show Pakistani Customs that the transaction value listed on the invoice should be accepted as transaction value? What type of information can  the importer provide to address these concerns? 
 
Pakistan Customs communicates to the importers the grounds for considering  a transaction value 
inapplicable. The importers are then given a chance to respond to Customs and can provide 
documents to substantiate the accuracy of the d eclared values such as a purchase agreement with 
their principals, their indents, proofs of bank tr ansactions and even instances of similar goods cleared 
at the declared transaction value. Any objection ra ised by the assessing officer is reviewed by the 
supervisory officer on the basis of th e response presented by the importer. 
 
WTO Secretariat's Report, page 48, para. 34 
 
23. Could Pakistan explain the re asons of applying special customs valuation procedures to motor 
vehicles?  
 
The special valuation method is only used for valuation of used/second hand vehicles by considering 
the transaction value duly authenticat ed by the principal agents of manufacturers in the country.  The 
invoices issued by the manufactu rer like Mercedes, Toyota, Mitsubi shi are accepted as such for 
calculation of custom duties.  Therefore, the so called special customs valuation procedure for 
assessing customs duty on imported motor vehicles is in fact in line with the transaction value 
procedure. Pakistan understands that a similar pr actice is adopted in many other WTO Member 
states.  
 (iv) Other levies, charges and taxes (a) Domestic taxes   
WTO Secretariat's Report, page 48, para. 36  
The Secretariat's report states that "while, with some important exceptions, domestic taxes […] apply at the same rate on domestic a nd imported products and may not generally discriminate against 
imports, any assessment is made difficult by their no n-transparency and complexity, including in how 
they are administered differently on imports." 
 24. Could Pakistan provide information on wher e exporters to Pakistan can find information 
about the taxes applied to each product cate gory and how these taxes are administered? 
  WT/TPR/M/193/Add.1 
 Page 43 
 
 
 All duties and taxes applied on imports into Pakistan are published in the official gazette. Customs 
administration prints compilation of all such  levies annually. Moreover all these levies are 
electronically available on FBR website www.fbr.gov.p k. Any interested person can find leviable duty 
in the Pakistan customs computerized system (P aCCS) under TARIP at www.paccs.gov.pk which is 
updated on a real time basis. All taxes at import st age are administered by the Customs.   
 
(v) Import prohibitions, quotas, restrictions, and licensing  
(a) Prohibitions  WTO Secretariat's Report, page 50, para. 42 
 
Page 11 of the Report by Pakistan informs that sinc e the last review, Pakistan's ban on imported iron 
and steel waste and scrap had been removed. However,  the Secretariat's report refers to this ban as 
only being "relaxed".  
25. Could Pakistan confirm whether this import ban has been actually abolished?  
 
It is confirmed that a ban on import of iron and st eel waste and scrap has been abolished.  Currently 
there is no ban on imports of these items.  
26. In addition, could Pakistan describe the current  regime for the import of iron and steel waste 
and scrap? 
 
As replied in the reply for question 25, the waste and scrap of iron and steel including re-
rollable scrap is freely importable.  
 
WTO Secretariat's Report, page xii, para. 21 
 
The Secretariat's Report states that the commercial imports of used vehicles are prohibited to promote 
the domestic industry. 
27. Could Pakistan confirm that the commercial im port of used vehicles is indeed prohibited? If 
so, could Pakistan explain the rationale for this  measure and indicate whether it is planning to 
enact the necessary legal measures to cease this import ban? 
 
Yes, it is confirmed that commercial imports of used vehicles is not permissible under the current 
import policy. However such vehicles are importe d against transfer of residence scheme, personal 
baggage scheme or gift scheme under Baggage Rules, provided these vehicles are not older than 
three years. This measure has been taken by the GOP to ensure that substandard vehicles are not 
imported in the country. The policy is periodically reviewed. 
 
(b) Restrictions and licensing  
 
WTO Secretariat's Report, page 51, para. 45 
 
According to the WTO Secretariat's Report, certain imports are restricted for health, safety, security, 
and environmental reasons. However, "this does not al ways seem to be the case    e.g. for motor 
vehicles and the oil and gas sector".   28. Could Pakistan elaborate further on the rati onale for restricting imports of these products? 
 WT/TPR/M/193/Add.1 
Page 44  
 
 To the extent of motor vehicles the restriction only applies to commercial imports of second hand 
vehicles or to Completely Knocked Down (CKDs) ki ts of motor vehicles which are only importable by 
registered manufacturers of motor veh icles. However there is no restriction applicable to the oil and 
gas sectors. We would appreciate it if the EC can pr ovide specific reference to any legal instrument 
enabling Pakistan to respond. 
 
WTO Secretariat's Report, page 51, para. 47 
 
According to the WTO Secretariat's Report, Pakistan is no longer operating an import licensing system.  
 
29. Could Pakistan confirm that no product is s ubject to import licensing procedures?  If so, is 
Pakistan considering re-introducing the system in the future?  
 
The system of issuance of import licensing has b een dispensed with sin ce 1993. However there are 
certain categories of products which are subject   to quantitative restrictions like Ozone Depleting 
Substances (as per Montreal Protocol) and Precursor Chemicals. Currently re introduction of import 
licensing procedures is not under consideration. 
 
(vii) Government procurement  
 
WTO Secretariat's Report, page 52, para. 52  
30. In light of the recent reforms of 2004 and of  the fact that Pakistan’s current government 
procurement framework is based upon interna tional best practice, does Pakistan envisage 
becoming an observer to the Plurilateral WTO Agreement on Government Procurement? If 
not, could Pakistan elaborate on the reasons for not taking such decision? 
 
It is pointed out that the current reforms in the field of government procurement, reflected through 
Public Procurement Rules, 2004, are based on inter national best practices. The issue of Pakistan 
becoming observer to the plurilateral WTO Agreeme nt on Government Procurement requires careful 
consideration as there are concern s that the WTO GPA Agreement is overly regulatory and does not 
produce efficient outcomes.  While noting that there is no requirement for any developing country 
WTO Member to join any plurila teral agreement, Pakistan will review  the question of it becoming an 
observer to the WTO GPA Agreement, keeping in view the potential costs and benefits of doing so. 
 WTO Secretariat's Report, page 53, para. 53 
 
31. How do Pakistan's authorities interpret "no a dvantage is envisaged from competitive bidding" 
in order to allow for direct tendering? Are there any thresholds applied? 
 
Public Procurement Rules, 2004 envisage competitiv e bidding as principal method of procurement as 
per Rule-20. Direct contracting and negotiated te ndering are alternative methods of procurement 
under Rule-42 of the PPRA Rules- 2004, which are permissible as exceptions under special conditions 
e.g. procurement of intellectual property items, pr ocurement of spare parts and allied facilities from 
original manufacturers, and procurem ent in emergency situations etc. 
 
WTO Secretariat's Report, page 53, para. 54 
 
32. Which nationalities are prohibited by govern ment policy? Does Pakistan envisage reducing 
 price preferences at some time?   WT/TPR/M/193/Add.1 
 Page 45 
 
 
 Public Procurement Rules, 2004 do not allow any di scrimination on the basis of nationality except in 
cases where any procuring agency decides to limit such participation to national bidders only or 
prohibits participation of bidders of some nationalit ies in accordance with th e policy of the Federal 
Government. Public Procurement Rules, 2004 provid e for price preference  in accordance with 
Federal Government Policy. While reduction in pri ce preferences is not envisaged for now, this may 
be reviewed in future.  
WTO Secretariat's Report, page 53, para. 56 
 
33. When do Pakistan's authorities plan to provide updated figures of total government 
procurement market for goods and services and i ndication of the share of federal procurement 
covered by the Public Procurement Regulatory Authority (PPRA)? 
 
By mid 2008, Pakistan is planning to collect the requisite figures of total government procurement; 
however, share of the federal procurement covered by  the Public Procurement Regulatory Authority 
(PPRA) is estimated to range between 10-15 per cent of Pakistan's GDP.  The exact figures are not 
readily available. 
 
WTO Secretariat's Report, page 54, para. 60 
 According to the report, a number of institutional a nd legislative changes in Pakistan's trade remedy 
regime have taken place just in advance and since the last review.   34. Could Pakistan elaborate on whether it considers these chang es to meet the desired intent? 
Are further changes currently under wa y or foreseen in the near future? 
 
No legislative changes have been made in Pakistan ’s trade remedy laws since last review. Pakistan 
has followed a trade remedy regime that is consis tent with WTO trade remedy agreements, and any 
future changes in this regime will be in conf ormity with the relevant WTO agreements.  
(3) M
EASURES DIRECTLY AFFECTING EXPORTS   
(ii) Exports duties and taxes 
 WTO Secretariat's Report, page 59, para. 77  
It is stated that "Export taxes are prohibited ( section 18(2), Customs Act). However, the CBR can 
impose "regulatory duties" of up to 100% on exports , by notification without parliamentary approval 
(section 18(3))." 
 35. Could Pakistan explain what  exactly "regulatory duties" me an and whether these duties are 
 published?  
It is further stated that "Duties of 25% were applied to exported ferrous  and non-ferrous waste and 
scrap in June 2006 […] due to domestic shortages; "r egulatory" duties also apply […] at 20% on hides 
and skins […]"  
Regulatory duty is indeed ‘additional customs duty, imposed by the Federal Government under 
section 18(3) of the Customs Act, 1969 under certain peculiar and compelling circumstances 
prevailing at a specific time. These duties are time bound and are rescinded automatically at the end 
of financial year if not already withdrawn. Presen tly, only two items (wheat flour and non ferrous 
waste) are chargeable to regulatory duty on exports. Any decision to levy regulatory duty is immediately published on the website of FBR. WT/TPR/M/193/Add.1 
Page 46  
 
 36. Could Pakistan clarify if the 25 % export duties on non-ferrous waste and scrap  are still in 
place? 
 
It is clarified that 25% regulatory duty on exports  is effective on export of non-ferrous waste and 
scrap to ensure the availability of  essential raw materials of non-ferrous nature in the country. 
 
37. Could Pakistan describe on what gro unds can regulatory duties be applied?  
 
The Regulatory duty is levied to  ensure domestic market stability. 
 38. What is the difference between "regulatory duties" and "export taxes"? 
 
The regulatory duty is not an export tax. It is a polic y instrument resorted to in rare cases to stabilize 
the domestic market. Any regulatory duty in Pakist an is levied under extraordinary circumstances for 
a limited period of time. All regulatory duties levi ed stand rescinded at the expiry of the financial year 
in which these are imposed.   
(iv) Export subsidies  
 
WTO Secretariat's Report, page 60, para. 85 
 According to the WTO Secretariat's Report, Paki stan has in place numerous assistance schemes which 
add complexity to Pakistan's trade regime. Accord ing to the report, Pakistan has not notified any 
export assistance to the WTO since its last Review.   39. Could Pakistan indicate if it has enacted ne w export assistance schemes since its last Trade 
Policy Review?  
 
Pakistan has phased out most assistance schemes. It s duty draw-back system for making exports zero-
rated has been made more transparent to refund only the actual duty paid on imported components. 
The only new scheme is "Research and Development". Scope of this scheme is very limited. The 
details of this scheme are publicly available in  SRO 437(I)/2005 which was issued on the 18th of 
May 2005.  
40. When does Pakistan intend notifying such programs to the WTO?   
Pakistan is of the view that developing members wi th per capita income of less than $1000 are not 
obliged to notify such schemes to the WTO.  However, it is reviewi ng this scheme with a respect to 
continuation or otherwise of this scheme.  (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation   
WTO Secretariat's Report, page 68, para. 105 
 
The Secretariat's report states that "many indirect taxes remain unduly complex and lack transparency 
due to different tax bases across products and specified  minimum levels; a multiplicity of taxes, often 
narrowly based due to numerous concessions/excepti ons; administrative inefficiency with corrupt 
elements' cumbersome assessment procedures' and endemic tax evasion due to the large informal 
economy".    WT/TPR/M/193/Add.1 
 Page 47 
 
 
 41. Could Pakistan elaborate on the planned measures envisaged to continue pursuing the 
necessary tax reforms so as to enhance transpar ency, simplicity and predictability of its tax 
system? 
 
Federal Board of Revenue (FBR) under the Tax Ad ministration Reform Project (TARP) has designed 
a strategy to promote greater transparency, si mplicity and predictability in the taxation system. 
Various measures implemented in last few years and which will continue in the future include: 
 1. Universal Self Assessment  
2. Automation of customs declaration, assessmen t and clearance process. The system introduced 
at PACCS will be rolled out to all the custom stations in next 2 years. 
3. Electronic filing of Sales Tax (ST) & Income Tax (IT) return.  
4. Advance Ruling in Corporate Income Tax. 
5. Availability of all major tax laws , rates and notifications on FBR’s website. 
 42. How does Pakistan plan to reduce tax ev asion and increase the number of taxpayers?  
 
FBR envisages a major reduction in tax evasion  through the implementation of an audit and 
enforcement procedure in sales tax,  income tax and post clearance audit in customs. Strengthening of 
automation will ensure better access to taxpayer information through an integrated database. 
Enhanced taxpayer facilitation will also help improve voluntary compliance and broaden the tax 
base.  
43. Is Pakistan already undertaking any me asures so as to make tax procedures less 
administratively complex? 
 Yes, re-engineering of manual process in all the taxes a re believed to be steps in the direction to make 
procedures administratively less complex. Moreover, moving from an assessment based system to  a self assessment based system is helping in 
achieving this goal. 
 
WTO Secretariat's Report, page 68, para. 108 
 
We note that General Sales Tax (G ST) is generally levied at the same rate on impor ted and domestic 
goods. However, some exemptions still di scriminate directly against imports. 
 44. What are Pakistan's plans to abolish these exemptions? 
 
These exemptions are mainly for unprocessed agricul tural produce; and are planned to be withdrawn 
in the Budget 2008-09. 
 
WTO Secretariat's Report, page 69, para. 109 
 The EC is concerned about the lack of clarity a nd information on the minimum valuation addition. 
The information available does not allow for a fu ll assessment of the measures but this may have 
potentially serious discriminatory effect on imports.  45. Does Pakistan plan to enhance transparency in this regard so as to ensure that minimum 
valuation addition has not a discriminatory impact on imports?  
 
There is no discrimination to imported goods on account of minimum value addition. WT/TPR/M/193/Add.1 
Page 48  
 
 Minimum value addition on some items at the impo rt stage was introduced on the demands of the 
importers to facilitate them and reduce their burden of  record keeping & audits. This value addition is 
in lieu of subsequent supplies made by commercial importers which are exempt from sales tax.  
 
(v) Intellectual property rights (IPR) 
 
WTO Secretariat's Report, page 77, para. 134 
 
We very much appreciate the decisive steps undert aken by Pakistan to strengthen its intellectual 
property protection, in pa rticular enforcement. However, accord ing to the WTO Secretariat's Report, 
Pakistan participates in only two of the 24 treaties of the World Intellectual Property Organization. In 
the meantime, "Vision 2030, adopted in May 2005, aims  to turn Pakistan into a developed country by 
2030 through rapid and sustainabl e development by, inter alia, deploying knowledge-intensive import 
items " (Summary observations, page x, para. 10). 
 
46. Could Pakistan please explain how it plans to strengthen the protection of intellectual 
property rights so that its economy can be benefited from receiving more knowledge-intensive imports?  
 
In order to strengthen the IP protection, several measures have been taken.  More important of these 
are:  
 
(i) A single umbrella Organization titled Intellectual Property Organization of Pakistan (IPO-
Pakistan) was established in consultation with WIPO for promotion and protection of IPRs in 
Pakistan. 
(ii) The Federal Investigation Agency (FIA) which is  an elite force of the Federal Government for 
investigation and prosecution of white collar crim es was empowered to interdict piracy. For 
this purpose, necessary legisla tive changes were put in place; 
(iii) Pakistan Customs’ law and administration were made more effective against piracy and 
counterfeiting; 
(iv) An effective public private partnership was in troduced in the governance structure of IPO-
Pakistan; and 
(v) An almost ten fold increase has been made in the funding provided for the upgrading of IP 
infrastructure in Pakistan.  
 
IV. TRADE POLICIES BY SECTOR  
(1) O
VERVIEW  
 
WTO Secretariat's Report, pages 80-110, para. 1-106 
 
We note that under Chapter IV there is no informat ion on the leather sector and the hides and skins 
sector in Pakistan. In the EC’s view, these are relevant sectors in the Pakistan’s economy and 
therefore, including related information would have been of utmost interest. 
 
47. Could Pakistan provide some relevant inform ation regarding the current production and trade 
volumes in those sectors?  
  WT/TPR/M/193/Add.1 
 Page 49 
 
 
 Production data of leather sector 
   Production in % change 
S. No Name of items Unit of quantity October July-October Oct. 07/Oct 06 July-Oct 07-08/ 
July-Oct 06-07 
   2007 2006 2007-08 2006-07 (4)/(5)*100-100 (6)/(7)*100-100 
(1) (2) (3) (4) (5) (6) (7) (8) (9) 
1 Upper leather 000 Sq. meters 1,688 1,602 6,883 6,228 5.37 10.52 
2 Sole leather Tones 10 9 38 42 11.11 -9.52 
3 Footwear 000 pairs 1,857 1,834 8,521 7,667 1.25 11.14 
 
The break up of export of hides and skins and leather products during the year 2005-06 and 2006-07 are as under: 
 (Value in thousands US$) 
Description 2005-06 2006-07 
Other Hide, Skin Wet State  657 244 
Wet Blue Lamb, Sheep Skin  2,441 731 
Goat/Kid Skin Wet Blue 5,856 286 
Other Wet Blue Skins  688 1101 
Whole Hide/Skin Grain Split BV 5,117 7,187.7 
Other Hide Incl. Side Grain Split 597 4,440 
Leather Tanned (Excld. Wet blue and split leather) 271,325.1 295,561 
Leather Gloves- 151,459 132,589 
Leather Apparel & Clothing 501,786 388,115 
Other Leather Manufactures 69,308 33,477 
Raw Hides & Skins - 246 
Leather Footwear 114,689 97,089 
 
(2) A GRICULTURE , LIVESTOCK , FORESTRY , AND FISHERIES   
(i) F EATURES  
 WTO Secretariat's Report, page 81, para. 6 
 
According to the WTO Secretariat's Report, "envi ronmental factors, e.g. rising soil salinity and 
deteriorating groundwater quality, ar e also undermining productivity".  
 
48. Could Pakistan elaborate on how it plans to  improve environmental conditions and, more 
generally, how to make its econom ic growth more sustainable? 
 
To address the problems of soil salinity and bra ckish ground water, Pakistan has taken up the 
following initiatives over the years: 
 - Promoting the use of organic soil amendments  like farm yard manure, commercial acids and 
organic wastes (press mud, composts, etc.); 
- Laser leveling of salt affected land to impro ve water use efficiency as well as ensuring 
uniform soil reclamation; 
- Large scale adoption of saline agricultural technology involving cultivation of appropriate 
vegetation (grasses, shrubs, trees, etc.); 
- Development of salt tolerant cultivars of ma jor agronomic crops (wheat, rice, cotton); 
- Promotion of saline agro-forestry incorporating species of eucalyptus, acacia, ipil ipil, etc.; 
- Establishment of saline aquaculture on salt affected land using brackish ground water; 
- Provision of surface and sub-surface drains to get rid of ponded brackish water; WT/TPR/M/193/Add.1 
Page 50  
 
 - Deep and large capacity tube wells have been  stopped. Small and shallow tube wells are 
being installed by the farmers to skim f resh water from upper layers avoiding underlying 
saline water; 
- The tertiary irrigation system i.e ., watercourses are being improved; 
- A program has been initiated for monito ring and management of groundwater in 
collaboration with farmers.  
- Development and adoption of resource conservation technologies viz: zero tillage, bed 
planting and limited scale use of pressurized i rrigation systems for efficient use of ground 
water; and 
- A project has been launched on sustainable land management to combat desertification in 
Pakistan with the aim of reducing poverty in the rural population. This project would follow 
the integrated cross sectoral and forestry appr oaches to enhance agric ultural productivity 
among rural communites, resulting in economic growth and poverty reduction. 
 
(5) S
ERVICES  
(ii) Communications 
 WTO Secretariat's Report, page 104, para. 84 
 
49. Could Pakistan provide with a brief descrip tion of the satellite market and procedures to 
provide satellite services in the country?   
 
The use of satellite communications in Pakistan has increased several-fold in recent years due to the 
opening up of the telecommunications sector to pr ivate investment through the telecom deregulation 
policy of 2003 and the liberalization of TV broad casting and mobile sector in 2004. The use of 
satellites in Pakistan will increase further due to the opening of the Direct to Home (DTH) business 
segment. Based on a market study conducted in 20 04-05 by M/s Detecon for the National Satellite 
Development Programme, it is estimated that cu rrently over 25 transponders of satellite capacity 
have been leased to customers in Pakistan (inc luding Pakistan Telecommunication Company Limited 
(PTCL), Pakistan Television (PTV), private se ctor Data Network Operators, TV channels, 
Educational Institutions, defense establishment, Telecom operators). This translates into annual 
revenues of approximately US$ 28 milli on from satellite capacity leases in Pakistan. It is estimated 
that with the introduction of DTH services this year,  the demand for satellite  capacity by 2010 will 
grow by over 50% to over 40 transponders. The annual revenues from sate llite capacity leases are 
expected to jump by over 40% to around US$ 39 mil lion during the same period. For the provision of 
Telecommunication Services the licensing Authority is the Pakistan Telecommunication Authority (PTA) and for the provision of Broadcasting S ervices the Licensing authority is the Pakistan 
Electronic Media Regulatory Authority (PEMRA). The procedure of getting licenses from these two 
authorities is transparent and is available in  their Web Sites (www.pta.gov.pk and 
www.pemra.gov.pk).  
 
WTO Secretariat's Report, page 105, para. 88 
 50. Is Pakistan considering of lowering the licen se fees and abolish the contributions to R&D 
Fund to bring cost of service closer to the actual costs of its provision? 
 
These proceeds and the Fund are needed to d evelop and promote an efficient, competitive and 
effective ICT infrastructure. Pakistan at present is  not considering either lowering of license fees or 
abolishing the contribution by the licensees to the R&D Fund.    WT/TPR/M/193/Add.1 
 Page 51 
 
 
 WTO Secretariat's Report, page 106, para. 93 
 
51. In interconnection, which is the procedure fo r making sure that rates are cost based? Does 
Pakistan rely on competition to bring prices down or is there regulatory intervention to make 
sure that such rates are cost based? 
 
As the market becomes more compe titive, the regulatory interventions are accordingly being reduced 
or withdrawn. Pakistan is pursuing a policy to  make interconnect rates cost based and hopes to 
achieve that goal by the end of 2008.  
 
The interconnect charges in Paki stan are presently bench marked an d base interconnect tariffs are 
being regulated in accordance with Teleco m Rules 2000 and Interconnection Guidelines 2004. 
Pakistan Telecom Authority (PTA) reviews the cost study/models developed by the operators and 
makes its own studies to develop its cost model in co nsultation with the industry. The interconnection 
charges of significant market powers (SMPs) are regulated by PTA.  
 
(iii) Transport  
 
WTO Secretariat's Report, page 108, para. 99 
 
According to the WTO Secretariat's Report, "all port  terminals at Karachi and Qasim Ports are run by 
international contractors and face competition from the terminal at Port Qasim operated by P&O 
Ports". In the EC's view, instead of P&O Ports it should be read "by DP World".   52. Could Pakistan confirm this?   It is confirmed that the Port Qasim Internationa l Container Terminal, initially operated by P&O, is 
being run by DP World at present.  
 
With regard to Pakistan's policy concerning th e carriage of government cargo, for example, the 
requirement that the transportation of crude o il is conducted by the Pakistan National Shipping 
Corporation. 
 
53. Could Pakistan comment on whether it intends to  review this practice in order to facilitate 
open access to the market for international maritime transport operators? 
 
The Pakistan Merchant Marine Policy of 2001 gives government/public sector cargo preference to 
PNSC vessels and Pakistani flag vessels over foreign flag vessels. 
 However, the carriage of crude oil cargo by National flag carrier is not determined by Right of First 
Refusal. Rather the PNSC has adopted transparent f reighting method with the refineries, which is an 
internationally accepted practice. Accordingly, PNSC has a 10 year contract of agreement (COA) 
with 3 refineries (two of the three are wholly priv ate owned while the third is a partnership of a 
foreign investor and the Pakistan Gover nment) to carry crude for them. 
 
54. Could Pakistan provide information as to th e operation of the 2002 Shipping Ordinance which 
reserves the carriage of 40% of Pakistan’s ex ternal trade for Pakistani vessels and the 
activities of the Shipping Rates Advisory Board?  
 
The Policy of 40-40-20 was originally adopted fr om UNCTAD - Code for Conference Lines. Since 
Conference Lines do not exit any more, therefore, the policy is no longer followed. Presently Pakistan 
flag vessels carry approximately 20% of Pakistani sea trade by volume. The rest, 80%, is handled by foreign flag vessels. WT/TPR/M/193/Add.1 
Page 52  
 
 Shipping Rates Advisory Board (SRAB) is not yet functioning as the case is subjudice. However, 
SRAB is meant for controlling local charges and not  the foreign charges of international shipping. 
 
55. Does Pakistan intend to review these measur es in favour of practices that are conducive to 
open access to the market for international maritime transport services? 
 
As mentioned above, this policy has already been reviewed and 80% of sea trade cargo by volume is 
being carried by foreign maritime transport service providers.  
 
Some transport operators have noted that they are taxed 4% freight tax on both import and export 
revenues.  
 56. Could Pakistan please comment on this?  
There is no tax like "freight tax" on import and export revenues of transport operators. 
 
It is understood that all Afghanistan transit cargo is  controlled by the National Logistic Cell which can 
issue a No Objection Certificate, at a charge, to  assign the carriage of such cargo to other operators. 
 57. Could Pakistan comment on whether the char ge levied can be eliminated and provide 
information as to what this charge covers? 
 
Afghanistan transit cargo is not trans ported by the National Logistic Cell (NLC) alone. Pakistan 
Railways also picks up the cargo. The charge referred to is in the form of a service fee collected for 
providing security in transit and handling of cargo at the terminals. There is no immediate plan to 
withdraw this charge.   
 
EUROPEAN COMMUNITIES – REPL IES TO ADDITIONAL QUESTIONS
 
 
WTO Secretariat's Report, page x, para. 8  
 
According to the WTO Secretariat's Report, "Pakis tan's investment framework has hardly changed 
since its previous Review. Only a few sectors (e.g. media, tourism, and air transport) remain closed to 
foreign investment or subject to restrictions".   1. Could Pakistan elaborate on the reasons for not having made further progress in the 
liberalization of its investment framework?  
 
The very fact that FDI inflows to Pakistan ha ve increased by three fold  since 2002 reaching 
US$6 billion approximately in fiscal year 2006-07, bears testimony to the conducive and investor 
friendly environment in Pakistan. The economic reforms encompassing areas such as financial 
services, telecom services, energy and strengthening of the regulatory framework have led to a 
creation of favourable environment for foreign in vestors and Pakistan’s existing investment regime 
compares favourably with other countries in the reg ion. An overwhelming pr oportion of changes to 
our domestic laws affecting investment have been  designed to promote greater openness to FDI. 
100% FDI is permitted in almost all sectors and spec ial tax incentives have been  introduced towards 
this effect.   
Pakistan has recently declared Tourism as an Indus try and has allowed 100% foreign equity in this 
sector. No permission is required for setting up touris m projects in the private sector. Similarly, Civil 
Aviation (Air business) is also open to foreign in vestors with 49% foreign equity. However, Media 
(Newspapers, Radio Stations and TV Stations) is op en to companies subject to the condition that 
majority shares are owned or controlle d by domestic entities or individuals.  WT/TPR/M/193/Add.1 
 Page 53 
 
 
 2. Could Pakistan indicate whether it has plans to undertake further liberalization, and if so, in 
which sectors?  
 
Pakistan is undertaking second generation reforms par ticularly in areas such as governance, legal, 
capital and equity markets. There is still a need fo r Investment in sectors like Power Oil and Gas. To 
reduce the impediments faced by investors in th ese sectors the government has approved Petroleum 
Policy & Power Policy 2007. These policies are co mparatively more investor friendly than the 
previous ones. Furthermore, reduction in minimu m equity in the services and insurance sectors is 
under consideration. 
 
(3) M AIN MACROECONOMIC POLICY DEVELOPMENTS  
(i) Monetary and exchange rate policy  (b) Exchange rate policies  
 
WTO Secretariat's Report, page 7, para. 15 
 
The WTO Secretariat's Report states: "While the nomin al effective exchange rate depreciated by some 
15% (slowed by SBP intervention) from 2001/02 to 2006/07, higher inflation relative to trading partners means that the real exchange rate has appreciated continuously since 2003/04 (1.9% in 
2005/06 and 0.8% in 2006/07). This may have contri buted to Pakistan's declining international 
competitiveness; the fall in export growth in 2006/ 07 to 0.4% (9.9% in 2005/06) also reportedly 
reflected one-off supply factors and EC-specific preferences and safeguards".  
 3. Is the Government of Pakistan consider ing the introduction of greater exchange rate 
flexibility in order to align the value of its currency to its macroec onomic fundamentals?  
 Pakistan is following a market-based exchange rate  regime since early 2000. As customary for the 
Central Banks, the State Bank of Pakistan occasiona lly intervenes in the Inter-bank market in order to 
contain excessive volatility in th e market. The State Bank of Pakistan also keeps an eye on the 
movement of Real Effective Exchange rates (REERs) so  as to maintain the country’s competitiveness 
vis-à-vis its trading partners / competing countries. The recent data of Real Effective Exchange Rates 
suggest that the past misalignment stands consid erably corrected. This fact was also recognized by 
the IMF in the course of the recent Article-IV c onsultations with Pakistan and the Fund did not 
advocate any further adjustment in Rupee – Dollar parity as the value of Pak Rupee was found compatible with the country’s overall macroeconomic fundamentals. 
 
(4) M
AIN STRUCTURAL POLICY DEVELOPMENTS  
(i) Tax and expenditure reforms  
(a) Taxation  
 
WTO Secretariat's Report, page 9, para. 22 
 
According to the WTO Secretariat's Report, "The number of people paying tax remains "abysmally 
low", despite improvements in 2006/07. Only 1.5% of  the populations are registered taxpayers:  less 
than half of these file income tax returns, and one tenth file GST returns. Moreover, the sectoral 
incidence of the tax burden is highly uneven and th e overall burden falls disproportionately on large-
scale manufacturing. Agriculture (largely a provi ncial tax matter), which, like manufacturing, 
accounts for almost one fifth of GDP, contributes only  1-2% of total tax revenue while manufacturing 
accounts for well over half; the authorities expect this imbalance to improve as tax reforms progress".  
 4. Which steps are the Pakistani authorities taking in order to distribute the tax burden sectoral 
incidence and to increase the tax base?  
 WT/TPR/M/193/Add.1 
Page 54  
 
 Efforts for broadening the tax base are being pursu ed while extending all facilitation to taxpayers. 
The data base is being developed to capture inform ation from third party providing ready access 
regarding transactions and tradi ng activity of the potential taxpayers. The Master tax number data 
will have interface with the nationa l data base. The enforcement effort s are also being beefed up. The 
co-location of income tax and sales tax in Regional Tax Offices (RTOs) is al so expected to provide 
real time information exchange about defaulters and will prove conducive for increasing tax base.  
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES.  
(4) T
RADE AGREEMENTS AND ARRANGEMENTS  
(i) World Trade Organization  
(c) Dispute settlement   
Pakistan's Report, page 11, para. 43  
 
The Report by the Government states: "On 8th November 2006, Pakistan issued implementing 
legislation on the "ICSID Convention" on the Settle ment of Investment Disputes between States and 
Nationals of Other States. Before this, the "New York  Convention" also entered into force in Pakistan 
on the 12 October 2005. Both these measures are majo r steps forward in demonstrating Pakistan's 
commitment to transparency in the resolution of international investment disputes".  
 5. Regarding the "New York Convention" could Pakistan pl ease explain why some public 
companies are challenging international awards in Pakistani courts instead of applying the 
regulations of the Convention and recognising these awards?  
 
Domestic legislation provides for enforcement of international arbitration awards in Pakistan. 
Pakistan is signatory to both ‘New York Con vention’ and ‘ICSID’ and stands committed to 
transparency in the resolution of in ternational investment disputes. If there is any specific case 
reference, we would be pleased to consider and respond.  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE.  
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
 
WTO Secretariat's Report, page xii, para. 22  
 
According to the WTO Secretariat's Report, "P akistan still has no uniform labelling and marking 
system".   
6. Is Pakistan determined to implement m easures in order to harmonize the labelling and 
marking system?  
 
PSQCA- the national standards body of Pakistan is already engaged in harmonization of labelling 
and marking system in order to bring it in compliance with the Agreements on TBT and SPS. 
Similarly, on food products, relevant standards on Labelling of Pre-packaged foods including Halal 
declared foods, established by WHO / Codex standar d is fully adhered to while formulating national 
standards.  So far 50 technical regulations are enforced by the PSQCA under the Import Policy, thus ensuring 
compliance of the labelling and marking scheme with  the internationally recognized standards  like 
IEC , WHO/Codex standards.  
7. If so, what measures does Pakistan intend undertaking?    WT/TPR/M/193/Add.1 
 Page 55 
 
 
 In order to harmonize labelling and marking system with multilateral obligations, many MRAs 
(Mutual Recognition Agreements) and MoUs have already  been signed with national standard bodies 
for having an effective interactive mechanism between the regional/international standardizing agencies. A number of MoUs and MRAs are also in the advanced stage of finalization with the concerned agencies. 
 
(ii) Tariffs  
(iii) Customs valuation, minimum import prices and preshipment inspection  
 
WTO Secretariat's Report, page 47, para. 33  
 
According to the WTO Secretariat's Report, "Customs  has used its "take over" legislation introduced 
in 2006 to determine customs values of targeted  goods to guard against rampart fraudulent under-
invoicing. If the importer does not agree to raise the d eclared value to this offer, Customs "takes over" 
the goods and sells them to the local bidder, paying the importer his declared value plus 5%. Customs 
has "taken over" only one import consignment, of motor cycle parts".  
 Local manufacturers are trying to stop these unfair trade practices by importing goods that are being under-invoiced in smaller quantities at actual prices  and recording these prices with the Valuation 
Department of the Central Board of Revenue in Ka rachi, thus benchmarking them as reference prices 
for subsequent imports of goods.  
 
8. Could Pakistan inform us wh ether it intends to change Section 25A, Customs Act to eliminate 
under-invoicing completely. 
 
Section 25A was introduced to combat under invoic ing and valuation frauds. However it is used in 
rare cases.  Efficacy of the legislation remai ns under review and could be changed if and when 
warranted. 
 
(iii) Customs valuation, minimum import prices and Preshipment inspection 
 WTO Secretariat's Report, page 48, para. 33 
 9. Can Pakistan provide info rmation about recent changes in its customs valuation law, 
providing for a change to the system laid down in  the WTO Customs Valuation Agreement in relation 
to the sequential order of applicati on of the methods of valuation?  
 The recent changes in Customs legislation are ava ilable at FBR’s website www.fbr.gov.pk. Valuation 
legislation as embodied in Sec 25 and 25A of the Customs Act 1969 follows the methodologies set out in WTO Agreement on Customs Valuation (ACV):  namely, transaction value, transaction value of 
identical goods, transaction value of similar goods , deductive method, computed method and fall back 
method. Pakistan’s legislation as amended is consis tent with the sequential order envisaged in ACV. 
 
10. Is it the case that, now, the customs authoriti es can determine a custom s value in accordance 
with Section 25 (or 25A) of the 1969 Finance Act in a manner that does not follow the hierarchy of valuation methods laid down in the WTO Customs Valuation Agreement? 
 
The Customs value of imported goods is determin ed by customs according to section 25 of the 
Customs Act 1969 applying the hierarchy of valuatio n laid down in the WTO ACV. The Section 25A is 
only invoked in such exceptional cases where importers fa il to substantiate the accuracy of the invoice 
value. Even in these cases the hierarchy of  valuation methodologies is followed. 
 WT/TPR/M/193/Add.1 
Page 56  
 
 11. Can Pakistan state when it will provide a copy  of this legislation to the Customs Valuation 
Committee?  
 
The copy of legislation is available on FBR’s websit e. It would be submitted to the Customs Valuation  
Committee  before its next meeting 
 
(x) Standards and other technical requirements  
(a) Standards and quality certification  
 
WTO Secretariat's Report, page 56, para. 63  
 
According to the WTO Secretariat's Report, "T he Pakistan National Accreditation Council (PNAC) 
remains the national accreditation body for testing laboratories and other conformity assessment facilities. It applies international standards and h as accredited 24 testing and calibration laboratories, 
including in pharmaceuticals, textiles, chemicals,  engineering, and food. ..The PSQCA’s System 
Certification Centre was recently established and is to be fully operational shortly".  
 The PSQCA has to check brands of over 1,000 licensed industries across Pakistan. 
12. How is the process of restructuring this agen cy going to affect the Certificate System in 
Pakistan?  
 
PSQCA being a national apex body under PSQCA Act 1996 and national enquiry point for WTO has been working on inspection of manufacturer’s qua lity product and guarantees safety and reliability 
ultimately to the customer after ensuring complia nce with the Pakistan Standards. In this regard 
PSQCA has launched a Compulsory as well as Voluntary Certification Marks System. Recently 
System Certification Centre of PSQCA has been d eveloped and engaged in final take off. Under this 
scheme documentation process has been complete d, trained manpower has been appointed and 
assessment process is to be carried out. It may be poi nted out that for rationalization and to provide a 
traceable and reliable mechanism  amongst all the Franchised or foreign based ISO QMS certifying 
agencies in Pakistan, a need was felt to operate a QMS Certification System  Centre as independent 
and impartial unit with the traceability to the public  sector. In view of the need, the SCC of PSQCA 
has been established. Such restructuring e fforts of PSQCA would have a positive impact on 
facilitating certification, as PSQCA is the agency re sponsible for industries / products that fall under 
compulsory standards. PSQCA is in process of signing MOU with various countries for mutual recognition of standards. 
 
13. Is Pakistan going to enter into agreemen ts on mutual recognition with international 
certification agencies such as Bureau of International Weights and Measures (BIPR), 
Organization of Legal Metrology (OIML), International Laboratory of Accreditation 
Cooperation (ILAC), Asia Pacific Laborator ies Accreditation Cooperation (APLAC) and 
International Accreditation Federation (IAF) in order to comply with requirements like, for 
example, Technical Barriers to Trade (TBT)? 
 The Government has recently approved a number of d evelopment plans with big investment including 
conformity assessment project for the year 2007-20 08. In this regard, certain confidence building 
measures for strengthening of quality assessment infrastructure human resources Developments were 
undertaken to meet the WTO/TBT challenges. Agreements with so me international certification 
agencies on mutual recognition are already under negotiation. 
  WT/TPR/M/193/Add.1 
 Page 57 
 
 
 (4) M EASURES AFFECTING PRODUCTION AND TRADE  
(iv) Competition and consumer policy  (a) Competition policy  
 
WTO Secretariat's Report, page 77, para. 132 
 
It appears from the report that Pakistan is in the process of establishing a new competition regime.  
 14. Could Pakistan please inform us about the content of the new legislation?  
 Monopolies and Restrictive Trade Practices (Contro l & Prevention) Ordinance, 1970 has been 
repealed after promulgation of Competition Ordina nce, 2007 w.e.f. October 2, 2007. The new law 
prohibits abuse of dominant position, certain ant i-competitive agreements  and deceptive market 
practices. It gives mandate to the Competition Commi ssion to review mergers & acquisitions, which 
meet certain prescribed thresholds. The leniency pr ovisions have been introduced for effective 
implementations. The law also provides emphasis on adv ocacy role of the Commission. It will help to 
develop a conducive environment for businesses and investment in Pakistan.  
 
15. What is its scope of application?   
The law extends to the whole of Pakistan. It applies to all undertakings including a regulatory 
authority and all actions taken anywhere which have the effect of distorting competition within 
Pakistan.  
 
16. When will it enter into force?   It has come into force from the date of promulgation i.e. October 2, 2007. 
 
17. Who will be the enforcement aut hority and with what resources?  
 
Competition Commission of Pakistan, established under Section 12 of Competition Ordinance, 2007, 
is the enforcement authority of Competition Ordinance, 2007. With regard to resources a 
Commission Fund established under Section 20 of th e Competition Ordinance, 2007 consists of: 
 a) allocations by the Government; b) charges, fees and penalties levied by the Commission; c) contributions from local and foreign donors or  agencies with the approval of the Federal 
Government; 
d) returns on investments and income from assets of the Commission; e) all other sums which may in  any manner become payable to or vested in the Commission; and 
f) a percentage of the fees and charges levied by other regulatory agencies in Pakistan as 
prescribed by the Federal Government in  consultation with the Commission. 
 18. Who are the sectoral regulators with competence to regulate competition matters and what 
will the interrelationship be with the competition authority? 
 
The sectoral regulators are: 
 
i) the National Electric Power Regulatory Au thority established under the Regulation of 
Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997), 
ii) the Pakistan Telecommunication Authority established under the Pakistan 
Telecommunications (Reorganization) Act, 1996 (XVII of 1996); and WT/TPR/M/193/Add.1 
Page 58  
 
 iii) the Oil and Gas Regulatory Authority establis hed under the Oil and Gas Regulatory Authority 
Ordinance, 2002 (XVII of 2002);  
iv) Pursuant to Section 48 read with Section 51  of the Ordinance all agencies of the Federal 
Government are under the obligation to supply information and provide assistance to the 
Commission in the discharge of its functions. 
 
An Order passed by the Commission has an overriding effect over all other laws. 
 (v) Intellectual property rights (IPR)  
 
WTO Secretariat's Report, page 79, para. 138 
 
According to the WTO Secretariat's Report, "Claims th at trade marks are weakly  enforced are rejected 
by the authorities. There are also claims that there is patent infri ngement in pharmaceuticals by firms 
being licensed to produce patented drugs, with inconsistent enforcemen t of court injunctions, 
protection against unfair commercial use of test or other data submitted to authorities for registration 
is also said to be inadequate".   19. What kind of measures will Pakistan implemen t in order to protect the intellectual property 
rights especially in pharmaceutical and agrochemical sectors?  
 
(1) Pakistan, during the years 2000-02 upgraded the existing legislation on Intellectual Property 
i.e. Copyright, Patents and Trade Marks and promulgated new laws in compliance with 
Pakistan’s obligation under TRIPS Agreement. Paki stan is committed to follow its obligations 
under this Agreement for IPR protection.  
(2) As a linkage between IPO-Pakistan and the Mi nistry of Health, Patent Controller has been 
placed as a Member on the Drug Registration Board of the Ministry of Health.  
(3) Under the current law, the courts have necessary jurisdiction to adjudicate cases of "unfair 
commercial use". 
(4) Amendments are under consideration for prot ecting the undisclosed test data from "unfair 
commercial use" submitted to the regulatory aut hority for registration of a drug, utilizing 
a new chemical entity. Based on the experien ce in the pharmaceutical sector, appropriate 
legislation would be introduced  for the agrochemical sector.  
Pakistan's Report, page 15, para. 63 
 According to the Report by the Government, "Pakis tan has upgraded its regime for the protection of 
intellectual property rights (IPRs) in line with its commitments in the agreement on Trade Related 
Intellectual Property rights (TRIPS). This includ es strengthened protection of intellectual property 
rights and enhanced enforcement m echanisms. An integrated umbrella in the form of "Intellectual 
Property Organization of Pakistan" has been establis hed for dealing with all aspects of IPRs".  
 
20. Could Pakistan please inform us about the sc ope of the interventions carried out by this 
Organization, especially in view of the dema nds placed by the International Federation of 
Phonographic Industry (IFPI) about the situation of piracy in Pakistan?  
  WT/TPR/M/193/Add.1 
 Page 59 
 
 
 1. The existing IP laws of Pakistan are TRIPS comp liant. Legislation to cater the new situations 
is an ongoing process. IPO Pakistan being a new Organization is still in the phase of gaining 
experience on the implementation of its existing laws.  
2. The copyright legislation of Pakistan has made copyright piracy a cognizable  and non-
bailable offence , under Section 74 of the aforesaid le gislation. Criminal courts are 
empowered to impose fine on the offender (Section 74A).  
3. IPO Pakistan has embarked upon an extensive c apacity building programme for the target 
groups, including Judicial Officers and lawyers.  
4. IPO Pakistan has coordinated with the vendors to  enable them to shift to legitimate business. 
All Pakistan Audio / Video Traders Welfare Associ ation, which is the main association of 
vendors has started self-regulating their business in response to the initiatives of IPO 
Pakistan.  
5. Pakistan Customs has established Anti-Pira cy Cells (APCs) at the country’s major 
international airports to strengthen the enforcement of anti-piracy law.  
6. At the policy level, an effective public-private  partnership mechanism has been introduced, 
which, beside government agencies, also  includes representatives from the American 
Business Council; Overseas In vestors Chamber of Commerce and Industry ; Federation of 
Pakistan Chambers of Commerce and Industry; Oxford University Press; and pharmaceutical 
sector (both national and multinational corporations).  
7. At the operational level, regional enforcement coordination committees have been set up at 
Islamabad, Karachi and Lahore to impr ove institutionalised coordination. 
8. These efforts of improved enforcement have b een duly acknowledged by the International 
Federation of Phonographic Industry (IFPI). They has confirmed that the import of optical grade polycarbonate - a raw material for manufac turing optical disks has drastically reduced 
by over 95% and that export of pirated CDs/DVDs  has dried up from Pakistan’s airports. The 
remaining import of this raw material has also been checked and confirmed by IFPI to be for 
legitimate purposes. 
 
IV. TRADE POLICIES BY SECTOR 
(2) A
GRICULTURE , LIVESTOCK , FORESTRY , AND FISHERIES .  
(iii) Main subsectors  (c) Fisheries  
 
WTO Secretariat's Report, page 88, para. 31 
 
According to the WTO Secretairat's Report, "The nu mber of fishing licenses is fixed at 20 for Zone II 
and 10 for Zone III:  there are 18 vacant licenses and no Zone III licensees; 47 applications were 
received at end-August 2006. No licensed foreign vessels operate in Pakistan’s Exclusive Economic 
Zone (EEZ). Such licenses may be granted in exceptional cases where a foreign firm makes a 
"sizeable" investment in establishing value-a dded shore-based facilities, such as canning and 
processing, and transfers technology. The provinc ial governments of Sindh and Balochistan have 
separate legislation affecting fisheries. For example, the Sindh Government requires trawlers with over six crew to have turtle excluder devices".  
 
21. Could Pakistan please clarify what it considers to  be "sizeable investment" in order to grant a 
fishing license?  
 
There is no fixed threshold for sizeable investment . However, the economic and social benefits in 
consultation with the stakeholders would help decide  the grant of fishing licence. It is pertinent to 
mention that the general investment policy provides for a minimum equity of USD 0.3 million by the foreign investors intending to enter into agricu lture sector, including fisheries, in Pakistan. 
 WT/TPR/M/193/Add.1 
Page 60  
 
 EUROPEAN COMMUNITIES – REPLIES TO ANNEX ADDITIONAL QUESTIONS
 
 
EC question 4 liberalisation under SAFTA 
 
Pakistan states that according to the World Bank, Pa kistan is considered "the most transparent and 
liberal" country in South Asia. Such asse ssment is of course very good news.  
 Q 1. In order to be able to refer to this in the fu ture, could Pakistan please provide the source of the 
relevant World Bank report?  
 This reference was meant to convey "ease of doi ng business". According to 2007 World Bank Report 
on ‘Doing Business in South Asia’, majo r South Asian economies are ranked under: 
 Pakistan – 74 Bangladesh – 88 
Sri Lanka – 89 
India – 134  (Economies are ranked on the ease of doing business from  1 – 178, with the first place assigned to the 
country offering maximum ease and comfort).  
Report No. 35499-PK: "Pakistan Growth and Ex port Competitiveness" by World Bank" also 
reiterates this connotation. 
 
EC question 9 on coverage of Pakistan's RTAs 
 
We very much appreciate the detailed information Pakistan provided to clarify that question.  
 Q 2. In order to fully assess coverage of Pakistan's RTAs though, we would appreciate if Pakistan 
could express – if possible - coverage as percentage  of both tariff lines and also of trade.  
The coverage of Pakistan’s RTAs in terms of percentage  of tariff lines is given below. As regards the 
coverage as a percentage of trade, Pakistan has implemented HS 2007 sin ce July, 2007. The RTAs 
have been implemented in HS 2002 ver sion.  Therefore, the coverage as percentage of trade is not 
readily available.  
 
Pakistan – Malaysia FTA  
%age of tariff lines 
Track name End rate Time period 
Pakistan Malaysia 
Fast 0% 2 years 25.03 63.23 
Normal 0% 4 years 18.16 11.45 
Sensitive – I 5% 6 years 11.70 2.13 
Sensitive – II 10% 6 years 8.70 5.81 
Sensitive – III 20% 3 years 20.92 12.04 
MOP Track – I 20% MOP 3 years 1.89 Nil 
MOP Track – II 15% MOP 2 years 0.13 Nil 
Highly Sensitive No concessions in the first phase 5 years 11.25 4.24 
Exclusion List Not subject to the terms and 
conditions of the FTA  2.19 0.90 
TRQ 0% for in quota volume Applied MFN when 
the yearly quota 
expires Nil 0.16  WT/TPR/M/193/Add.1 
 Page 61 
 
 
 Pakistan – China FTA  
%age of tariff lines Track name End rate Time period 
Pakistan China  
Category – I 0% 3 years 35.62 35.5 
Category – II 0-5% 5 years 19.67 34.5 
Category – III 50% MoP 5 years 2.31 8 
Category – IV 20% MoP 5 years 25.99 7 
Category – V No concession in the first phase 5 years 15.06 15 
Category – VI Excluded from the scope of the 
Agreement  1.35 - 
Pakistan-Sri Lanka FTA 
Description of concession  Pakistan 
(Tariff lines at 6-digit HS) Sri Lanka 
(Tariff lines at 6-digit HS) 
100% concession list on which tariff has been eliminated on 14 June 2005 102 206 
No-Concession List  540 697 
Margin of Preference (MOP) on 
applied MFN rate, implemented since 
14 June 2005 06 (20%) 
11 (50%) - 
Tariff Rate Quota (TRQ)  - Long Grain Pakistani Rice (Basmati) 6000 MT 
at 0% Customs Duty 
 
Potatoes 1,000 MT per year (2/3) of which during June-July and 1/3 during Oct-Nov each 
year) at 0% Customs Duty. 
Elimination of Tariff by Pakistan (June 2008) and Sri Lanka (June 2010) 
in annual equal reductions All except 540 Lines All except 697 Lines 
TARIFF PHASING OUT SCHEDULE:  
It was agreed that phasing out of tariff would be on Margin of Preference (MOP) of the MFN rate as per the following schedules.  
 
Pakistan: 
i. Not less than 34 per cent upon entry into 
force of the Agreement. 
ii. Not less than 67 per cent at the end of 
second year. 
iii. 100 per cent (bringing applicable tariff to 
zero) at the end of the third year. Sri Lanka: 
(a) Not less than 20% per cent upon entry into force of the Agreement. 
(b) Not less than 30 per cent at the end of the first year. 
(c) Not less than 40 per cent at the end of the second year. 
(d) Not less than 60 per cent at the end of the third year. 
(e) Not less than 80 per cent at the end of the fourth year. 
(f) 100 per cent (bringing applicable tariff to zero) at the end of the fifth 
year. 
 
South Asian Free Trade Area (SAFTA) 
Countries No of tariff lines (final) Percentage 
Bangladesh 1254 24% 
Bhutan 157 3% 
India 865 16.9% 
Maldives 671 12.8% 
Nepal 1313 25.5% 
Pakistan 1183 22.6% 
Sri Lanka 1065 20.3% 
Under the SAFTA the following roadmap for Trade Liberalization Programme (TLP) has been adopted by the Member States:  WT/TPR/M/193/Add.1 
Page 62  
 
 (i) Non LDCs to LDCs 
Schedule Decision 
1st July 2006 India, Pakistan and Sri-Lanka reduce their customs tariff for LDCs by 10% MoP 
31st December 2006  India, Pakistan an d Sri-Lanka reduce their customs tariff for LDCs by 30% MoP 
31st December 2007 India, Pakistan an d Sri-Lanka reduce their customs tariff for LDCs by 30% MoP 
31st December 2008 India, Pakistan an d Sri-Lanka reduce their customs tariff for LDCs by 25-30% 
MoP 
  
(ii) Non LDCs to Non LDCs   
Phase-I :  
For tariff higher than 20%, already brought  down to 20 % by 31 December 2007. 
1st July 2006 to 31st December 2007 (a) Tariff to be brought to l20% in two equal instalments. 
 (b) The first instalment to be implemented on 1st July 2006. 
For tariff lower than 20%  
1st July 2006 5% MoP 
31st December 2006  5% MoP 
31st December 2007 10% MoP 
Phase-I   
31 December 2008 to 31 December 2013 0-5% in five equal instalments 
Sri-Lanka  
31 December 2008 to 31 December 2014 0-5% in five equal instalments 
(iii) LDCs to all contracting States  
Phase-I :  
(a) The tariffs higher than 30%, alread y brought down to 30 % by 31 December 2007. 
1st July 2006 to 31st December 2007  (a) Tariff to be brought to 30% in two equal   instalments. 
 (b) The first instalment to be implemented on 1st July 2006. 
(b) For tariff lower than 30%  
1st July 2006 2 ½ % MoP  
31st December 2006 2 ½ % MoP  
31st December 2007 5% MoP  
Phase-II :  
Bring down tariffs to 0-5 % level in ei ght equal instalments by 31 December 2015. 
31st December 2008 to 31st December 2015 0- 5% in eight equal instalments 
  
The Protocol on the Preferential Tariff Scheme for TPS OIC (PRETAS)  
The "PRETAS" provides for reduction of tariffs on only 7% of HS  lines, having an applied tariff of 10% and above. The tariffs w ill be 
reduced in a phased manner, wherein the developing countries would phase out reduction in 4 years and the LDCs in 6 years.  
Pakistan-Mauritius PTA  
The Pakistan-Mauritius PTA has been operational since 30th November,  2007. The PTA will convert into an FTA with in 18th months . 
The tariff reduction modalities as under: 
Mauritius has agreed to reduce duty on 50% Margin of Preference (M oP) on goods exported from Pakistan at the end of the year fr om 
date of operation to 100% MoP in the following year.  
Pakistan has agreed to allow 35% to 50% reduction on Margin of  Preference (MoP) and a Tariff Rate Quota (TRQ) of 200,000 to 
300,000 pieces to textile exports from Mauritius. 35% to 50% in the end of year from the date of operation and 100% MoP in the 
following year.  
  WT/TPR/M/193/Add.1 
 Page 63 
 
 
 EC question 18 on tariff rates on motor vehicles 
 
We appreciate that tariff rates on motor vehicles have  been reduced by Pakist an since the last TPR 
and welcome that Pakistan aims to provide predictab ility and stability in its tariff regime. Pakistan has 
informed that the year wise tariffs on imported ve hicles were announced for the next five years.  
 
Q 3. Could Pakistan please provide more detailed in formation on the planned evolution of this 
tariff over the next five years? At what rate is it at present? And is it going to stay at that level 
or change?  
Planned evolution of tariffs  
Category 2007-08 2008-09 2009-10 2010-11 2011-12 
Prime Movers below 280 HP (8701) 30% 30% 30% 30% 30% 
Prime Movers above 280 HP (8701) 15% 15% 15% 15% 15% 
Agriculture Tractors (8701) 0% 10% 10% 10% 10% 
Buses (Non-CNG)(8702) 20% 20% 20% 20% 20% 
Buses (CNG/LPG dedicated)(8702) 15% 15% 15% 15% 15% 
Cars/Jeeps (8703)      
Upto 800c 50% 50% 50% 50% 50% 
801cc to 1000cc 55% 55% 55% 55% 55% 
1001cc to 1500cc 60% 60% 55% 55% 55% 
1501cc to 1800cc 75% 75% 70% 70% 70% 
Exceeding 1800cc 90% 90% 85% 85% 85% 
LCVs (upto 5 tons) (8704) 60% 60% 60% 60% 60% 
Rigid Trucks (8704) 30% 30% 30% 30% 30% 
Trailers (8716) 15% 15% 15% 15% 15% 
Motorcycle (8711) 80% 70% 65% 60% 60% 
 
EC question 32 on Government Procurement 
 
Pakistan has informed that "Public Procuremen t Rules 2004 do not allow any discrimination on the 
basis of nationality except in cases where any procuring agency decides to limit such participation to 
national bidders only or prohibits participation of bidders of some nationalities in accordance with the 
policy of the Federal Government."   Q 4. Could Pakistan please provide further deta il on the criteria applied when procurement 
agencies decide to limit participation to national bidders or prohibit partic ipation of others? Is 
there a mechanism for appeal?    
 
The guidelines are available in the ‘Public Procu rement Rules 2004’. The m echanism for redressal of 
grievances, including the right to appeal is as follows:  
Redressal of grievances by the procuring agency: 
 (1) The procuring agency shall constitute a comm ittee comprising of odd number of persons, with 
proper powers and authorizations, to address the co mplaints of bidders that may occur prior 
to the entry into force of the procurement contract. 
(2) Any bidder feeling aggrieved by any act of th e procuring agency after the submission of his 
bid may lodge a written complaint concerning his grievances not later than fifteen days after 
the announcement of the bid evaluation report under rule 35.  WT/TPR/M/193/Add.1 
Page 64  
 
 (3) The committee shall investigate and decide upon the complaint within fifteen days of the 
receipt of the complaint. 
(4) The mere fact of lodging of a complaint shall not warrant suspension of the procurement 
process. 
(5) Any bidder not satisfied with the decision of  the committee of the procuring agency may lodge 
an appeal in the relevant court of jurisdiction.  
 EC question 35 on export taxes/ regulatory duties  
The Secretariat's Report states that "export taxes are prohibited (section 18(2), Customs Act). However, the CBR can impose regulatory duties (…) on exports". Pakistan informs in its response 
that such regulatory duty is levied on only two ite ms, namely wheat and non ferrous waste. Pakistan 
also informs that these regulator y duties are time bound and stand rescinded at the expiry of the 
financial year in which they are imposed.  
 
Q 5. We would welcome further clarification on the ex port duty levied on hides and skins. Is this 
indeed an export tax (which though according to the Secretariat's report should normally be prohibited)? Or is it a regulatory duty (which though according to Pakistan should thus stand 
rescinded at the end of the financial year)?  
 
Regulatory duty on hides and skins at 20% ad valore m was imposed to prevent local shortage. Rules 
relating to rescinding of the regulatory duty at the end of financial year have now been done away 
with. 
 
The Secretariat's report also states (page 59/ paragraph 77) that a regulatory duty of 30% was levied on exported leather goods.   
Q 6. Could Pakistan please clarify which leather goods are covered and – as above – whether this 
duty is indeed a regulatory duty or rather an export tax? 
 
In terms of SRO 1011(1)/2005, raw and wet blue hides and skins are subject to regulatory duty. 
 
EC question 37 on export taxes/ regulatory duties  
Pakistan states in its response, that regulatory duti es were levied to ensure domestic market stability.  
 
Q 7.  Could Pakistan confirm that domestic shor tage is the only legal basis upon which regulatory 
duties may be imposed? If not, which are the othe r justifications provided under the existing 
legislation (CBR)? 
 
Domestic shortage is the primary reason for levy of regulatory duty. Two other reasons are price 
stabilization and whether the importing country is re sorting to tariff escalation (levies lower duty on 
raw material as against finished or processed  goods) as is the case for leather goods.  
 
Q 8. According to the CBR and/ or current practices, what are the procedures, criteria and methods 
for establishing that the justifications for the im position of regulatory duties have been met?    
 
Shortage of a product in the domestic ma rket is assessed and rectified as follows: 
 
a. The industry concerned approaches the resp ective Chamber of Commerce and Industry, 
identifying the shortage in domestic market; 
  WT/TPR/M/193/Add.1 
 Page 65 
 
 
 b. The Chamber, respective association or the industry itself can approach the relevant Ministry 
for taking necessary steps to stab ilise supply of raw material; 
 c. The matter is examined by an inter-ministerial body;  
d. If the complaint is found justified, the case is referred to ECC (Economic Coordination 
Committee of the Cabinet). The Committee is chaired by Finance Minister, and includes among others, the Ministers of Commerce, Industries, Food & Agriculture and that of the relevant Ministry; and 
 
e. Upon decision to this effect by the ECC, the government issues notification and the regulatory 
duty is imposed. 
 f. It should however, be noted that regulatory duty is very rarely imposed. 
 
EUROPEAN COMMUNITIES – REPL IES TO FOLLOW-UP QUESTIONS
 
 
Original question:   
 
Some transport operators have noted that they are taxed 4% freight tax on both import and export 
revenues.  Could Pakistan please comment on this?  
There is no tax like freight tax on import and export revenues of transport operators. 
 
Follow up question: 
 
With regard to Pakistan's reply to the EC's ques tion on freight tax, we would like to seek additional 
clarifications. Our understanding is that there is a freight tax levied at the rate of 8% on foreign 
shipping companies (not on shippers or consignees) on ocean freight related charges and applied to all 
export freight as well as to import collect freight . Whilst the freight tax is administered on export 
freight under the 'Income Tax Ordinance, 2001', we  understand that Pakistan has more recently begun 
also levying the freight tax on import freight as we ll and with retroactive effect. Please could Pakistan 
explain how this situation is permissible and co mment, with regard to the freight tax, whether 
measures are being envisaged to create an environmen t more conducive to fair and free access to the 
international maritime market. 
 
There is no freight tax on transport operators. Ho wever, income tax at 8% is applicable on the 
income derived by the foreign shipping companies on goods carried from Pakistan. 
 
BRAZIL 
 
 
1. The report of the Secretariat has indicated that there are a number of outstanding notifications, 
when does Pakistan believe this situation will be corrected? 
 
Pakistan has submitted the notifications for Dome stic Support for the years  2000-2001 to 2006-2007 
under the document number G/AG/N/PAK/10 dated 9 Jan 2008. 
 2. Does Pakistan intend to incorporate Codex Alimentarius standards when it reviews its SPS-
related legislation?  
 WT/TPR/M/193/Add.1 
Page 66  
 
 Yes, Pakistan takes into account the guidelines prepa red by the Codex while formulating standards of 
agriculture products and produce. The present standar ds laid down for agriculture produce are in 
line with the Codex Alimentarius Standards.  JAPAN
 
 
Secretariat Report (WT/TPR/S/193) 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(viii) Local-content requirements and indigenization programmes 
 
Question 1: page 53, paragraph 58  
The Secretariat report explains a number of excise tax concessions which favour local content.  
 It would be appreciated if the Government of Paki stan indicates any justification for this measure in 
light of national treatment in Article 3 of GATT a nd Article 3.1(b) of the Agreement on Subsidies and 
Countervailing Measures.   Response shall soon be provided 
 
(x) Standards and other technical requirements 
 
Question 2: page 56, paragraph 64 
 According to the Secretariat report, Pakistan’s onl y notifications (25 notifications) to the WTO under 
the TBT Agreement were all submitted in June 2007. 
 
(1) Please explain this reason.    
(2) Does Pakistan find such a practice problemat ic in terms of maintaining transparency? 
 
Pakistan, despite its limited financ ial and technical resources always st rives to prepare and submit all 
require notifications to the WTO. As mentioned in the Secretariat Report, 25 notifications related to 
technical standards have been submitted.  Pakistan  will continue to make efforts to prepare and 
submit all required notifications in time.  
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(v) Intellectual property rights (IPR) 
 
Question 3: page 78, paragraph 135  
The Secretariat report states that Pakistan is considering introducing a "section 3(d)-type" provision 
designed to exclude from patentability the "mere discovery of a new form of a known substance 
which does not result in enhancement of the known e fficacy of that substance, the mere discovery of 
any new property or new use of a known substance, and the mere use of a known process, machine or 
apparatus – unless that process results in a new product or employs at least one new reactant," 
 
(1) Please indicate what criterion Pakistan considers to introduce in order to determine the 
difference between a mere discovery (that is  unpatentable) and a patentable invention. 
  WT/TPR/M/193/Add.1 
 Page 67 
 
 
 Pakistan is closely observing international developments  for the grant of quality patents and has yet 
to firm up its position on the issue.  
 
(2) Please indicate what criterion Pakistan considers to introduce in order to determine the 
enhancement of a known efficacy  of a known substance. 
 As mentioned above, Pakistan is closely observing international developments for the grant of quality patents and has yet to firm up its position on the issue.  JAPAN – REPLIES TO THE REMAINING QUESTIONS
 
 
The Secretariat report explains a number of ex cise tax concessions, which favour local content. 
 
It would be appreciated if the Government of Paki stan indicates any justification for this measure in 
light of national treatment in Article 3 of GATT a nd Article 3.1 (b) of the agreement on Subsidies and 
Countervailing Measures?  There are three instances, where indigenous contents  have been preferred (i) Aerated waters if 
manufactured wholly from juices or  pulp of indigenous sources like vegetable, food, grains, or fruit 
are liable to excise duty at 10% whereas other aerated waters (2201.1020) are chargeable to 12% 
Excise Duty (First Schedule to Federal Excise Ac t). (ii) Crude vegetable oil if obtained from locally 
grown seeds is conditionally exempted of Excise Du ty (Third Schedule) whereas edible oil excluding 
epoxidized soybean oil is chargeable to 15% Ex cise Duty (First Schedule). (iii). Non aerated 
beverage concentrate if used in the manufactu re of non-aerated drinks or aerated waters 
manufactured wholly from juices or pulp of indige nous vegetables, food grain or fruits and which do 
not contain any other ingredient indigenous or imported, other than sugar, colouring material, 
preservatives or additives prescribed under the West Pakistan Pure Food rules, 1965. 
 
The discrepancy at serial No. (iii) has already been removed through Finance Act, 2007. The 
remaining two are also likely to be resolved in the next budget after consultation with the 
stakeholders.  CHINA
 
Secretariat Report, page 20, para. 9 
 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES (3) T
RADE POLICY FORMULATION AND IMPLEMENTATION  
(i) Objectives and strategies  
 Trade is an important part of Pakistan's devel opment and poverty-reduction strategy.  Vision 2030, 
adopted in May 2005, aims to turn Pakistan in to a developed country by 2030 through rapid and 
sustainable development by, inter alia , deploying knowledge-intensive import items. 
 
Q.1. Could Pakistan please explain in detail on how its trade policies could contribute to achieve 
this development goal? 
 
This question is based on a typing error in the WTO Secretariat Report. Pakistan Vision 2030 aims to 
achieve a "developed, industrialized, just and pr osperous Pakistan through  rapid and sustainable 
development in a resource constrained ec onomy by deploying knowledge inputs " (emphasis added) 
and not "knowledge imports" as stated in the WTO Secretariat Report.  These knowledge inputs will WT/TPR/M/193/Add.1 
Page 68  
 
 be critical to transform an economy characterized  by low productivity and low technology into an 
economy of high technology and high productivity. 
Secretariat Report, page 32, para. 38 
 (5) F
OREIGN INVESTMENT REGIME  
 
Since its last Review, Pakistan has signed 30 bilateral investment treaties (BITs) bringing the total to 48. The authorities indicate that a BIT with the United States would facilitate greater investment and other economic cooperation. 
 
Q.2. Could Pakistan please explain in more de tail on how such arrangements would facilitate 
investment and economic cooperation betw een Pakistan and the United States? 
 
The main objectives of BITs are to provide grea ter economic cooperation with respect to investment 
between the two countries, to stimulate the flo w of private capital and to promote economic 
development. It would provide effective means of asserting claims and enforcing rights with respect to investment under the national law as well as interna tional arbitration, beside encouraging reciprocity 
in protecting investments between the two countries.  It would also provide a stable framework to 
maximize effective utilization of economic resource s and improve living standards of both countries. 
This agreement is essentially a stepping stone for greater economic cooperation between the two 
countries that will lead to more bilateral coop eration and more sector specific agreements in the 
future.
 
 
Secretariat Report, page 52, para. 55 
 
III. TRADE  POLICIES  AND  PRACTICES  BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
 (vii) Government procurement  
Pakistan is not a signatory or observer to the plurilateral WTO Agreement on Government 
Procurement and does not currently have plans to join it. However, according to the authorities, 
Pakistan’s current government procurement framewo rk is based upon international best practices 
aimed at eliminating corruption, improving tr ansparency, reducing delays, and enhancing 
accountability.   
Q.3. Could Pakistan provide further information on the structure and the operation of Pakistan’s 
current government procurement framework? 
 
The Public Procurement Regulatory Authority (PPRA) is an autonomous body endowed with the 
responsibility of prescribing regulations and proc edures for public procurements by Federal 
Government owned public sector organizations with  a view to improve governance, management, 
transparency, accountability and quality of pub lic procurement of goods, works and services. 
It is also endowed with the responsibility of monitoring procurement by public sector 
agencies/organizations and has been  delegated necessary powers under the Public Procurement 
Regulatory Authority Ordinance, 2002.   WT/TPR/M/193/Add.1 
 Page 69 
 
 
 OPERATIONS  
a. monitor application of the laws, rules, regul ations, policies and procedures in respect 
of, or relating to, procurement; 
b. monitor the implementation of and evaluate laws, rules, regulations, policies and 
procedures in respect of, or relating to, inspection or quality of goods, services and 
works and recommend reformulation thereof or revisions therein as it deems 
necessary; 
c. recommend to the Federal Government revisions  in or formulation of new laws, rules 
and policies in respect of or related to public procurement; 
d. make regulations and lay down codes of ethics and procedures for public 
procurement, inspection or quality of goods, services and works; 
e. monitor public procurement practices  and make recommendations to improve 
governance, transparency, accountability and quality of public procurement; 
f. monitor overall performance of procur ing agencies and make recommendations for 
improvements in their institutional set up; 
g. provide and coordinate assistance to  procuring agencies for developing and 
improving their institutional framew ork and public procurement activities; 
h. Submit reports to the Government in respect  of public procurement activities of 
procuring agencies; 
i. call any functionary of procuring agencies to  provide assistance in its functions and 
call for any information from such age ncies in pursuance of its objectives and 
functions. 
SCOPE AND APPLICABILITY  
PPRA covers all the agencies under the Federal Go vernment, within or outside Pakistan, and 
involved in public procurement including:  
a. Any Ministry, Division, Department or any office of the Federal Government. 
b. Any authority, corporation, body or org anization established by or under a Federal 
law or which is owned or cont rolled by the Federal Government. 
 
From some sources of information, we have noted th at Pakistan has become an important exporter of 
ethanol internationally.  
 
Q.4. Could Pakistan provide some information on its experiences of developing its ethanol 
production and export? 
 
Pakistan started manufacturing and exporting et hanol from sugarcane molasses. During 2006-07 
crop season, Pakistan exported about 34 million liters of  ethanol. It is further added that Pakistan 
expects 60 million tonnes of sugarcane from 2007- 08 crop that may lead to production of about 
2 million tonnes of molasses. From these molasses about 400 million liters of ethanol can be 
obtained.  Pakistan became a major exporter to the EC after 2002 when the import barriers were reduced in the 
EC’s market. Pakistan got the preferential duty rate and our exports of ethanol overtook the 
traditional molasses exports. By 2004 Pakistan had become  the biggest ethanol exporter, with volume 
of 31.28 million euros, to the EC, accounting for 20 % of its imports. In order to halt this rise in 
exports, the EU in 2005 not only withdrew all ta riff concessions but also started anti-dumping 
investigations. This resulted in a levy of $190 per to n of import duty, and Pakistan’s exports to the EU WT/TPR/M/193/Add.1 
Page 70  
 
 started falling rapidly. Most of its seven distill eries--which could produce 1 million litters a day—and 
another five new distilleries—which were in the process of being set up to produce another 
0.5 million liters a day—had to scale back their pro duction. Through tariff cuts due in the  Doha 
Round, Pakistan can once again become a major exporter of ethanol, which fetches 10 times the price of its raw material, molasses. 
 
CHINA – REPLIES TO ADDITIONAL QUESTIONS
 
 SECRETARIAT REPORT 
 
Page 26, para. 18  TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES (4) T
RADE AGREEMENTS AND ARRANGEMENTS  
(ii) Regional and other preferential Arrangements 
As an active promoter and participant of free trade, Pakistan is a member of several regional or 
plurilateral arrangements. 
 
Q.5. Could Pakistan please indicate any further plan  on its participation of regional or plurilateral 
arrangements? 
 Pakistan, though committed to the multilateral trad ing system, is also interested in exploring the 
potential benefits of plurilateral and regional arra ngements. We are in the process of initiating 
negotiations with MERCOSUR, ASEAN, EU, GCC and EFTA with an aim to deepen our trade 
relations. Pakistan is also a member of Gl obal System of Trade Preferences (GSTP) among 
developing countries; and is actively engaged in  negotiating tariff concessions under Sao Paulo 
Round. 
 
Page 42, para. 21 
 III. TRADE POLICIES AND PRACTICES BY MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariff  
Currently, Pakistan maintains an  average bound tariff rate 3 times higher than its average applied 
tariff rate. 
 
Q.6. Could Pakistan please elaborate the necessity of maintaining this difference between its 
bound rate and applied rate? 
 
As a first step, Pakistan wanted to increase its tariff binding level to bring transparency and 
predictability. As a result of the successful conc lusion of the Doha Round the difference between 
bound and applied rates would be g reatly reduced or eliminated. In many cases, such as textile and 
clothing there is no difference betw een bound and applied rates. 
 
Page 43, para. 24 
 
Currently, the average MFN tariff of Pakistan is 14. 5% while the rates for certain products are much 
higher, reaching nearly 90%. 
  WT/TPR/M/193/Add.1 
 Page 71 
 
 
 Q.7. Could Pakistan please explain the reason of maintaining this high tariff rate for those 
products? 
 
There are very few products for which the tariffs a re higher like 90%. These a re maintained primarily 
to discourage the consumption of  certain products like alcoholic beverages and protect the vulnerable 
industry. 
 CANADA
 
 
Report by the Secretariat (WT/TPR/S/193) 
 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES (5) F
OREIGN INVESTMENT REGIME  
 Para. 35, page 31 
  
The Secretariat Report notes a number of challenges associated with Pakistan’s investment regime, including poor coordination and collaboration between  the relevant regulatory bodies, the duplication 
of requisite permissions, and difficulties in enforcing contracts with local partners. 
 1. Could Pakistan please explain what steps ar e being taken to address each of these specific 
issues? 
 
Pakistan has succeeded in attracting impressive FDI flows over the past five years due to its investor 
friendly policies. There are however some governance related irritants which are being actively 
addressed through the second generation institutional reforms. Recently established regulatory bodies 
have adopted a corporate and pragmatic strategy  to address the concerns of investors and are 
providing robust and responsive services. Accordi ng to the Investment Policy, 2007 Board of 
Investment’s neither registration nor permission letter is  required for any kind of FDI. As far as the 
important issue of the enforcement of contracts is concerned, two major changes have recently taken 
place in the legal frame work for Foreign Direct Investment: (i) New York Convention or International Centre for Settlement of Investment  Disputes (ICSID) signed in 1966 has been ratified 
in 2005, (ii) Arbitration Rules, 1940 are under review by the Law Division, to provide a proper 
framework to resolve commercial disputes. Moreo ver, the Arbitration (International Investment 
Disputes) Ordinance, 2007 is under process for e nactment and will enable the determinations and 
awards of ICSID (International Centre for the Settle ment of Investment Disputes) to be implemented 
and enforced in Pakistan by making awards unde r the Convention binding on Pakistani courts, 
thereby providing for awards to be  registered in the High Court to be subsequently executed by the 
same. This would address the concerns of foreign investors regarding difficulties in seeking execution 
of awards and will sub sequently assist in in creasing investor confidence.  
 II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES (5) F
OREIGN INVESTMENT REGIME  
(i) Incentives 
 Para. 36, page 31 
  
The Secretariat Report indicates th at the government would like to enhance the role of special 
economic zones (SEZs) in attracting fo reign direct investment (FDI). 
 2. Could Pakistan please elaborate on the specifics  of its plan to use SEZs in order to attract 
FDI? WT/TPR/M/193/Add.1 
Page 72  
 
 SEZs provide a set of policy measures such as  tax exemptions, exemption from import duties and 
taxes, provision of utilities and facilitation in acquisiti on of land, not otherwise applicable in the rest 
of the country. Such facilities would help foreign companies install themselves with a relative ease 
among a cluster of industries with possible backward and forward linkages. 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs  Para. 20, page 41  
3. (a) Could Pakistan please explain its plan s for reducing the complexity of its tariff 
structure, in particular reducing the 15 specific rates of tariff, and generally 
simplifying the 14 ad valorem rates?   
Pakistan is following a simple tariff structure. Virt ually all tariffs (99.5%) are ad valorem.  Although 
there are 14 specific rates but these are restricted  to only 44 out of more than 6000 tariff lines, on 
items like edible oil, gold, bete l leaves, and caustic soda. Simila rly while there are 14 ad valorem 
rates, the general scheme of tariffs revolves around only 6 slabs including zero. The other slabs 
involve only few tariff lines mostly belonging  to Chapter 22 (wines and liquors) and Chapter 87 
(vehicles). These rates are, however, under constant  review and are likely to change in the coming 
years.  
 (b) Could Pakistan please further explain wh at it proposes to do to ensure the average 
MFN applied tariff rate continues to dec line, and does not rise again as it did in 
2006/2007? 
 
Since the introduction of tariff reforms, the tariff rat es have been continuously dropping.  The rise in 
tariff rates in year 2006-07 was an aberration and it is hoped that this will not recur.   
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs  
(c) MFN Tariff Bindings 
 Para. 21, page 42  
The Secretariat Report notes that Pakistan’s unb ound tariff items include, inter alia, agriculture 
products such as certain seeds, meat and meat pr oducts. The report further remarks that Pakistani 
authorities provided no comments concerning unbound agriculture items.  4. Could Pakistan please explain the reason or r easons for which it maintains unbound tariffs for 
certain agriculture products includi ng seeds, meat and meat products? 
 
Pakistan is considering binding the few remaining agriculture tariff lines under the Doha round of 
negotiations.  
  WT/TPR/M/193/Add.1 
 Page 73 
 
 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs  Para. 22, page 42 
 
5. Could Pakistan please comment on how it inte nds to reduce its bound tariff rates to more 
closely approximate its applied tariff rates?  
 
The bound rates are likely to be reduced to applie d rates if not below, as a result of Doha Round 
Negotiations. In more than 800 tariff lines relating to textiles and garments, there is no difference 
between the bound and applied rates.  
 III. TRADE POLICIES AND PRACTICES BY MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs 
 Para. 25, page 45 
 
Pakistan imposes "regulatory duties" in addition to  import tariffs on certain imports, and these have 
become less transparent recently. 
 
6. (a) Could Pakistan please explain how it in tends to make the use of these regulatory 
duties more transparent and open to public scrutiny?   
 
The regulatory duties on imports are levied rarely to  provide temporary relief to the domestic industry 
facing adverse competition from imports. At present only two items (sugar and wax paper) on imports 
are liable to regulatory duty levied to provide a level playing field to the local manufacturers. The 
regulatory duties are levied after detailed delib erations and are administered in a very transparent 
manner. Like all other policies of the Government regulatory duty is also open to public scrutiny. 
 
 (b) Could Pakistan please indicate when these regulatory duties will be phased out? 
 
All regulatory duties are levied for a certain period  of time. Any regulatory duty levied during the 
currency of a financial year stand rescinded on its expiry if not withdrawn earlier. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs  Para. 29, page 46  
 
The widespread use of import tariff concessions a nd exemptions reduces overall economic efficiency 
in Pakistan, and makes the Pakistani tariff system less transparent.   
 7. Could Pakistan please comment on how it intends  to make the use of import tariff concessions 
and exemptions more transparent, and to redu ce their use, to improve the Pakistani economy? 
 Pakistan applies its tariff concessions and exemptions in very transparent manner. The tariff structure 
and exemptions are approved by the Cabinet aft er having inputs from all the stakeholders and 
relevant Ministries and Chambers of Commerce. Th ese tariff concessions and exemptions give level 
playing field to local industry and pave way for furth er investment.  However, in  consultation with all WT/TPR/M/193/Add.1 
Page 74  
 
 the stakeholders, the government endeavours to  reduce these exemptions again in very transparent 
and consultative manner. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ix) Contingency measures 
 Para. 60, page 54 
 
Canada is a strong proponent of a fair and tran sparent, rules-based trade system which includes 
providing Parties with the opportunity for judicial review. The Secretariat Report indicates that 
Pakistan has terminated its Appellate Tribunal in 20 03 but plans to re-establish an Appellate Tribunal. 
 8. (a) Could Pakistan provide more informati on regarding when it plans to re-establish the 
Appellate Tribunal? 
 
Pakistan is in a legislative process to re-establish an Appellate Tribunal. It may however be mentioned 
that the interested parties in anti-dumping cases ha ve been filing appeals with the High Court and 
subsequently, the Supreme Court under writ jurisdicti on that has been provided in the Constitution of 
Pakistan (in the absence of an Appellate Tribunal). 
 (b) Could Pakistan also confirm that the Appellate Tribunal, once re-established, will 
hear appeals against anti-dumping and countervailing decisions?   
 
It is confirmed that the Appellate Tribunal, once re-established, shall hear appeals against 
antidumping and countervailing decisions by the investigating authority i.e. National Tariff 
Commission. 
 
(x) Standards and Other Technical Requirements (b) Sanitary and Phyto sanitary Regulations 
 Para. 66, page 56 
 The Secretariat Report states that "[i]mplementation of Pakistan’s sanitary and phytosanitary regime 
is reportedly complicated by the number of federal and provincial agencies involved (...)."  However, 
according to authorities, no provincial agency is involved in the implementation of such measures. 
 9. Could Pakistan please address this  inconsistency and provide clarification as to whether or not 
provincial agencies are involved in the im plementation of Paki stan’s SPS regime?  
 
The Government of Pakistan has set up a National Animal and Plant Health Inspection Service 
(NAPHIS), which deals with all issues related to SP S. One of the main functions of NAPHIS is to 
coordinate with Department of Plant Protection fo r plant health and Animal Quarantine Department 
for Animal Health etc. Implementation of Food Laws is within the domain of provincial and district 
governments. 
 A national Codex Committee has also been set up with representation from all provinces, subject 
specialists and other stake holders. Five sub-comm ittees for individual groups of items have been 
formed with representation from the provinces and speci alists in the field as well as public sector. 
 
The provincial agencies are very much a part of the decision making of various Codex Committees 
and these are involved at one stage or other in implementing SPS issues.  However import and export  WT/TPR/M/193/Add.1 
 Page 75 
 
 
 is a Federal Government subject, therefore the Federal Regulatory Agen cies oversee the quarantine 
and certification issues. 
 
Para. 66, page 56 
 The Secretariat report refers to a National SPS Task force which assists stakeholders to disseminate 
information and develop strategies to implement SPS policies.  10. Could Pakistan please indicate which federa l and/or provincial ministries or government 
bodies are involved in the National SPS Taskforce? 
 
At the federal level Ministry of Science and Tech nology, Health, Industries, Commerce; National 
Institute of Health, PARC (Pakistan Agricultu re Research Council), PCSIR (Pakistan Council for 
Scientific and Industrial Research) and other relevant intuitions are included in the SPS Task Force. 
Provincial Governments (Secretaries of the Agricultu re and Livestock) are also part of the task force. 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(v) Intellectual property rights  Para. 135, page 78 
 Canada notes that according to the Secretariat Repor t for Pakistan, "[t]he Government can reportedly 
grant public institutions, including the National B ook Foundation, royalty-free compulsory reprint 
rights where considered in the public interest, w ithout the holder’s authorization…[t]he authorities 
indicate that this provision has never been used".    
11. (a) Could Pakistan please provide furt her information describing under which 
circumstances such compulsory rights may be granted?  
 
Section 36(3) of the Copyright Ordinance permits  the Government to grant compulsory rights for 
copyrighted material upon an ap plication by any governmental or statutory body on a non-profit 
basis only. Circumstances that can le ad to grant of the compulsory li cense  include student agitations 
experienced in the seventies due to immense price hike of the text books on account of drastic 
devaluation of the Pakistani Rupee. In th e period under review, it has never been exercised.
 
 
 (b) Could Pakistan please indicate why it has chosen not to require payment of royalties 
to the rights owner under such circumstances?  
 
Article 31.b of the Agreement on TRIPs only requires national governments to try and obtain 
authorisation on reasonable terms for remuneration when  it decides to avail this provision. Since 
section 36(3) of the Copyright Ordinance permits the Government to grant compulsory rights on a 
non-profit basis, non commercial only, therefo re the issue of royalties does not arise.  
 
Para. 135, page 78 
 
The Secretariat Report indicates that, "[i]t is also claimed that trade mark protection is inadequate, 
since rights of prior use are not recognized in the Trademarks Registry.   However, the authorities 
indicate that the legislation provides "substantial" tr ade mark protection for prior use by merchants or 
manufacturers, and that these provisions have b een upheld by several judicial precedents." 
12. Could Pakistan please provide further informa tion on the protection for prior use provided by 
legislation?  Is there a procedure that a llows merchants or manufacturers to oppose the 
granting of a trade mark based on prior use, either before or after publication?   WT/TPR/M/193/Add.1 
Page 76  
 
 The Trade Mark legislation recognizes the right of prio r use as per the provisi ons of Section 17(4) of 
the Trade Marks Ordinance, 2001 read with Sections 28, 29, 30, 73, 80 and 96 ibid and Rules No. 30, 
68 and 69 which provide the procedure allowing merchants or manufacturers to oppose the grant of 
trade marks based on prior use before or after publication and get revoked or rectified after grant. 
The provisions of the law referred to above ca n be downloaded from IPO-Pakistan’s website 
(www.ipo.gov.pk).  
 Para. 138, page 79 
 
The Secretariat Report indicates that, "[s]ome see fi nes and criminal penalties, such as no mandatory 
minimum sentences in some areas, e.g. copyright, as an inadequate deterrent" and "[t]he IIPA has 
estimated that piracy rates remain high for records and music (100% in 2006, up from 83% in 2002), books, business software (up from 80% to 84%), entertainment software, and motion pictures." 
13. Canada appreciates Pa kistan’s efforts in IPR enforcement and would be grateful if Pakistan 
could provide further information about ho w fines and penalties related to copyright 
infringement are imposed. 
 
As far as the penalties relating to copyright infr ingement are concerned, th ese are imposed by the 
competent Criminal Courts as provided under Sec tion 66-73 of the Copyright legislation. The scales 
of penalties are as follows:  
a. Imprisonment upto 3 years. 
b. Fine upto Rupees one hundred thousand on fi rst offence, which can be doubled on repetition 
of offence, under Section 70B of the aforesaid legislation.  
 Besides, the contentions of the IIPA’s report do not hold good any more as there has been substantial 
improvement in our IPR enforcement due  to drive against piracy since 2005. 
 IV. TRADE POLICIES BY SECTOR (4) M
ANUFACTURING  
(ii) Food processing  
Para. 56, page 95  
The Secretariat Report notes that the "domestic oil extraction industry is protected by high specific 
tariffs on oils and seeds, equivalent to ad valorem  rates of 65-70%."  The Government Report, 
however, indicates that the maximum ta riff has been reduced to 25%.   
 
14. Could Pakistan please explain the apparent discrepancy and the measures to be taken to 
reduce the tariffs on oil and seeds to le vels in keeping with other sectors? 
 
Since the duty on edible oils is in specific terms (PKR 10,800 / ton) the incidence of tariff depends 
upon landed price of the edible oil.  The re is no such discrepancy in tariffs per-se.   
  WT/TPR/M/193/Add.1 
 Page 77 
 
 
 (5) S ERVICES  
(ii) Communications (a) Telecommunications  Paras 86 and 88, page 105 
 
The Secretariat notes that "liber al rules govern foreign investment in telecommunications: 100% 
foreign equity is allowed in all telecommunications  services (…)."  However, the Secretariat further 
notes that criteria for issuing a license include, among others, Pakistani ownership.  
15. Could the Government of Pakistan please clar ify what is meant by "Pakistani ownership?" 
 
The Pakistani ownership criterion as stated in the Secretariat report is not correct. The company 
should have a legal presence through incorporation in  Pakistan as can be seen in the cases of Ms. 
Telenor, China Mobile and Warid Telecom Pakistan. 
 
HONG KONG, CHINA
 
 
Contingency measures 
 
WT/TPR/S/193, p. 23, para. 11 
1. The Secretariat Report states that for continge ncy protection requests that are generally anti-
competitive and could "excessively" raise costs to  consumers or intermediate inputs users, 
the National Tariff Commission (NTC) would not apply its statutory guidelines in providing 
protection to the industry concerned.  It is fu rther mentioned that the statutory guidelines are 
based on industry need rather than economic e fficiency and they disregard effects of the 
protection on national welfare.  Does it mean that in not applying the guidelines, economic efficiency and national welfare effects will be taken into account by the NTC in such cases?  
Are there any separate guidelines to determin e whether the requests are generally anti-
competitive and could "excessively" raise costs to  consumers or intermediate inputs users?  
In this connection, will these stakeholders be  given opportunity before the NTC to express 
their views on the effects of the contingency protection on them? 
The NTC, while processing cases under Antidumping Duties Ordinance 2000, which is in conformity 
with the WTO’s Anti-Dumping Agreement, does prov ide opportunities to all stakeholders to express 
their views by inviting them to get themselves regis tered as interested parties and keep in touch at all 
stages of proceeding including participation in the he aring of the case. The determination is made on 
the basis of dumping calculations, i.e., norma l value and adjusted export price and taking into 
account various injury factors. The Pakistani antidumping law does not provide for basing the 
determination on national welfare effects, public interest or national economic efficiency. These 
factors are, however, considered during the proceedings under the NTC Act 1990. 
Investment 
 WT/TPR/S/193, p. 31, para. 35 
 
2. According to the Secretariat Report, there are still some limitations affecting investment.  We 
would like to know whether Pakistan has any plan  to remove such limitations, in particular, 
improvement in its arbitration/judicial pr ocedures for resolving commercial disputes. 
The investment regime in Pakistan is very open, libera l and the Government is continuously trying to 
improve it. For instance, the equity restriction in the insurance sector has been removed; and WT/TPR/M/193/Add.1 
Page 78  
 
 Pakistan has recently established a Foreign Investors Council as a Forum for Policy Dialogue on 
investment issues in Pakistan.   As far as the improvement in the arbitration and judicial procedures for resolving commercial 
disputes is concerned, on the 8
th of November 2006, Pakistan issued implementing legislation on the 
"ICSID Convention" on the Settlement of Investment Disputes between States and Nationals of Other 
States. Before this, the "New York Convention" also entered into force in Pa kistan on the 12 October 2005. 
Both these measures are major steps forward in demons trating Pakistan's commitment to transparency in the 
resolution of international investment disputes.  Finally, the Arbitration Act of Pakistan is also in the final 
stages of its review. 
 
Competition  WT/TPR/G/193, p. 14, paras. 61-62 
3.  We note from the Government Report that apart from enacting a new competition law and 
replacing the Monopoly Control Authority with the Competition Commission, independent 
regulatory bodies have been established to pr omote competition in specific markets (e.g. 
tourism, energy).  We would like to seek clarification on the relationship between these regulatory bodies and the Competition Commission.   Are these independent regulatory bodies 
performing a different or complementary role  to that of the Competition Commission? 
The function of the Competition Commission of Pakistan (CCP) is to keep a balance between rapid 
economic development and  consumer protection by providing measures against abuse of dominance, 
cartels and deceptive trade practices.  The sectoral  regulatory bodies have specific frameworks for 
development and regulation of that specific sector . Sector specific regulations are required for 
issuance of licenses etc while catering to safety, pollution, industrial relations, taxation, and other 
national policy objectives like providing services to disadvantaged sections of the population. 
  The CCP does not supersede or affect  the work of the sector regulators.  It essentially provides for the 
CCP to have jurisdiction and to fill the gap when ever the laws governing the sector regulatory 
agencies are silent. In addition, the new compe tition law confers on the CCP the ability to hold a 
public hearing on any matter affecting competition in any aspect of the economy and to give a non-
binding opinion as to who should do what in  order to support and promote competition. 
 Banking 
 
WT/TPR/S/193, p. 101, para. 74 
 
4. As reflected in the Secretariat Report, exis ting foreign banks and those formed under certain 
prescribed criteria are allowed to open up to 100 branches as per Branch Expansion Plans 
submitted and approved by the State Bank of Pakistan.  Would Pakistan clarify whether this 
branching permission is granted only for forei gn banks entering through branch mode, or for 
both foreign bank branches and wholly fore ign-owned locally incorporated banking 
subsidiaries?  While the maxi mum number of branches inscribed in Pakistan’s existing GATS 
schedule of specific commitments is much lower at only 25, would Pakistan consider raising 
the ceiling in its next offer so as to increase the legal certainty and predictability of its 
banking regime? 
 
The Branch Expansion Plan is applicable to both foreign and local banks. Pakistan is considering 
improvement in its offer with reference to ma ximum number of branches in its commitments under 
GATS. 
  WT/TPR/M/193/Add.1 
 Page 79 
 
 
 Insurance 
 WT/TPR/S/193, p. 103, para. 81 
 
5. We understand from the Secretariat Report th at fully foreign-owned life   and non-life 
insurance firms which are locally incorporated ar e permitted to operate in Pakistan.  However, 
as set out in its GATS schedule of specific comm itments, Pakistan’s commitments are limited 
to existing foreign insurance services providers only and those providing life insurance are subject to foreign shareholding ceilings. Would Pakistan confirm whether new fully foreign-
owned life and non-life insurance firms are currently allowed to enter its market?  
 
Fully foreign owned life and non- life Insurance companies are allowe d to enter the Pakistan market 
and are accorded the national treatment subject to a minimum paid up capital requirement.   
 
Transport services and logistics and related services 
 
WT/TPR/S/193, p. 108, para. 98 
6. We note from the Secretariat Report that the Paki stan Government has launched a national trade 
corridor initiative, aimed at revamping the w hole transport sector, including ports, roads, 
railways, and aviation.  We would be grateful for more details about the initiative, including the 
coverage, its latest progress, the expected  timeframe and results for the initiative. 
The programme is a road map on the steps to be taken, phase-wise, for im proving the transportation 
logistics chain, on the basis of the identified i nadequacies and weaknesses.  The NTCIP besides 
meeting domestic transportation requirements will also  provide transit facilitations to Central Asia, 
Western China, Afghanistan and Iran.  
One component of the programme deals with tr ade and transport facilitation, which aims at 
streamlining and integrating trade data exchange and offic ial controls in order to reduce transaction 
cost.  The Project will have a positive impact by subs tantially reducing international trade transaction 
costs. The programme will be impl emented in 5 years with donor assistance (World Bank, ADB etc) of 
US$ 6 billion. 
CHINESE TAIPEI
 
Secretariat report:  WT/TPR/S/193 
 
I. ECONOMIC ENVIRONMENT 
(3) M AIN MACROECONOMIC POLICY DEVELOPMENTS  
(i) Monetary and exchange rate policy 
Page 6, paragraph 11 
It is indicated in the report that the independence of the State Bank of Pakistan (SBP), the authority 
responsible for monetary and excha nge rate policies, has been strengthened during the review period 
and that the Ministry of Finance has "little or no influence" over these policies. However, the Minister 
of Finance still chairs the Monetary and Fiscal Po licy Coordination Board, which discusses Pakistan’s 
financial and fiscal stances.  
 
Q.1. On the assumption that financial issues, incl uding monetary and exchange rate policies, are 
addressed by the Fiscal Policy Coordination Board ch aired by the Minister of Finance, we are WT/TPR/M/193/Add.1 
Page 80  
 
 interested in knowing how the SBP manages to maintain its independence from the Ministry 
of Finance.  
 
For example: 
 a)  Does the Minister of Finance participate in and chair the Fiscal Policy Coordination Board in 
his/her own private capacity only, rather than on  behalf of his/her Ministry? 
b)  Is the Monetary and Fiscal Policy Coordi nation Board not an inter-agency body for making 
decisions on financial issues, but simply a consulting body for the SBP? 
 
The inception and implementation of monetary po licy and foreign exchange market oversight is 
conducted independently by State B ank of Pakistan.  Nevertheless, this policy stance is put up, for 
approval, to the Central Board of State Bank of Pakistan, which is attended by the Secretary of 
Finance of the Government of Pakistan as a member. 
 Monetary and Fiscal Policy Coordination Board (MFPCB), which is chaired by Federal Minister for Finance, provides a platform for coordination of fiscal and monetary – exchange rate policies between the Government and the State Bank of Pakistan.  It is important to highlight that MFPCB is 
not a body for formulating monetary policy. 
 
The role of MFPCB has been further clarified with  an amendment in SBP Act, 1956 in 2002, which 
states that "the Coordination Board shall not ta ke any measure that would adversely affect the 
authority of the State Bank of Pakistan as provided in the Act". 
 
(4) M
AIN STRUCTURAL POLICY DEVELOPMENTS  
(ii) Privatization  
Page 10, paragraph 25;  page 75, pa ragraph 128 ;  page 76, Table III.8  
 
Q.2. As stated, privatization is being revitalized as  a key element of Pakistan’s structural reforms, 
but the privatization programme seems to have  slipped behind schedule for various reasons. 
 
a)  Could Pakistan please advise what priorities, if  any, are listed in the privatization programme?  
 
 The government has made it very clear that it would like to withdraw from all commercial 
activities. The Privatisation Commission of Pakist an does not have a priority list as such of 
the sectors to be privatised but it does list the businesses to be privatised on its website 
www.privatisation.gov.pk.
 
 b)  Are there any limitations on foreign participati on in the privatization of  those priority-listed 
State-owned enterprises? 
 
There is no limit on foreign participation in the privatization of State Owned Enterprises. 
 
(7) T
RENDS AND PATTERNS IN FOREIGN INVESTMENT  
 Page 17, paragraph 40;  page 31, paragraph 35 
 UNCTAD classifies Pakistan as an" under performer" with "low FDI potential and performance". 
Furthermore, Pakistan’s latest rankings on the In ward FDI Performance Index and the Inward FDI 
Potential Index are below the average. Neverthele ss, the Pakistan authorities indicate that major 
investment limitations remain.  WT/TPR/M/193/Add.1 
 Page 81 
 
 
 Q.3. Could Pakistan please advise whether a plan  exists to effectively remove those major 
investment limitations as identified by the aut horities? If so, it would be appreciated if 
Pakistan could elaborate further on the details of such a plan. 
 
Pakistan has a very open, liberal, FDI friendly investment regime. A foreign investor does not require 
any government permissions. They are allowed full remittance of capital, profits, dividends and 
royalty. There is no limit on foreign equity. Many investments attract favourable import tariff rates 
and other fiscal incentives. As a result, the FDI flows  in fact have greatly increased over the past five 
years. However, to overc ome these obstacles the Government of Pakistan (GOP) has introduced 
measures that address the concerns of foreign in vestors and contribute positively towards increasing 
investor confidence. For example, an overwhelmin g proportion of changes to our domestic laws 
affecting foreign investment have been designed to  promote greater openness to FDI. The recent 
promulgation of the anti-money laundering ordinance and  steps such as the application of the code of 
corporate governance and the promotion of go od governance in general have addressed the 
grievances of foreign investors. 
In addition, the Foreign Investors Council (FIC) has been established as a forum for policy dialogue 
between the GOP and foreign investor’s community , which brings together the expertise and 
experience of top multinationals to project Pakist an as the preferred investment location in the 
region. Pakistan is still considered to be the b est place for business among major countries of South 
Asia.  
The establishment of Special Economic Zones (SEZs )  and Export Processing Zones provides specific 
incentives and facilities for investors.  In order to provide a proper framework to resolve commercial 
disputes, Pakistan has acceded to (i) New York C onvention, International Centre for Settlement of 
Investment Disputes (ICSID) and UNCITRAL. Domes tic legislation is now in place for the 
implementation of our obligations under these Treaties.  
The issues in economic governance in Pakistan are being addressed in Pakistan through second 
generation reforms. Regulatory bodies in different secto rs have been set up or m odernised to address 
the concerns of investors. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURES 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(x) Standards and other technical requirements 
(d) Marking, labelling and packaging 
Page 58, paragraph 72 
As indicated, imports failing to meet labelling and marking requirements are seized and destroyed by 
Customs. 
 
Q.4. In our view, the above-mentioned penalties app ear to be disproportionate to the seriousness of 
the violations. Failure to meet labelli ng and marking requirements may well not be 
accompanied by any health or safety concerns a nd very often can be easily corrected. Could 
Pakistan, therefore, please clarify whether any corrective actions are allowed for minor 
offenses concerning the labelling and marking requirements, short of the seizure and 
destruction of the products concerned? 
 
The goods are not seized or destroyed for minor offences. However, if the goods do not meet the 
required standards of shelf life, safety standards in conformity with international obligations then 
appropriate action is taken through the due process of  hearing and representati on by the importer or WT/TPR/M/193/Add.1 
Page 82  
 
 their agents. Destruction of goods is ordered only in  respect of those goods which are either injurious 
to human health and safety or  seriously endanger the public moral.
 
 
(3) M EASURES DIRECTLY AFFECTING EXPORTS  
(viii) Export promotion 
 
Page 67, paragraphs 102 & 103 
As indicated, two-thirds of the export or mark et promotion expenditure in 2005/06 was spent on 
"grants, subsidies and write off of loans" unde r the Export Development Fund (EDF). The EDF’s 
programmes are implemented by various governme nt agencies, including the Trade Development 
Authority of Pakistan (TDA), whose main role is  market promotion, as well as private sector and 
business support bodies, e.g. chambers and trade associations. 
 
Q.5. Could Pakistan please provide furt her information on the following aspects: 
 
a) How the EDF’s budget amount is raised and what shares of the fund are  allocated 
respectively to the TDA and to vari ous chambers and trade associations? 
 
The budget amount is raised through export deve lopment fund levied as percentage charge on 
exports.  EDF funds are not allocated to TDAP, no r to the chambers and trade associations. Instead, 
TDAP brings specific export promotion schemes before the EDF Board and seeks funding for their 
implementation. 
b) Whether the TDA offers subsidies to Paki stani participants in trade delegations and 
exhibitions. If so, how does this operate? 
 
TDAP offers subsidies to Pakistani participants in trade delegations and exhibitions. Such delegations 
and exhibitions are advertised through the media and applications are invited. According to pre-
determined selection criteria, exporters are select ed and approved for participation. Their air travel 
is subsidized up to 50% of the cost and are allowed US$ 100 per diem for the duration of the delegation visits. In the case of exhibitions, si milarly advertised, TDAP collects participation fees 
from the selected exhibitors at subsidized rates. Women entrepreneurs, participating in delegations 
and exhibitions, are provided higher subsidy at 75 % of airfare and 50% of the normal participation 
fees. 
c)  Would the TDA offer assistance to a forei gn business that wishes to gain  access to the 
Pakistani market? If so, what type of assistance would be provided? 
 
TDAP primarily deals with export promotion and it offers assistance to foreign businesses who wish 
to enter Pakistan in order to enhance exports from  Pakistan. However if a foreign business intends to 
form a joint venture or invest in Pakistan then the dealing body would be Board of Investment 
Pakistan. 
 d)  Would the TDA provide assistance to a fo reign company which intends to establish a 
strategic alliance with a Pakistani company in fields like marketing channels, brand 
cooperation or share holding? If so, what type of assistance would be provided? 
 
If a foreign company puts up an export led industry/ activity in Pakistan, TDAP assists them in 
marketing their goods abroad like the national companies.  
  WT/TPR/M/193/Add.1 
 Page 83 
 
 
 IV. TRADE POLICIES BY SECTOR 
(3) M INING AND ENERGY  
(ii) Energy 
 
Page 90, paragraphs 38 & 39  
Q.6 
a) Since March, 2006, the Oil and Gas Regulatory  Authority (OGRA) has  been responsible for 
regulating the midstream and downstream petroleu m industry. The Ministry of Petroleum and 
Natural Resources is in charge of regula ting the upstream oil and gas activities. 
As we know, the petroleum industry’s distributi on system and supply chain comprises a large number 
of businesses and it is necessary for all participants to op erate together very clo sely in order to make 
the industry as a whole sustainable. We are therefo re interested in whether any special coordinating 
mechanism has been established between the aforementioned two authorities to ensure the 
consistency of energy policies, and, if so, how this mechanism works?  
The coordination mechanism between the Ministry  of Petroleum and Natural Resources and the 
OGRA emanates from the OGRA Ordinance 2002 according to which:  
- OGRA, being oil and gas regulatory authority, is administratively placed under the Cabinet 
Division for interaction with the Federal Government; and  
- Ministry of Petroleum and Natural Resources issues the sectoral policies after obtaining 
approval from the ECC/Cabinet pursuant to the OGRA Ordiance 2002. 
 
b) Minimum Pakistani equity limits apply for ons hore oil exploration zones  and, if unmet, the 
Government Holdings (PvT) Ltd may acquire the minimum interest.  
Could Pakistan please provide us with details of the domestic equity limits? Furthermore, if a 
timetable exists for the loosening or removal of tho se limits, we should be grateful for details of this 
as well. 
The policy provides that in the case of a join t venture with a foreign E&P company, local E&P 
companies, including GHPL, shall have working interest of 15% in Zone-I, 20% in Zone-II and 25% 
in Zone-III on full a participation basis. 
 c) Firms must meet minimum employment require ments, training, and welfare expenditures, and 
special arrangements apply to exploration in offshore areas. 
Could Pakistan please provide details of these above -mentioned ‘special  arrangments’? Are they 
applied equally to local and foreign enterprises?  If not, could we please be informed of the additional 
requirements applying to foreign investors? 
All the operators (local and foreign) are required to  employ Pakistan nationals in their companies.  
The companies are required to train government offic ials as well as their employees. The company 
shall also spend certain amount of money for welfare of local employees of the companies.    WT/TPR/M/193/Add.1 
Page 84  
 
 (5) S
ERVICES  
(ii) Communications (a) Telecommunications – Anti-competitive rules 
 
Page 107, paragraph 95  
As indicated in the report, the Pakistan Tel ecommunications Authority’s (PTA) frameworks for 
mergers/acquisitions and for prohibiting anti-compe titive conduct are being prepared, and it is in the 
process of announcing anti-competitive regulations. 
Q.7. Could Pakistan please advise when it expect s the PTA’s frameworks for mergers/acquisitions 
and prohibiting anti-competitive conduct to be  established? We would also appreciate 
receiving details of the timeline to the a nnouncement of anti-competitive regulations.  
The Government of Pakistan plans to finalize the fr amework for anti-competitive behaviour by the end 
of 2008. 
AUSTRALIA
 
II. TRADE POLICY REGIME 
(4) T RADE AGREEMENTS AND ARRANGEMENTS  
(i) WTO 
 
Q.1. Australia notes from the Secretariat’s re port (WT/TPR/S/193, page 25, paragraph 16 and 
Table II.3) that Pakistan has made no notifications under the Agreement on Agriculture since 2001 
(when it submitted notifications for domestic support and export subsidy commitments for the 
marketing years 1999-2000 and 2000-2001).  Can Pa kistan explain why it has made no subsequent 
notifications and advise when it will be ab le to submit its overdue notifications? 
 
Pakistan has submitted the notifications for Dome stic Support for the years  2000-2001 to 2006-2007 
under the document number G/AG/N/PAK/10 dated 9 Jan 2008.  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs 
 Q.2. Australia notes that since the last review, Paki stan has unilaterally bound much of its tariff in 
the WTO (WT/TPR/S/193, page 42, paragraph 22), with its proportion of bound tariff lines rising 
from 36.6% to 98%.  We note, however, that the bound rates are, on average,  four times higher than 
the applied rates, 61% vs 15%.  Can Pakistan a dvise on what basis it established the far higher bound 
rates now entered into its bound tariff schedule? 
 
As rightly noted by Australia, Pakistan bound only 36 % of its tariffs during the Uruguay Round. To 
bring transparency and predictability Pakistan deci ded to increase its binding coverage beyond 98%. 
As a first step these tariffs were bound at a higher level to provide policy space for any future 
adjustment. This was also required to provide comf orts to the stakeholders that GOP had a sufficient 
cushion for upward revision if needed. The bound rates are likely to be reduced to applied rates, if not 
below, as a result of Doha Round Negotiations. It  may however be noted that for more than 800 tariff 
lines relating to textiles and garments, the tariffs are bound at applied levels. 
  WT/TPR/M/193/Add.1 
 Page 85 
 
 
 IV. TRADE POLICIES BY SECTOR 
(2) A GRICULTURE , LIVESTOCK , FORESTRY , AND FISHERIES  
(ii) Policy framewor k and developments 
(c) Domestic support measures 
 3. The Secretariat report notes that rural pove rty remains high and agricultural productivity is 
low (WT/TPR/S/193, page 80, paragraph 2), suggesting there is room for further reform in Pakistan’s 
agriculture sector.  The report by the Secretariat further notes that domestic wheat prices have been on 
average 20 per cent below import parity in recent years, suggesting that market price support arrangements are penalising wheat farmers (WT/TPR/S /193, page 84, paragraph 18). The report also 
notes that market price support arrangements penalise rice and cotton farmers. In the interest of 
allowing producers to benefit from higher global commodity prices, does the Pakistan government 
conduct regular reviews of the level of price suppor t, and has it considered phasing out price support? 
 
Pakistan has already phased out its price support system for rice, sugarcane, cotton. Price support 
for wheat is mainly for price stabilization. Th e government reviews the prices of wheat annually.  
 The global prices of agriculture commodities in ge neral and of cereals and cotton in particular have 
risen sharply during the recent years. Therefore, im port parity prices of these commodities have also 
increased.  
Government has designed special programs (Cro p Maximization Program) for small farmers to 
improve productivity. Other short and medium term  programs are being implemented for value 
addition and minimization of post harvest losses as well. 
 
(5) S
ERVICES  
 
4. Cross-border trade in services is growing very rapidly, and both deve loped and developing 
country members of the WTO have become dynamic exporters.  Pakistan is yet to make any commitments on cross-border (Mode 1) supply (W T/TPR/S/193, page 99, paragraph 68).  Noting 
developments in the internet and communication technologies generally, Australia is particularly 
interested in the situation with regard to the professional services sectors.  Does Pakistan have any 
current regulatory barriers to cross-border suppl y, and is Pakistan willing to make Mode 1 
commitments, particularly in the professional services sectors?  
As regards regulatory barriers to cross border supply of services such measures are confined 
to raising consumer awareness and facilitation in using this mode in a secure manner. 'The Electronic 
Transactions Ordinance', was promulgated in 2002 to  provide for the recognition and facilitation of 
documents, records, information, communications and transactions in electronic form, accreditation 
of certification service providers, and for matters  connected therewith and ancillary thereto. In 
Education sector for purposes of consumer protec tion the Higher Education Commission has issued a 
list of international institutions that are recogni zed for purposes of Mode 1 services supply in this 
sector. This list is periodically reviewed. 
 
The government is considering making commitmen ts on Mode 1 including in the remaining 
Professional services sectors in the revised offer.  
 It is also clarified that Pakistan is a co-sponsor of the Plurilateral request on cross border supply of 
services and in its initial offer substantial comm itments have been offered in Mode 1. Such 
commitments have been offered in business services; in four sub sectors of computer related services; 
R&D services in social sciences and humanities; R&D services in natural sciences; Inter disciplinary 
R&D services and Agriculture storage. It has also o ffered commitments in this mode of supply in 
Courier services, in sub-sectors of Telecom services, Construction and engineering services, Construction work for Civil Engineering, Educa tion services and Tourism and Travel related services  
 WT/TPR/M/193/Add.1 
Page 86  
 
 REPUBLIC OF KOREA
 
 
I. TRADE POLICIES AND PRACTICES BY MEASURE 
 
Customs clearance procedure 
 WT/TPR/S/193, p. 47, para. 33 
 
Q.1. The Pakistani customs authority uses refere nce import prices to investigate allegations of 
fraudulent under-invoicing for targeted products, which vary by country. In the case that the 
customs authority determines the declared value of an item to be significantly lower than its 
actual value based on import prices registered in  the database, adjusted duties are then applied 
at the discretion of the authority. This discre tionary import price adjustment more often than 
not results in friction between the authorit y and importers as well as delays in customs 
clearance.  Please elaborate plans the Pakistan i Government have to enhance transparency 
regarding customs declarations made by impor ters and to alleviate delays in customs 
clearance.  
 
The Customs declarations made by importers are in  a format which is in  conformity with the 
international format of goods declaration according to WCO guidelines.  The automated customs 
clearance system matches the description of goods in  the carrier declaration which are reflected on 
the good declaration which is electronically file d and goods are cleared on the basis of risk 
management criteria. A small percentage of goods  are subjected to exami nation. The delays in 
customs clearance are stories of the past and now the customs clearance of most of the consignments 
is done very quickly. The clearance time under PaCCS has been reduced from 7-10 days to less than 
few hours. 
 
Government procurement 
 
WT/TPR/S/193, pp. 52-53, paras 52-54 
 
Q.2. Certain competitive bidding practices in Paki stan are not in compliance with international 
standards. For example, although the lowest bidder passes a technological assessment, a few 
market leading companies are given a sec ond chance to improve their initial bids. 
Furthermore, the selection of certain vendees is often motivated by non-economic factors. 
Although Pakistan is not a signatory to the WTO Agreement on Government Procurement, all 
government procurement procedures need to be conducted in a fair and transparent manner, 
based on international practices aimed at improving transparency and enhancing 
accountability.  Please elaborate plans the Pakistani Government have in order to implement a 
fair and transparent government procurement bidding system. 
The Public Procurement Rules a re fair, transparent and based upon international best practices to 
achieve transparency and accountability. These includes the following : 
 
a. Limitation on negotiations – Rule 40:
  There shall be no negotiations with the bidder having 
submitted the lowest evaluated bid or with any other bidder. 
b. Principal method of procurement – Rule 20:   The procuring agencies shall use open 
competitive bidding as the principal method of procurement for the pr ocurement of goods, 
services and works. 
c. Clarification of bids – Rule 31:    No bidder shall be allowed to alter or modify his bid after 
the bids have been opened. However, th e procuring agency may seek and accept 
clarifications to the bid that do not change the substance of the bid.   WT/TPR/M/193/Add.1 
 Page 87 
 
 
 d. Hence, a fair and transparent government proc urement in bidding system is in place in 
Pakistan and is being followed by all the proc uring agencies at the federal level as defined 
under the governing law i.e. Public Procurement Regulatory Authority Ordinance, 2002. 
 
Intellectual property rights  
WT/TPR/S/193, pp.78-79, paras 137-138 
 Q.3. Recently the distribution of pirated products has become widespread in Pakistan with the 
weakening of IPR enforcement by the FIA (F ederal Investigation Agency). Trademark 
infringements such as pirated mobile phones are also prevalent. Please elaborate plans the 
Pakistani Government have in order to enhance IPR protection. 
 
Enforcement laws and institutions make an important  part of IPR management. The government has 
approved many measures to bolster the ongoing enforcement efforts and to create a hard-core 
professional group to deal with the IPR violations all over the country. ‘All Pakistan Audio / Video Traders Welfare Association’, a vendors association has also started self regulating themselves in 
cooperation with IPO Pakistan. 
Federal Investigation Agency (FIA ) has been mandated with th e enforcement actions under the 
Copyright Ordinance, 1962 in April 2005.  The Agency has been cracking down on unauthorized manufacturing units of CDs/DVDs and has regis tered cases against them. Pakistan Customs has 
dried up export of pirated stuff from Pakistan, as confirmed by International Federation of 
Phonographic Industry (IFPI). 
The FIA has institutionalized close-liaisons, coordination, and police-cooperation with the 
stakeholders in and outside the country, for inst ance IPO- Pakistan, World Intellectual Property 
Organization, International Federation of Pho nographic Industry and related organizations.  
 
FIA is also investing in the capacity building programs and along with other agencies is also 
undertaking awareness campaigns. With the help of  modern investigative techniques, tools and 
prosecutorial skills, it is expected  that the enforcement of IPR laws would further improve in the 
coming days. 
II. TRADE POLICIES BY SECTOR 
 
WT/TPR/S/193, p. 104~107 
 
Services:  Telecommunications 
 
Q.4. Several value-added telecommunication services, such as voice mail, electronic data 
interchange, Code and pr otocol conversion, have not been  included in the WTO commitments 
on services. Please indicate whether Pakistani Government has any plan to make further 
commitments on value-added telecommunication services.  
 Yes the Government of Pakistan has plans to make further commitments on value added 
telecommunication services. 
 WT/TPR/M/193/Add.1 
Page 88  
 
 CHILE
 
 
From the Report by the Secreta riat (Document WT/TPR/S/193) 
 
TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
Trade agreements and arrangements 
(ii) Regional and other preferential arrangements (c) Bilateral arrangements  Page 29, paragraph 27 
 Question 1:  Please provide further detail on the cont ent and scope of the FTA between Pakistan and 
MERCOSUR.  The Report states that negotiations are to commence in 2007.  Have they begun yet? 
 
Pakistan has signed the Framework Agreement with MERCOSUR. The negotiations on Pak-
MERCOSUR FTA are yet to commence. Consultations are in progress for initiating the first round of 
negotiations.  
TRADE POLICIES AND PRACTICES BY MEASURE 
(1) Introduction  
Page 37, paragraph 6 
 
Question 2:  According to the Report, some state entities have exclusive import rights on certain raw 
materials.  What are these state entities, and what raw materials are involved?  Response shall soon be provided. 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(ii) Production assistance  
Page 36, paragraph 5 and page 74, paragraph 125 
 
Question 3:  What, exactly, are these development boa rds?  Who are they composed of, how many are 
there, and how do they benefit from the import duties?  Development Boards work like autonomous bodies to a ssist various Ministries in service delivery 
through simplified procedures and accelerated wo rk schedules. These boards are governed and 
managed by independent professional s / experts and merely supervised by the public sector. These 
include EDB (Engineering Development Board), AEDB (Alternative Energy Development Board), PHDEB (Pakistan Horticulture Development and Export Board) and PODB (Pakistan Oilseed 
Development Board). 
 
Out of all these, it is only the PODB that is financed  by import cess of Rs. 0.05 per kg of edible oil and 
a cess at 10% of the regulatory duty collected on oilseed imported for crushing purposes. Working 
under administrative control of Ministry of Food,  Agriculture and Livestock, the PODB is mandated 
to enhance indigenous oilseed production to reduce import bill of edible oils. It aims at promoting the 
oilseed sector as a whole and serving as a national institution for the development of oilseed sector, 
besides providing regulatory and policy framework to this sector. 
  WT/TPR/M/193/Add.1 
 Page 89 
 
 
 TRADE POLICIES BY SECTOR 
 V. S
ERVICES  
(iii) Air transportation 
 
Page 109, paragraphs 101 and 102  
Question 4:  Without prejudice to its "open skies"  policy, under what conditions would Pakistan be 
prepared to liberalize cabotage for foreign ope rators without any proprietary equity limits? 
 
Pakistan  does not permit cabotage. 
 CHILE – REPLIES FOR THE REMANING QUESTIONS
 
 
Question: According to the Report, some state entities have exclusive import rights on certain   raw material. What are these state entitie s, and what raw materials are involved?  
 
The Import Policy Order does not provide for any ex clusive import rights of certain raw material to 
state entities. However, the Federal Government has  granted concessionary tariffs to some state 
entities on import of certain products vide  SRO 507 (1)/2007 dated 9th June 2007. 
 
ARGENTINA
 
 III. TRADE POLICIES AND PRACTICES BY MEASURE (1) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Registration and documentation requirements 
Paragraph 10, page 38 
Q.1. The Secretariat Report states in paragra ph 10, page 38, that Pakistan introduced in 
February 2002 the Pakistan Customs Computerized System (PACCS). Its full roll-out, initially planned for June 2007, h as slipped. Could Pakistan info rm how long will it take to 
complete the full implementation of this system ? What are the steps n eeded and the average 
time in order to clear goods in those ports that have not yet implemented the PACCS?   
Those ports which have yet to be equipped with  PaCCS are governed by another automated system 
under the name of One-Customs. This system is si milar to PaCCS and the cu stoms clearance time in 
this system has also come down.  The goods decl arations are fed electronically and these are selected 
on risk management criteria for examination or otherw ise. The dwell time in this system is about six 
days. However, GOP is in process of replicating PaCCS to all the ports and by December, 2009 all 
the ports will be equipped with the PaCCS.  v) Import prohibitions, quotas, restrictions, and licensing 
Paragraph 46, page 51 
Q.2. The Secretariat Report states that imports  of certain goods eligible for tariff 
exemptions/concessions require ministerial or other approval. For example, the Ministry of Food, Agriculture and Livestock must certify duty-free imports of wheat flour. Could Pakistan indicate what the requirements to obtain such tariff exemptions/concessions are? 
What are the criteria used to gran t such tariff exemptions/concessions?  
 WT/TPR/M/193/Add.1 
Page 90  
 
 The tariff exemptions/concessions are rare and based on market requirements. Moreover, some of the 
exemptions or concessions are only meant for improvem ent in social sectors such as health, education 
and food security etc.  (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(v) Intellectual Property Rights (IPR) 
 Paragraphs 134 and 137, pages 77 and 78  
Q.3. The Secretariat Report in paragraphs 134 and 137 mentioned different measures taken by 
Pakistan to strengthen intellectual property prot ection, in particular enforcement. How does 
Pakistan assess its experience in that regard ? Could Pakistan explain in more detail the 
interaction among the relevant agencies to boost enforcement and reduce piracy? 
 
Firstly, IPO Pakistan (Intellectual Property Organiza tion) has been made the central body dealing 
with all aspects of IPR’s including legislation,  monitoring and enforcement. Secondly, the Federal 
Investigation Agency (FIA) which is an elite force of the Federal Go vernment for the investigation 
and prosecution of white collar crimes was empow ered to interdict piracy. For this purpose, 
necessary legislative changes were put in place. Th ird, Pakistan Customs’ law and administration 
were made more effective against piracy and counterf eiting. Fourth, An effective public-private 
partnership structure has been introduced in the governance stru cture of IPO-Pakistan which 
includes among others, the Planning Commission; Ministry of Law, Justice and Human Rights; 
Ministry of Interior ; Ministry of Commerce ; Ministry of Industries, Production and Special Initiatives ; Ministry of Health ; American Bu siness Council; Overseas Investors Chamber of 
Commerce and Industry ; Federation of Pakistan Chambers of Commerce and Industry; Oxford 
University Press ; and pharmaceutical sector (both na tional and multi-national corporations). This 
has ensured a far better representation of interests of  various stakeholders for driving IP policies and 
enforcement strategy more efficiently  and effectively. Finally, a near ten-fold increase has been made 
in the public funding provided to upgrade the IP infrastructure in Pakistan  Paragraph 136, page 78  
Q.4. The Secretariat Report states that in 2006, 247 patents were granted. Could Pakistan inform 
what the sectors in which those patents were granted are? 
 
Sector wise break up of the patents granted during the year 2006 is as follows: 
Pharmaceuticals 125 
Human necessities 65 
Mechanical engineering 38 
IT and Telecommunication 10 
Textile engineering 5 
Plants 4 
Totalé 247 
  WT/TPR/M/193/Add.1 
 Page 91 
 
 
 UNITED STATES  
 
WT/TPR/S/193 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) I NTRODUCTION  
 Page 36, paragraph 3 
 Q.1. The Secretariat report indicates that the use of minimum values in Pakistan no longer exists. 
When did Pakistan eliminate the use of minimum values? 
 
In general, Pakistan Customs accepts transaction va lue. However, where the values are mis-declared 
through fake or double invoices and cannot be termed as  true transaction value, such declared values 
are not accepted. This is fully in line with the pr ovisions of Article VII of  GATT Valuation Agreement. 
A glaring is the price of copper products (e.g bra ss) where sometime the declared price is far less 
than price of its constituents, for which prices ar e listed on London Metal Exchange (LME). Similarly 
sometimes the declared value of steel  sheets is even less than price of metal contents in it. Thus it is 
evident that such invoice prices are fake and do no t fall within purview of transaction values. In such 
cases where the importer fails to subs tantiate the accuracy of  the invoiced price, the customs value is 
then determined by applying other methods in a ccordance with the Agreemen t on Customs Valuation. 
 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs 
(f) Regulatory duties 
 
Page 45, paragraph 25  
 
Q.2. The Secretariat’s report notes that Pakistan is  phasing out "regulatory duties," but some still 
remain.  When will they all be eliminated? Do  we understand correctly that there is no public 
list of products affected by these duties and their corresponding rates?  Also, the report 
mentions that "the removal in 2005/06 of the legislative requirement for these duties to be 
imposed subject to NTC recommendations was aime d at providing greater flexibility in using 
them; however, it has reduced their transpar ency and public scrutiny." Please define 
"regulatory duties" and explain how Pakistan applies and administers these "duties" in a manner consistent with Pa kistan’s WTO obligations? 
 
Regulatory Duty is an additional customs duty levi able under the Customs Ac t to assist the local 
industry against cheaper imports and with a view to ensuring availability of that raw material or 
product to local industry or to local consumers. Each  case is deliberated by th e federal cabinet before 
the levy of any such duties. These duties are levied in a transparen t manner and are published before 
they are collected. These duties are time bound an d stand rescinded at the expiry of each financial 
year if not withdrawn earlier. Through a recent legi slation it has been provided that the cumulative 
incidence of regulatory and customs duty cannot be more than Pakistan’s bound rates at WTO. Therefore, the regulatory duty is not contra ry to Pakistan’s obligations to the WTO. 
 (iii) Customs Valuation, minimum impo rt prices and pre-shipment inspection 
 
Page 47-48, paragraph 33 
 
Q.3. The Secretariat reports that the use of "transaction values applies to only some 90-95% of 
imports and is used unevenly on food and consumer goods."  Please explain Pakistan’s 
customs valuation procedures regarding imports  of food products.  Please explain how WT/TPR/M/193/Add.1 
Page 92  
 
 Pakistan uses the 2006 "take over" legislation in a manner consistent with the WTO Customs 
Valuation Agreement? 
 
The takeover legislation has only been used once. It  is only meant to apply when an importer fails to 
demonstrate that the invoice price is the trans actional price and the head of regional customs 
(Collector) is satisfied that the importer has failed to  substantiate its declared price. The importer is 
given sufficient opportunity and a first option to clea r the good on a value determined by the customs 
authorities in accordance with the principles of Custom Valuation. This provision is intended to check the cases of tax fraud. 
 
(iv) Other levies, charges, and taxes 
(b) Other  Page 49, Paragraph 38 
 Q.4. The 2007/08 budget recently changed Pakistan’s Customs Act to allow fees and charges to be 
levied on imports for services (examination, sca nning, and inspection).  According to the 
Secretariat, the legislation does not specify that these fees are to be levied on a cost recovery 
basis.  What steps is Pakistan taking to ensu re that these fees remain consistent with GATT 
Article VIII? 
 Pakistan Customs is extending the scanning facility to  its imported as well as  exported goods with a 
view to plug revenue leakage and ensure the security of the supply chain. The provision was added in 
the customs statute to collect a nominal fee for su ch services and the amount collected would be used 
on maintenance of such facilities. However, the provision is there in  the statute but the government 
has not yet decided whether to levy a fee for such services. Therefore, this fee is currently not in 
operation.  Pakistan is committed that these fees as  and when levied will remain consistent with 
Article VIII of GATT. 
 
(v) Import prohibitions, quotas, restrictions, and licensing 
(b) Restrictions and licensing  
Page 51, Paragraphs 45-48  
Q.5. The Secretariat’s report describes measures that  seem to resemble an import-licensing regime.  
But Pakistan maintains that it does not operate an import-licensing regime.  Please explain how Pakistan administers the quantitative restric tions outlined in paragraph 48 if not through 
import licensing procedures?  Also, please describe the administrative procedures necessary 
to benefit from the tariff exemptions /concessions outlined in paragraph 46? 
 
The quantitative restrictions on imports are very few and these are monitored by customs. A complete 
record of annual eligibility and imports is mainta ined. When the quota is exhausted, no further 
clearance is allowed. This was pr acticed for refrigerated vehicles (o ld & used) in 2006-2007, and for 
CFCs (ozone depleting substances) for the refrigeration industry. 
There is no separate procedure for availing the ta riff exemption. The importer has to declare his 
intentions for availing exemption by depicting rel evant legal instrument on the Goods Declaration 
(GD) and fulfilling the conditions(if any) prescribed  by the legal instrument granting tariff 
concessions and or exemptions.  WT/TPR/M/193/Add.1 
 Page 93 
 
 
 (vii) Government procurement 
 
Page 53 
 
Q.6. According to paragraph 53, "direct tendering is allowed when no advantage is envisaged from 
competitive bidding."  Who makes the determination that "no advantage is envisaged from 
competitive bidding"?   Is that decision reviewable by an impartial authority?    
 
When they meet the domestic value added content requirement, there is no differentiation between a 
domestic and a foreign supplier. 
 
With regard to paragraph 54 
 
- When bidding is limited to national bidders, is that restriction included in the notice of the 
procurement?  If not, where is it provided? 
 
When bidding is limited only to national bidders, it is included in the notice of procurement and or 
tender documents. 
 
- With regard to the statement that: "Procuri ng agencies must provide domestic (including 
foreign) suppliers price preferences where th is is government policy," please describe the 
circumstances under which foreign suppliers ar e given price preferences.  Are foreign 
suppliers given the price preference when th ey meet the domestic value added content 
requirements? 
 
Procuring agencies are allowed to follow the po licy of the government regarding price preference 
which at present is being governed through an SRO of the Ministry of Commerce, Government of 
Pakistan, bearing No. 827(I) available on the website of the PPRA.  
- Is there any impartial authority in Pakistan to  which suppliers may take complaints regarding 
the conduct of procurements?  
 
In Pakistan, if there is any complaint regarding conduct of procurement, the remedies include a 
committee within the procuring department, cour t of law and if the dispute arises after the 
procurement contract comes into force, arbitrati on is available as a method to settle disputes. 
However, a method of arbitration is required in th e procurement contracts, in conformity with the 
laws of Pakistan. 
 
(ix) Contingency measures 
Page 54, paragraph 60 
Q.7. The Report indicates that Pakistan has taken no countervailing or safegua rd actions, but that it 
notified countervailing duty regulations in Oc tober 2002 (G/SCM/N/1/PAK/2/Suppl.1).  Has 
Pakistan’s countervailing duty regime undergone changes since that time?  
Pakistan has not made any legislative change in  Subsidies and Countervailing Measures Ordinance, 
2001 since the last review. 
b) Government is considering cons tituting an Appellate Tribunal. 
c) National Tariff Commission (NTC) has not taken so far any countervailing measure. WT/TPR/M/193/Add.1 
Page 94  
 
 The sunset review of an anti-dumping duty on tinplates from South Africa is in hand and being 
processed under the Anti-Dumping Duties Ordinance, 2000. 
(x) Standards and other technical requirements 
(b) Sanitary and phytosanitary regulations 
Page 56, paragraphs 66-67 
Q.8. Please identify the activities that Pakistan’s National SPS Taskforce has undertaken to ensure 
provincial level implementation of SPS policies.   What is the status of Pakistan’s 
governmental review of its SPS legislation?  What is the timetable for this review?  
The SPS Task Force is having several stakeholders mee tings. Provincial Governments are involved in 
all these meetings and they have been a sked to develop their own action plans. 
A core group has also been jointly constituted by the Ministry of Commerce and the Ministry of Food, 
Agriculture and Livestock to work on a fast track fo r a cohesive SPS management system. NAPHIS 
(National Animal and Plant Health Inspection Servi ces) is currently reviewing legislation to update. 
The Marine and Fisheries Department has already updated it and included all rules and regulations as per international requirements.  It is per tinent to point out that Competitiveness Support Fund, 
under the USAID, will also help us in carrying out some of the detailed management studies of the 
Departments. NAPHIS is working closely with them on these issues.  
Current status regarding review and revision of Federa l legislations relating to SPS is as under: 
S. 
No. Name of Law Name of Administering Department Present Status 
1. The Pakistan Plant Quarantine Act, 
1976 Working with the FAO consultant  
 The Agricultural Pesticides Ordinance, 
1971 Department of Plant Protection 
Proposed amendments are submitted for 
the approval of the Cabinet. 
2. The Seed Act, 1976 Fede ral Seed Certification and 
Registration Department Bill is pending for introduction in the 
National Assembly.  
3. The Pakistan Animal Quarantine 
(Import and Export of Animal and 
Animal Products) Ordinance, 1979 Animal Quarantine Department Department is reviewing the law and 
finalizing amendments which will be 
shortly be submitted to Ministry for further process. 
4 The Pakistan Fish Inspection and 
Quality Control Act, 1997 All EU requirements have been 
incorporated in the regulations.  
 The Exclusive Fishery Zone (Regulation 
of Fishing) Act, 1975 Marine Fisheries Department 
Law is being reviewed for proposing 
amendments. 
5 The Agricultural Produce (Grading and 
Marking) Act, 1937 Department of Agriculture and 
Livestock Products Marketing and 
Grading Reviewing law for appropriate 
amendments. 
6. No law National Veterinary Laboratory Not applicable 
7. No law Grain Quality Testing Laboratory Not applicable 
(d) Marking, labeling, and packaging  
 Page 58, paragraph 72 
 Q.9. The Report states that "Imports failing to meet labeling and marking requirements are seized 
and destroyed by Customs."  Please explain wh y Pakistan believes it necessary to destroy 
such imports.  Has Pakistan considered return ing the goods to the exporter to allow for their 
sale in another market, where the goods meet the labeling requirements? 
 Only those imported goods whic h are not fit for human consumpti on or which are against public 
morals are seized, confiscated and destroyed after following the due pr ocess of law (including right of  WT/TPR/M/193/Add.1 
 Page 95 
 
 
 appeal). Where the exporter of goods is willing to receive them back, permission is granted on a case 
by case basis to re-export the goods. 
 
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
 
Pages 45-54 and 60-75 
 
Q.10. According to the Report, Pakistan maintains numerous types of industry support and incentive 
programs, including, inter alia , duty and tax concessions, sector-specific schemes, export 
assistance, local-content or "indigenization" programs, input subsidies, and concessionary 
credit.  But Pakistan has not notified the WTO under Article 25 of the Subsidies Agreement 
since October 1996 (G/SCM/N/3/PAK).  How will Pakistan address its Article 25 notification 
obligations? 
 
In order to boost industrial growth  and encourage investment in the economy, it is necessary that the 
tariff reforms also reach out to producers and manufacturers. The Tariff Policy is applied for 
competitive production of goods through a lower level of duty on inputs. The government is always 
sensitive not to give undue protection through a large spread between the finished and unfinished 
products to breed in competitiveness and rent seeking tendencies. The inputs which are not 
manufactured in the country are generally a llowed to be imported free of customs duty. 
 
There are no compulsory local content or indigeni zation programmes in practice. The government 
eliminated the only remaining indigenization programmes for the Auto industry on 30th June, 2006. 
 The government does not allow any duty credit on im ports, either based on export performance or 
otherwise. However, an input/output co-efficient based  duty drawback scheme is in practice, allowing 
the refund of duties paid on the import of inputs, wh ich are consumed in the manufacture of exported 
products.  The exports are also zero rated from sales tax through the refund of sales tax paid on inputs, which 
are processed to manufac ture exportable products. 
 
Pakistan has in place, "The Research and Development Support Order 2005" for the garment 
sector which was duly notified by the Ministry of Commerce through S.R.O 437(I)/2005 on the 18
th of 
May 2005.   
 
Pakistan believes that it does not have to notify such  R&D schemes to the WTO for the reason that 
there is no clear legal requirement fo r notification of such R&D schemes.  
 
Q.11. Additionally, the privileges afforded to Pa kistan and certain other Members under Annex VII 
of the Subsidies Agreement do not include an exemption from the ban against subsidies 
contingent upon the use of domestic over importe d goods (Article 3.1(b)).  How will Pakistan 
address its obligations under Article 3.1(b) of the Subsidies Agreement? 
 
We would appreciate if some clarity is provided to  this question quoting the specific instance, if any. 
 (i) Taxation 
 
Pages 68-70, paragraphs 108-113 
 
Q.12. The Secretariat’s report notes that several of Pakistan’s domestic taxes (including the general 
sales tax and the federal excise duty) can discriminate against, or have potential to WT/TPR/M/193/Add.1 
Page 96  
 
 discriminate against, imports.  Can Pakistan explain how these taxes are consistent with 
Pakistan’s obligations under GATT Article III? 
 
There is no discrimination for taxation of domestic a nd imported goods. Sales Tax at 15% is levied at 
import and at local stage and readjustment of sales tax levied at import stage is allowed in subsequent 
stages of transactions in the domestic economy in spir it of VAT. Similarly, Federal Excise Duty also 
makes no discrimination in levy for imported or lo cal goods.  These levies of Sales Tax & Federal 
Excise are in fact internal taxes which are le vied both on imported and dom estically produced goods 
and are not contrary to the provisions of Article III of GATT. 
 
(v) Intellectual Property Rights 
 
Trademarks 
 
Q.13. How does Pakistan protect well-known marks? Does Pakistan provide an opportunity for 
right holders to oppose a trademark applicati on or to petition for the cancellation of a 
trademark registration?  
 
(1) Pakistan protects well-known marks under S ection 86 of the Trade Marks legislation. 
Details are available on the webs ite of IPO Pakistan: www.ipo.gov.pk 
(2) Pakistan also provides an opportunity for ri ght holders to oppose a trademark application or 
to petition for the cancellation of a trademark registration. Provisions for ‘Opposition’ to 
trade mark applications have been provided in  sections 28, 29 and 30, of the Trade Mark 
Ordinance, 2001, read with rule 30 of the Trade Mark Rules, 2004. Similarly, Sections 73, 80 
and 96 of the Trade Mark Ordinance, 2001, re ad with rules 68 and 69 of the Trade Mark 
Rules, 2004, are concerned with the ‘Revocation, Invalidation and Rectification’ of trade 
mark registration. 
 Geographical indications  
Q.14.  How does Pakistan prevent the use of mi sleading foreign or domestic geographical 
indications?  How does Pakistan prevent the use of false geographical indications used on 
wines and spirits? How are owners of trademar ks protected against geographical indications 
that are filed later-in-time? 
 
The Trade Marks Ordinance 2001 provides protec tion to the GIs [Section 2(xix)-Definitions, 
Section 82 (Collective Marks) and Section 83 (Certification Marks), read with Para 3 of First 
Schedule and Para 3 of Second Schedule.] There is no distinction in the Trade Mark Ordinance, 2001 
between a domestic or foreign geographical indication. As of yet, no foreign geographical indication 
has been filed under the Trade Mark Ordinance, 2001.  However, in case a GI application is filed, 
legal protection can be granted preventi ng their misleading or false use.  
 Under the existing legal provisi ons cited above, the GI is registered as a Collective Mark or a 
Certification Mark and therefore the principle of prior ity applies. It may also be noted that Pakistan 
is in the process of drafting a sui generis GI law. 
 
Q.15. What are the civil and criminal penalties for wrongful use of a geographical indication? Who 
can enforce a judgment related to the wrongful use of a geographical indication?  In cases of 
infringement, how will damages be calculated? 
  WT/TPR/M/193/Add.1 
 Page 97 
 
 
  The wrongful use of a geographical indication can only be penalized if the application for the 
concerned geographical indication is filed with  the Trade Mark Registry or registration is 
granted. The civil remedies and criminal penalties for wrongful use of a GI (Collective Mark/ 
Certification Mark) provided under Pakistan’s laws are as follows: 
Law Civil remedies 
The Trade Marks 
Ordinance, 2001 Sec.46. Action for infringement:   In an action for infringement all such relief 
by way of damages, injunctions, accounts or otherwise shall be available to 
the proprietor of the trade mark as is available in respect of the infringement of any other property right. 
Sec.47. Order for eraser of offending mark:   Erasing of the trade mark and 
if such erasing is not possible destruction of the infringing goods. 
Sec.48. Order for delivery up of infringing goods, material or articles to the 
proprietor of a registered trade mark. 
Law Penal provisions 
 Sec. 99. Penalty for applying false trade description, etc.:  Imprisonment of 
either description for a term which shall not be less than three months but 
which may extend to two years, or with fine which shall not be less than fifty 
thousand rupees, or with both. 
Sec. 100. Enhanced penalty on second or subsequent convictions:  
Imprisonment of either description for a term which shall not be less than six 
months but which may extend to three years, or with fine which shall not be 
less than one hundred thousand rupees, or with both. 
 Sec. 482. Punishment for using a false trade mark or property mark: 
Imprisonment of either description for a term which may extend to one year, 
or with fine, or with both. 
Sec. 483. Counterfeiting a trade mark or property mark used by another:  
Whoever counterfeits any trade mark or  property mark used by any other 
person shall be punished with imprisonment of either description for a term 
which may extend to two years, or fine, or with both. 
Note:  For exact legal provisions please see the original text that is available on the website of IPO-Pakistan 
(www.ipo.gov.pk). 
(iii) Judgment of Courts are enforced by the courts themselves under the general laws of 
the land. 
(iv) Calculation of amount of damages depends upon the aggrieved party and the court that has 
the jurisdiction in deciding such a matter.  
 
Patents:   Page 78, paragraph 135 
 
Q.16. The Secretariat’s report states that Pakistan is considering introducing a "section 3(d)-type" 
provision designed to exclude from patentability the "mere discovery of a new form of a known substance which does not result in enhancem ent of known efficacy of that substance, 
the mere discovery of any new property or new use of a known substance, and the mere use of 
a known process, machine or apparatus – unless that process results in a new product or 
employs at least one new reactant, thereby allowing only new pharmaceutical discoveries and 
not subsequent medical uses to be patented."  Please elaborate on whether the provision would mean that patents would not be grante d in cases where the invention otherwise meets 
the three categories for determining patentability ( i.e. novelty, inventive step, and industrial 
applicability). 
 WT/TPR/M/193/Add.1 
Page 98  
 
 Pakistan is closely observing international developments  for the grant of quality patents and has yet 
to form a firm position on the issue.  
 
Page 79, paragraph 138 
 Q.17. The Secretariat’s Report st ates that the government is actively considering the need for 
legislation to protect against unfair use of test  data.   How does Pakistan intend to protect 
against unfair use of test data and when does Pa kistan intend to introduce such legislation? 
 
Under the current law, cases of "unfair commercial u se" can be filed with th e courts and the courts 
will decide if unfair commercial use has taken place or not. The government is considering provisions 
that will give protection to undisclosed test data from "unfair commercial use" submitted to the regulatory authority for registration of a drug utilizi ng a new chemical entity. The law is still being 
discussed with the stake holders and no time fram e has been specified for its finalization and 
enactment. 
 
Enforcement:  Pages 77-79, paragraphs 134-138 
 
Q.18. The Secretariat’s report notes that Pakistan  has strengthened its intellectual property rights 
protection and enforcement in recent years.  What steps is Pakistan taking to reduce book 
piracy and software piracy? 
 The Government of Pakistan has taken a number of  measures to strengthen IPR enforcement since 
April 2005. Some of these measures are reproduced below:    - The Intellectual Property Organization of Pakistan (IPO-Pakistan) has been established with 
a major responsibility to coordinate IPR enforcem ent with all agencies in the enforcement 
chain.  
- At the policy level, the IPO Policy Board is comprised of public and private sector members 
as an effective interface for IPR enforcement.      
- At the operational level, enforcement coordination has been institutionalized through the 
Regional Enforcement Coordination Committees, comprising all agencies in the enforcement 
chain, in Islamabad, Karachi and Lahore. 
- Private Investigation Agencies and Consumers’ C ourts already exist in the major urban areas 
to redress public grievances including piracy and counterfeiting. 
 The Government plans to sustain and strengthen these enforcement actions. There is no dearth of 
political will, administrative firmness or financia l commitment on the part of the Government of 
Pakistan to strengthen IP management and enforcem ent in Pakistan. More specifically, book and 
software piracy is being addressed with a strategy as follows:  - These activities are being firmly sustained and st rengthened for elimination of counterfeiting 
and piracy in the country. Federal Investigati on Agency’s raids are mostly directed against 
the major strongholds of piracy.  
- Private detection agencies are providing info rmation to the District Police to conduct the 
raids against book piracy and counterfeiting.  As a result, over three thousand police raids have been conducted since 2005 against piracy and counterfeiting.  
- The Open Source Resource Centre of the Mini stry of Information Technology is providing 
affordable open source solutions to enable mi gration to legitimate business software to 
significantly reduce piracy of business software.         
- The vendors and business associations have al so started self regulating themselves in 
cooperation with the IPO-Pakistan.  
  WT/TPR/M/193/Add.1 
 Page 99 
 
 
 After implementation of above measures in April, 2005, the following results have been achieved:    
 - FIA closed the pirate factories in May, 2005 and  also forestalled the chances of their revival; 
- Pakistan Customs established Anti-Piracy Cells (APCs) at the country’s major international 
airports to institutionalize the government’s  anti-piracy drive. Such an exhaustive measure 
has only been implemented once before in Pakistan Customs history, that being Anti-
Narcotics Cells (ANCs);  
 These efforts have gone a long way to upgrade en forcement which is duly acknowledged by the 
International Federation of Phonographic Industry (IFPI), an international watch dog against piracy. 
IFPI has confirmed that export of pirated CDs/ DVDs has dried up from Pakistan’s airports and 
reduced the import of optical grade polycarbonate, a raw material for manufacturing optical disks, by over 90%. The remaining import of this raw material has been confirmed by IFPI to be for legitimate 
purposes.  
 
Page 79, paragraph 138  
Q.19. The Secretariat's Report states that there ar e no mandatory minimum sentences in some areas, 
such as copyright.  Has Pakistan considered providing remedies such as jail terms and/or 
monetary fines that constitute a deterrent to infringement?  
 As the penalties relating to copyright infringement  are concerned, these are im posed by the competent 
Criminal Courts as provided und er Section 66-73 of the Copyright legislation. The scales of penalties 
are as follows:  a. Imprisonment up to 3 years. 
b. Fine up to Rupees one hundred thousand on first  offence, which can be doubled on repetition 
of offence, under Section 70B of the aforesaid legislation.  
As a matter of fact, the deterrence provided in the copyright legislation of Pakistan has made 
copyright piracy a police cognizable  and non-bailable offence , under Section 74 of the aforesaid 
legislation. Criminal courts are empowered to aw ard monetary compensation also to the aggrieved 
copyright owner while imposing fine on the offender (Section 74A).  
 
IV. TRADE POLICIES BY SECTOR 
(2) A
GRICULTURE , LIVESTOCK , FORESTRY , AND FISHERIES  
Main subsectors (a) Crops 
 
Page 86, paragraph 22 
 
Q.20. The Report mentions that Pakistan can direct  licensed flour mills to buy wheat from particular 
sources. Are licenses issued contingent upon the source used to procure the wheat? Are there 
specific stipulations under the Flour Mill Control Order (of 1959) designating eligible 
sources?  
 The flour mills are free to procure or acquire wheat from any source.  WT/TPR/M/193/Add.1 
Page 100  
 
 (5) S
ERVICES  
(i) Financial services 
 
Page 103, paragraph 79 
 The SECP as apex regulator prudentially supervi ses and monitors the insurance industry (Insurance 
Ordinance, 2000, Insurance Rules, 2002, and SEC (Insu rance) Rules, 2002).  But, there remains some 
confusion between its respective regulatory r esponsibilities and those of the Ministry of 
Commerce; they both issue rules and SECP cannot revoke licenses without consulting the Ministry.   
Q.21. Please explain the responsibilities of SECP and the Ministry of Commerce in the regulation of 
insurance.  Why must SECP consult the Ministry before revoking licenses? 
 
Under section 167 of the Insurance Ordinance 2000, rule making authority lies with the 
Federal Government (Ministry of Commerce). However, in sub-section 3 of the same section, SECP has been sufficiently em powered to make regulations as and when required.  There has 
been no confusion, overlapping or contradiction between the rules notified by the SECP and the insurance rules notified by the Ministry of Commerce.  SECP is always consulted before 
this Ministry takes any decisi on regarding insurance laws.  
The functions of the SECP are to safeguard the interests of the sharehol ders and to ensure maximum 
dividends to them. Interests of policy holders comp ete with those of shareholders and that is why 
policy making has been placed with the Mini stry of Commerce under the rules of business. 
 SECP is not required under any rule to consult the Ministry of Commerce before revoking licenses.  
 
Page 103, paragraph 81 
 
Foreign life and non-life insurance firms must be lo cally incorporated (after promulgation of the 
Ordinance any new branches are prohibited); full y foreign-owned firms are permitted following 
removal of the 51% foreign equity cap in September 2006.  Foreign companies must bring in minimum foreign exchange of US$4 million in equi ty towards minimum capital requirements; the 
balance may be raised locally.  Residents are generally prohibited from insuring with overseas 
companies (Insurance Rules, August 2002). 
 Q.22. Please explain the situation in which the mini mum capital requirements may be raised locally. 
 
It is clarified that: 
  i) Every insurer is required to comply with a ll the conditions including revised paid up capital 
requirements of Rs. 500 million in case of life Insurance and Rs. 300 million in case of non-life/ general Insurance. This required paid up  capital in Pak-Rupees is more than 4 Million 
US $. 
 ii) Of the required paid up capital it is mandato ry for the foreign investor to bring in a minimum 
of 2 million US $ from abroad. The rem aining capital may be raised locally. 
 
SINGAPORE 
 
 
Q.1. Para 8 (WT/TPR/G/193): "In order to further liberalize Pakistan's foreign direct investment 
(FDI) regime, minimum FDI levels in social, agriculture and infrastructure sectors have been  WT/TPR/M/193/Add.1 
 Page 101 
 
 
 reduced from US$0.5 million to US$0.3 million and in services, such as retailing and 
wholesaling, from US$0.3 million to US$0.15 million.  The maximum limit of foreign equity of 51% in life insurance was removed in September 2006. The number of countries with which Pakistan has signed bilateral investment treaties has increased from 18 to 48." 
 
What are the minimum FDI requirements in the ot her sectors? Also, are there plans to liberalise 
foreign equity limits for all the various sectors?  
The minimum FDI requirement as per the Investme nt Policy of Pakistan is US$ 0.3 million in 
Agriculture and Non-Manufacturing (Infrastructure and Social) Sectors and US$ 0.15 million in the 
Services Sector (including I.T. & Telecom Service s). The Manufacturing Sector has no minimum FDI 
requirement limit. Furthermore, measures are underw ay to remove the minimum FDI requirement of 
US$0.15 million from the Services Sector.  
 
In order to make the environment more conducive for foreign investment, the Investment Policy of 
Pakistan allows 100% foreign equity in Manuf acturing, Non-Manufacturing (Infrastructure and 
Social), Services Sector (including I.T. & Tel ecom Services), and Corporate Agriculture Farming 
(CAF). In addition to this, the Go vernment has allowed 100% foreign e quity ownership in all types of 
Insurance Businesses.  
  
Q.2. Para 48 (WT/TPR/G/193): "The foreign excha nge regime has been further liberalized.  The 
Pakistani corporate sector has been allowed to  acquire equity abroad. Foreign registered 
investors can bring in and take back their cap ital, profits, dividends, remittances, royalties, 
etc. free from any restriction..." 
 Is the acquisition of equity by the Pakistani co rporate sector allowed with no restrictions, no 
deposit/registration or approval procedures? What about the acquisition of real estate? 
 
In order to acquire equity by the Pakistani cor porate sector in entities abroad, by way of foreign 
direct investment, Pakistani entities have to obtain the State Bank’s prior approval. There are defined guidelines/procedures for applying to SBP for investment abroad. 
 Q.3. What is the definition of foreign registered  investors? If the company is incorporated in 
Pakistan, but sets up a branch in another country, will there be any restrictions or specific processes before the Pakistani company can transfer funds to its branch office? 
 
If a foreign investor is interested in bringing FDI to  the country, the only requirement is that the funds 
should be brought into the c ountry through banking channels. Once the funds are received, the 
investor/investee approaches the SBP for registration of  the investment only for statistical purposes. 
By virtue of this process, foreign investment is registered by SBP and accordingly capital/ 
profits/dividends/capital gains can be repatri ated without any approval from any entity. 
 
INDIA
 
 
Delay in grant of MFN status to India by Pakistan  
 
Question 
 India and Pakistan have no formal trade agreement. While India has a ccorded MFN status to Pakistan, 
Pakistan maintains a list of importable items from India called Positive List which presently consists 
of 1802 items. Thus, Pakistan has denied MFN status to India. Would Pakistan spell out the reasons for this discriminatory treatment?  WT/TPR/M/193/Add.1 
Page 102  
 
 Trade relations between India and Pakistan are c ontinuously improving. Both countries, under the 
framework of the SAFTA (South Asian Free Trade Ag reement) along with other SAARC (South Asian 
Association for Regional Cooperation) members ha ve agreed to a tariff liberalization programme. In 
the bilateral context, the positive list is under c onstant review for expanding  the list and making trade 
between the two freer. The bilateral trade figures be ar testimony to such liberalization and currently 
Pakistan has a negative trade balance with India. 
 ISRAEL
 
 
Israel remains deeply concerned with several po licy instruments which, according to the secretariat 
report, seem to be incompatible with Pakistan 's commitments in the framework of its WTO 
membership.  In particular: the secretariat report states in paragr aph 14 of page 24 that Pakistan does not accord 
MFN treatment to Israel. The report further says, in paragraph 4 of page 36 that all imports from 
Israel are banned. This import ban is further reflect ed in paragraph 43 of page  50 of the report. Other 
measures concerning prohibition of Foreign Direct Investment from Israel in Pakistan are also mentioned in the report.  In this context, Israel would like to raise the following questions:  
1. Could Pakistan please explain how these measures are in conformity with its WTO 
commitments in respect to non- discrimination? 
2. Is Pakistan ready to withdraw these measures a nd to indicate its intentions for the withdrawal 
of the prohibition of trade with Israel? 
 Trade relations between Israel and Pakistan are best  viewed in a broader political context. Pakistan 
is mindful of the current situation. However, at th is point in time Pakistan is unable to indicate a 
timeframe for normalization of trade between the two.  INDONESIA
 
 
1. Refer to paragraph 8 of the Government Report,  Pakistan Government stated that had reduced 
the minimum amount of FDI in services, such as retailing and wholesaling, from US$0.3 million to US$0.15 million. Despite of that, does Pakistan impose specific regulation for service industry in retailing and wh olesaling in big cities, especially in terms of location to 
avoid unfair competition between modern market and the traditional? 
The offer of commitment for entry and investment in wholesaling and retailing business is subject to 
use of economic needs test (ENT) on a case by case basis. ENT criteria include density of supermarkets determined on the bas is of population in urban area s and /or need assessment through 
a feasibility study of the locality proposed  to being catered to by supplier. 
2.  Based on the Secretariat Report Para 22, stated that numbers of tax payers in Pakistan remains 
"abysmally low", despite improvements in 2006/07. Only 1.5% of the populations are 
registered taxpayers:  less than half of these f ile income tax returns, and one tenth file GST 
returns. Despite of the condition, Pakistan stat ed that tax reform remains as priority for the 
government. Indonesia would like to kindly request  for more information regarding the tax 
reform program. Would Pakistan like to issue a new law of tax to improve its compliances 
and government revenue at the same time, or Pa kistan Administration would just increase the 
enforcement against its takes payers? Will ther e be significant changes on FDI in all areas 
prior to tax administration, especially related with facilities for new and existing investment?  WT/TPR/M/193/Add.1 
 Page 103 
 
 
 Pakistan is working on a two-pronged strategy. A ne w Income Tax Law was introduced in 2002 to 
modernise and simplify tax collection; while making it ea sier for the taxpayers to  comply with the tax 
regulation. The number of taxpayers has already in creased by almost 50 % since the introduction of 
the new law. Thanks to the rationalisation of tax burden on financial companies such as banks, there 
has been a very substantial increa se in FDI for these sectors. 
3.  Based on Pakistan Secretariat report, para 7 of Trade Policy Formulation and Implementation. 
It is stated that Pakistan’s general trade polic y objectives remain to reduce protection, achieve 
a more outward-oriented trade regime, increas e market access for exports, and greater global 
integration. Combined with information of the Secretariat report, par 21, which stated that 
Pakistan benefited from the EC’s Generalized System of Preferences (GSP) scheme, 
including the special arrangements to combat drug production and trafficking during 2002-05 
involving duty-free access for all industrial items  and certain agricultural products.  Indonesia 
would kindly request more information from Pakist an on how Pakistan used its influence with 
EC to improve market access to the developing countries? 
Pakistan was a beneficiary of EC’s drug related incentive scheme that was subsequently replaced 
with the Special Incentive Scheme, called GSP+. As noted in paragraph 21 of the Secretariat’s report, 
Pakistan is not a beneficiary of this scheme. It is  however eligible for ge neralised GSP scheme where 
tariff preference is rather very limited. 
In the Committee on Trade and Development at th e WTO, where the GSP+  scheme was notified, 
Pakistan has been asking the EC to set objective cr iteria for eligibility to such schemes. Besides, 
Pakistan has been reminding the EC that this scheme was discriminatory. It has raised several 
questions in this regard and is s till awaiting proper response from the EC. 
Pakistan feels that since the selection criteria for GS P+ scheme is arbitrary, its compliance with the 
WTO Rules is questionable. 
4.  As a global issue, the increase of oil pri ce had influenced the global economy. How does 
Pakistan deal with the increase of the oil pri ce? Does Pakistan intend to adjust its current 
economic policy; especially ones affected with  consumption resulted from imported goods? 
It is true that oil price hike has  impacted Paki stan’s economic growth negtaively. With the sharp 
increase in oil prices, budget deficit and the current account deficit have also risen. Furthermore, 
high oil prices compounded with high commodity pr ices have brought strong inflationary pressures. 
The Government has tried not to pass on the full impact to the consumers as it would have further 
increased the inflationa ry pressure. To meet this extra expenditu re, the Government has resorted to 
extra-borrowing from the State Bank of Paki stan while also cutting back on some development 
expenditure. The State Bank has also tightened its monetary supply policy to curtail expenditure. If 
the prices continue to remain high, some of the increase may have to be passed on to the consumers. 
However, it is not likely that any curbs will be placed on imports. 
5.  Refer to secretariat report, trade policies by sector on paragraph 10, stating that most 
provinces have legislation to regulate agricultural marketing, which remains poorly 
developed.  Post-harvest losses of perishab le products are around 30%, accentuated by 
inadequate infrastructure and transport faciliti es. As agriculture is a designated government 
priority and account for sustainable food for th e whole nation, Indonesia would kindly request 
for more clarification about Pakistan’s upcom ing policy in increasing the productivity of the 
agricultural industry. Will Pakistan policy st ress on the development of infrastructure or 
increase its domestic support (price and non price) for either agricultural products or its input 
products? If it does, what will be the acceptable level of protection? WT/TPR/M/193/Add.1 
Page 104  
 
 On domestic support (price and non-price), Pakistan has already phased out its price support system 
for rice, sugar cane, cotton. Price support for wheat is mainly for price stabilization. The government 
reviews the price of wheat annually. We are fo cusing on enhancing competitiveness rather than 
sustaining it through a support mechanism.  
One of the biggest challenges Pakistan faces is to ensure food security for its 160 million population, 
growing by 1.9% per annum. Consequently, e nhancing the yield of its crops is crucial. 
The government has designed special programs (Cr op maximization Program) for small farmers to 
improve productivity. Besides, other short and me dium term programs are being implemented on 
value addition and minimization of post ha rvest losses. Some other measures include: 
a. Allocation of more than PKR 5 billion to research and development for developing high 
yielding crop varieties. 
b. Extension services of all the provinces have b een revamped and the private sector has been 
involved in extending its reach of these services. 
c. A quantum leap in allocation of resources to the agriculture sector, amounting to 
PKR 70 billion for initiating special projects to increase productivity of agriculture sector 
through capacity building, introduction of new technologies and improving rural 
infrastructure. 
d. The Government is promoting decentralization and liberaliza tion of agricultural services to 
enhance competitiveness. 
e. A project has been launched to strengthen capacity of provincial crop reporting services. 
With respect to infra structure development the ‘Na tional Trade Corridor’, is aimed at re vamping the 
whole transport sector including ports, roads, railways and aviation. 
6.  As a part of the reformation, Indonesia unders tands that Pakistani administration had involved 
the private sector to accelerate the level of re formation of the industry. Does it include more 
FDI access in domestic agricultural industry, since it considered as an important sector for whole nation? 
In the context of involvement of the private sector  in agricultural industry, the Government introduced 
a policy package for Corporate Agricultural Farm ing (CAF) in 2002. This package contains a 
number of measures to facilitate private, foreign and domestic investment in this sector.  The salient 
features of this policy package include the following:  100% foreign equity subject to local and foreign 
companies being incorporated in Pakistan und er the Companies’ Ordinance 1984; no upper ceiling 
on land holding for CAF by amending relevant laws , size of farm determined by the prospective 
investor; agriculture income tax regime applicable in provinces would be applicable to CAF; no 
government sanction required except registration with  Board of  Investment (BOI) and exemption of 
dividends from tax 
 
__________