WORLD TRADE  
ORGANIZATION  WT/TPR/M/193 
27 February 2008 
 (08-0838) 
Trade Policy Review Body 
16 and 18 January 2008   
 
  
TRADE POLICY REVIEW 
 
PAKISTAN 
 
Minutes of Meeting
 
 
Chairperson:  H.E. Mr. Vesa Himanen (Finland) 
  
  Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF PAKISTAN 4 
III. STATEMENT BY THE DISCUSSANT 7 
IV. STATEMENTS BY MEMBERS 9 V. REPLIES BY THE REPRESENTATIVE  OF PAKISTAN AND ADDITIONAL 
COMMENTS 18 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 20 
 
     
 
    
 
    
 
  
Note:   Advance written questions by WTO Memb ers and the replies provided by Pakistan are 
reproduced in document WT/TPR/M/193/Ad d.1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.  WT/TPR/M/193 
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  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The third Trade Policy Review of Pakistan was held on 16 and 18 January 2008.  The 
Chairperson (H.E. Mr. Vesa Himanen) welcomed the Pakistan delegation, led by Mr. Shazada Alam 
Monnoo (Federal Minister, Ministry of Commerce) and H.E. Dr. Manzoor Ahmad, and the discussant 
H.E. Ms Karen Tan (Singapore).  As usual, the discussant would speak in her personal capacity and 
not as a country representative.  In accordance wi th established procedures, the discussant had 
provided in advance outlines of the main issues she intended to raise (document WT/TPR/D/168). 
2. The Chairperson recalled the purpose of Trade Po licy Reviews and the main elements of the 
meeting’s procedures.  The report by Pakistan was contained in document WT/TPR/G/193 and that of 
the WTO Secretariat in WT/TPR/S/193.  As indicat ed in WT/TPR/6/Rev.1, the Member under review 
should provide written answers, by the beginning of  the review meeting, to questions submitted at 
least two weeks before the meeting.  Questions posed  subsequently should be answered, to the extent 
possible, before the start of the second session of th e meeting.  Questions left unanswered at the end 
of the second session should be answered in writing no later than one month after the meeting.  The 
following delegations had submitted qu estions in writing at least two weeks in advance of the meeting 
and these had been transmitted to the Pakistani dele gation:  the European Communities;  Brazil;  
Japan;  China;  Canada;  Hong Kong, China;  and the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu (Chinese Taipei).  Copies of these questions and of Pakistan’s answers were available in the meeting room.  Written questions  by Australia;  Republic of Korea;  Chile;  
Argentina;  the United States;  Singapore;  India;  and Israel, submitted after the two-week deadline, 
had also been transmitted to the Pakistani delega tion, and copies, along with the answers, were 
available in the meeting room.  All advanc e questions and responses are reproduced in 
WT/TPR/M/193/Add.1. 
3. The Chairperson indicated that according to both reports Pakistan had successfully met 
several major challenges since its previous Trade Policy Review in 2002, despite some setbacks.  
Economic performance had been impressive, underpinned  by strong growth in domestic consumption 
and exports as well as an improved macroeconomic, especially fiscal, position.  Structural reforms 
had also contributed to growth and reduced poverty,  although this was still high.  Noteworthy areas of 
progress included: trade facilitation (including improved customs procedures);  reduced tariff 
protection and raised tariff bindings;  and strengt hened intellectual property rights protection, 
including enforcement.  Members would welcome fu rther details on, among other things:  plans to 
cope with monetary expansion and associated infla tionary pressures; fiscal consolidation; private 
(domestic and foreign) investment climate; trade liberalization plans; export assistance and 
diversification; regional integra tion initiatives; tax, regulatory (i ncluding in key services), and other 
structural reforms to improve international compe titiveness.  He anticipated that the discussion during 
this Trade Policy Review would assist Pakistan’s policymakers in preparing to meet some of the 
challenges ahead and to seize some of the emerging global opportunities. WT/TPR/M/193 
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  II. OPENING STATEMENT BY THE RE PRESENTATIVE OF PAKISTAN 
4. The representative of Pakistan
 stated that this Review was occurring at a difficult time for 
Pakistan, with parliamentary elections postponed fr om 8 January to the 18 February 2008.  Despite 
the political turbulence, the delegation had tried its best to achieve the meeting’s various deadlines.  
5. Pakistan’s economy had revived impressively in  the past few years.  Sound macroeconomic 
management and wide-ranging stru ctural reforms had contribute d to high real GDP growth, a 
reduction in the debt-burden and an improved business climate.  Adherence to pro-poor policies  had 
helped lower poverty.  Increasing foreign direct and portfolio investment had become important 
sources of financing.  On 17 December 2007, th e IMF Article-IV consultations concluded that 
Pakistan had experienced a "remarkabl e turnaround in economic performance". 
6. Extensive reforms since the last  Review in 2002 covered almost all sectors. They had helped 
Pakistan to become one of the fastest growing Asian economies with aver age annual growth above 
7% during the last five years.  The economy’s size and per capita income in U.S. dollar terms had almost doubled, and GDP per capita on a purchasing power parity basis was US$2,500.  Macroeconomic indicators were strong.  The fiscal deficit had been reduced and foreign exchange 
reserves were comfortably high.  Since 2002, Pakist an’s total trade had grown 18% annually.  Its 
stock market was among world’s best performing,  with the KSE-100 Index growing over tenfold 
during the last six years.  A February 2007 report by Grant Thornton International (a world leading accounting and management firm) listed Pakistan  as one of the most promising economies. 
7. During the review period, Pakistan’s policies to deregulate, privatize and liberalize the 
economy had contributed directly to performance.  Rapid GDP growth relied heavily on sharp growth 
in manufacturing, due to demand stimulus from higher incomes and rela xed consumer credit 
restrictions.  Higher exports and investme nt, which had raised productive capacity and 
competitiveness, also contributed to growth, along w ith 7% annual growth in services, especially in 
financial services and telecommunications. 
8. Almost all sectors had been opened, to achieve a level playing field for domestic and foreign 
investors.  Important sectors such as banks, tel ecommunications, oil and gas, and power distribution 
had been either totally privatized or the Stat e’s role had been reduced to a minimum.  The 
Government believed that privatization should no t create new monopolies. Competition laws and a 
number of regulatory authorities had been intr oduced to manage deregulated sectors.  
9. To further liberalize foreign direct investment  (FDI) the required minimum equity levels in 
social, agriculture, and infrastructure sectors ha d been reduced.  FDI exceeding US$6 billion in 2006-
07 was a testimony to the efficacy of Pakistan’s investment friendly policies and of the international 
confidence in the economy.  It had signed more bila teral investment treaties (up from 18 to 48).  It 
continued to strive for qualitative improvements in the business climate to boost trade and FDI. 
10. Pakistan had persistently tried to rationalize tax rates, broaden the tax base, shift the tax 
incidence from imports to consumption and inco me, and to improve the efficiency of tax 
administration and collection through enhanced volun tary compliance.  Coupled with trade facilitation 
measures and wide-scale deregulation, such as behind- the-border reforms, the State’s role in the 
economy was mainly to formulate policies and to provide an enabling environment facilitated by 
independent regulators. 
11. High GDP growth had positive distributional benefits. Unemployment had declined from 
8.3% to 5.3% during the review period.  By increasing more resources to human resource 
development activities Pakistan had graduated to th e medium category of developing countries on the 
UN human development index.  It fully appreciated  that improving the quality of human capital was  WT/TPR/M/193 
 Page 5 
 
 
  crucial to enhanced productivity and thus invest ed in training and skills development to build 
competitiveness.  This was necessary for continued economic growth and to ensure that the benefits 
reached the economically less privileged.  These segme nts of society, especially in remote locations, 
received high priority, aimed at bringing them into the economic mainstream.  The benefits of growth 
could not reach the grass roots without a robust local government system.  Pakistan had introduced a 
far reaching devolution programme to improve se rvice delivery and grass roots participation. 
12. Pakistan pursued an integrated trade policy a pproach that combined multilateral, regional, 
bilateral and unilateral trade liberalization.  As  a founding member of the GATT in 1947 and the 
WTO in 1995, it strongly supported an open, transparen t, and rules-based multilateral trading system.  
Most trade was conducted on an MFN basis.  Howeve r, Pakistan believed that the trading system 
suffered from several distortions adversely affec ting trade opportunities for developing countries.  A 
successful and ambitious Doha Round result coul d considerably minimize such imbalances.  
13. More specifically, Pakistan’s foremost objectiv e was to ensure removal of tariff peaks and 
high tariffs on products of export interest.  Any Doha Round result should not allow developed 
countries to delay their market liberalization.  Th is would be tantamount to  special and differential 
treatment for developed countries and seriously breach the Round’s development mandate.  In 
agriculture, Pakistan’s fundamental interest was to  strengthen international rules governing trade and 
to achieve far-reaching trade reforms.  This could be met by early elimination of all forms of export 
subsidies and substantially reducing trade-dist orting domestic support, beyond paper-cuts, and 
substantially improving market access.  Pakistan’s  main interests in services laid in obtaining 
predictable market access in all four modes of suppl y, particularly modes 4 and 1.  It also strongly 
supported improved and clarified rules governing trade remedies and subsidies, including for 
fisheries;  in its view most trade remedies were  being used for protection and stronger disciplines 
were needed. 
14. Supplementing its multilateral efforts Pakistan was also exploring b ilateral and regional 
market access opportunities.  It was pursuing a ra nge of RTA’s with varying tariff concessions and 
provisions for greater integration with partner count ries.  Pakistan recognized that deeper economic 
integration through trade in services, free investment  flows, reduced non-tariff and technical barriers 
to trade, harmonized and mutual recognition of standards, as well as coordinated macroeconomic 
policies would benefit Pakistan.  All its signed RT A’s had provisions for deeper tariff cuts and to 
expand economic cooperation. 
15. Pakistan was continuing to unilaterally libera lize tariffs.  The simple average applied MFN 
rate in 2006-07 was 15.0% compared with 20.4% in 2001-02.  It was currently 14.5%, with an import 
weighted tariff of 8% and an average effective ra te of 7.6%.  Tariffs were mainly bound at low 
applied rates; in most other cases applied rates we re well below bound rates.  The main objective of 
tariff policy was to provide domestic industry a level playing field, not to limit imports or generate 
revenue.  
16. Trade liberalization was desirable for long-term economic growth, but could cause short-term 
pressures on some domestic sectors.  Nevertheless Pakistan had not resorted to protection but had 
focussed on enhancing competitiveness.  It had confidence in its ongoing reforms and that its 
institutions would successfully withstand competitive pressures. 
17. Like any economy, Pakistan had external and domestic challenges.  The unprecedented rise in 
the price of oil and other commodities was of concern.   It also feared a possible slow-down in some 
major economies, which could dampen global ec onomic activity.  Pakistan hoped its economy, 
strengthened by the recent reforms, would be resilie nt to these shocks.  Despite recent hiccups, the 
economy continued to perform well and was on track to  achieve targeted growth.  The Government’s 
ongoing reform agenda was aimed at modern izing Pakistan’s economy and society. WT/TPR/M/193 
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  18. Some WTO members had expressed interest in Pa kistan’s intellectual property rights system.  
It was aware of the importance of IP in its deve lopment, and fully cognisant of the need to upgrade 
domestic laws and institutional arra ngements to international standard s.  Pakistan had launched an 
ambitious programme to revamp its legal and institutional frame work and had made significant 
headway on enforcement.  The formation of the In tellectual Property Organization (IPO) had enabled 
the integrated management of all types of IP a nd had improved service delivery.  The Government 
had significantly invested in IP awareness and enforcement, including coordination.  
19. Pakistan was trying to meet its obligations of  minimum compliance;  a government priority 
was to undertake reforms with a clear vision to  make Pakistan prosperous and progressive.  WT/TPR/M/193 
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  III. STATEMENT BY THE DISCUSSANT  
20. The discussant  (H.E. Ms Karen Tan) pointed out that the third Trade Policy Review of 
Pakistan was taking place against the backdrop of a series of unfortunate events – the recent 
assassination of Benazir Bhutto, the head of the Pa kistani People’s Party, subsequent violence and 
instability, and the postponemen t of national elections.   
21. Pakistan’s macroeconomic and trade performance had been good since its last TPR in 2002.  
Economic growth had averaged over 6% in recent y ears.  The Government's commitment to market 
reforms and liberalization had greatly enhanced the i nvestment climate.  In particular, the financial, 
telecommunications, oil and gas, and power sector s had been significantly privatized.  A near 
doubling of inward FDI in the first eight months of the fiscal year 2006/07 (June-June) to 
US$2.9 billion, combined with strong growth in  domestic consumption and exports had reduced 
unemployment. 
22. The Government should be lauded for commitm ent to creating an open economy integrated 
with the global market.  Commitment to the multilate ral rules-based trading system was demonstrated 
by its pro-active and constructive role in the DDA ne gotiations, especially in market access, rules, and 
trade facilitation.  Besides the WTO, Pakistan was active on regional and bilateral fronts.  In recent 
years, it had expanded its network of regional and bilateral free-trad e agreements, most notably with 
Asian partners, China, Malaysia, and Sri Lanka.  It was also pursuing a joint FTA study with ASEAN 
and negotiations with the EC and GCC.  
23. Apart from more prudent macroeconomic policies, fiscal restraint, and structural reforms, 
Pakistan’s general trade policy objectives were focussed on reduced protection, a more outward-
oriented trade regime, increased market access for e xports, and greater global integration, aimed at 
increasing economic efficiency, competitiveness and e xport-led growth.  The Government was also 
clearly committed politically to fulfiling the obligations of WTO membership.   
24. Pakistan had bound 98% of tariff lines and virtually all tariffs (99.4%) were ad valorem .  This 
promoted market access, transparency, and predictab ility.  Its simple average applied MFN rate had 
fallen from 20.4% in 2001/02 to  14.5% currently.  Peak ad valorem  rates had dropped from 250% to 
90% and focussed on alcoholic beverages and auto motive items.  Tariff reductions had been  
complemented by the removal or relaxation of import prohibitions on a number of items.  
25. Services had generally been liberalized accord ing to Pakistan’s relatively extensive GATS 
schedule.  In its initial offer tabled in May 2005, Pakistan had offered greater coverage of scheduled 
commitments, from 47 to 65 activities, thereby cont ributing to greater stability and predictability.  
26. Pakistan should be credited for strengthening protection for intellectual property rights, 
including enforcement, especially in optical piracy .  Customs was also being reformed and automated, 
with clearance times generally shortened.  Enha nced risk management had lowered physical 
inspection rates of imports and exports.  Pakistan also disbursed general investment incentives on a 
national treatment basis.  
27. Pakistan’s liberal and pro-market policies ha d facilitated access to foreign goods and services, 
and helped its economic development.  Pakistan  had graduated from a "low" to "medium" ranked 
country on the UN Human Development Index and poverty had been significantly reduced.  This 
demonstrated that trade and investment liberali zation, with an appropriate regulatory framework, 
contributed to economic growth and development.  It also reinforced the need for WTO Members to 
conclude the Doha Development Agenda since its liberalization outcome would promote economic 
development generally.  WT/TPR/M/193 
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  28. While Pakistan’s recent economic experience ha d been good it faced many challenges. To 
ensure continued growth and business confidence it n eeded to resolve the political and security crises. 
Prolonged political instability would have repercussi ons on trade and investment.  The Government 
also needed to do more to improve infrastructure and lower the country’s cost of doing business.  
Education and training were essential to build an  effective labour force and improve employment. 
Notwithstanding Pakistan’s current political uncer tainty, it had to deepen its macroeconomic, 
structural, and social reforms to sustain the impressive economic gains.   
29. While a gradual and incremental approach to re form had worked well, within the context of 
Pakistan’s specific economic situation, a more  comprehensive approach might be necessary to 
maintain high growth levels.  Towards this end Pakistan needed to addr ess issues such as its narrow 
production and export base, infrastructure bottlenecks, labour market rigidities, and to diversify away 
from traditional markets such as the United States and the EC.  
30. Pakistan’s high level of binding and use of ad valorem  rates provided certainty and 
predictability to traders. However, its regime coul d be improved.  The final average bound tariff rate 
of 61.3% was almost four times higher than the 2007 /08 applied levels.  This reduced predictability 
and gave substantial leeway to raise applied tariffs .  On average, the gap w as highest for agricultural 
products, where bound levels exceeded 95%.  In a ddition, Pakistan maintained lower duties on 
industrial plants, machinery and raw materials than  on consumer goods and/ or was reducing tariffs 
faster on inputs than on final goods to favour investme nt and industrial developm ent.  This added to 
tariff dispersion.  Furthermore, the "regulatory dut ies" of up to 100%, which could be imposed on 
specified imports in addition to tariffs a nd "special duties", needed to be removed. 
31. While Pakistan had submitted an initial service s offer to increase the number of activities 
covered under its GATS schedule, mo re could be done.  For exampl e, she asked whether Pakistan 
would be prepared to make commitments on the cross border supply of services, which was currently 
unbound for all sectors.  And whether it would consid er removing, and if not reducing, equity limits 
and/or other specific conditions for commercial pr esence in certain sectors such as insurance and 
banking. 
32. Pakistan had not taken countervailing or safe guard actions, but it ha d conducted 24 anti-
dumping investigations and imposed 19 measures since 2002.  Greater use of contingency measures, 
particularly anti-dumping action, had an inevitable impact on market access.  The discussant asked whether Pakistan intended to reduce the number of anti-dumping measures.   
33. As Members moved towards concluding the D oha Round, Pakistan had an even more 
important role to play.  As a key developing c ountry, it had the credibility to build bridges between 
the different sides to help build a strong  rules-based multilateral trading system.   WT/TPR/M/193 
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  IV. STATEMENTS BY MEMBERS 
34. Members complemented Pakistan for its impressive economic growth since its last Review in 
2002 which had turned it into one of the fastest grow ing Asian economies.  This had occurred despite 
a number of setbacks.  Members noted that Pakistan had graduated to a 'medium development' country on the UN Human Development Index in 2003.  They also noted that although its macro-
economic position had been strengthene d, and that extensive trade a nd investment liberalization and 
with other structural reforms had contributed great ly to growth, more could be done.  Improving the 
political and security situation, among other reform s, would help attract FDI.  Several Members 
observed that Pakistan’s tariff schedule was still comp lex, due to the multitude of rates, and that the 
wide gap on average between bound and applied rates reduced market access predictability for 
traders.  Members commended Pakistan for strong ly supporting the multilateral trading system and 
participating actively in the on-going DDA negotiations. 
35. The representative of Sri Lanka
 referred to his country’s important trade and other links with 
Pakistan, further cemented by the 2002 bilateral free-trade agreement.  The two countries had also 
agreed to enhance investment cooperation in sectors including information technology, 
pharmaceuticals, and textiles.  
36. Sri Lanka appreciated Pakistan’s continued commitment to deregulate, privatize, and 
liberalize its economy.  This had contributed to  impressive GDP growth and associated benefits, 
including increased trade, improved per capita  income, employment generation, and poverty 
alleviation.  In particular, Sri Lanka appreciated  Pakistan's reforms in the telecommunication and 
financial sectors, and in trade facilitation.  It also appreciated Pakistan's contribution to the 
development of the South Asian region through tr ade and economic cooperation.  The two countries 
shared strong bilateral, regional, and multilateral tr ade commitments.  Sri Lanka worked closely with 
Pakistan in the DDA to espouse key developing country interests, including in development, and most 
importantly on the need for greater market acces s in NAMA, and their defensive concerns in 
agriculture, mode 4 market access in services, and trade facilitation. 
37. The representative of th e European Communities  referred to Pakistan's trade ties with the EC, 
which remained its first trading partner.  Recent meetings of the EC-Pakistan Joint Commission and 
of the Sub-Group on Trade had initiated important dial ogue and created an institutional framework for 
further discussions on strengthening trade relations.  The EC offered Pakistan the benefits of its GSP 
scheme.  It was one of the key GSP beneficiaries,  ranking seventh among the 178 GSP users.  The EC 
also provided substantial trade related technical assistan ce to help foster Pakistan's global integration.  
The National Indicative Programme for 2007-2010 foresaw €13 million for trade development and 
economic cooperation, an almost threefold rise.  Th e EC welcomed Pakistan’s pursuit of further trade 
integration through the South Asia Free Trade Agreem ent (SAFTA), where its role was crucial, as 
well as Pakistan's announcement to reduce, for the fo urth time, customs duties on almost 5,000 items 
under SAFTA.  The EC encouraged Pakistan to c ontinue with regional economic integration and 
development in a transparent way, and re quested information on any such plans. 
38. The EC appreciated Pakistan’s decisive steps to  strengthen intellectual property protection, in 
particular enforcement.  While it had also upgraded its IPR protection regime in the light of its TRIPs 
commitments, including preparing an amendment to the Drugs Act 1976, further work was required.  
Pakistan’s export taxes of 20% and more on ferro us and non-ferrous waste and scrap, and certain 
leather goods concerned the EC.  These could implic itly subsidize domestic users of affected goods 
by reducing prices, thereby distorting world trade in commodities and competition at the processing 
stages (a mirror to tariff escalation).  The EC enco uraged Pakistan to eliminate these, especially on 
raw hides and skins (including wet-blue), whic h would also benefit Pakistan’s producers and 
exporters.  The EC appreciated Pakistan ’s steps to significantly reduce peak ad valorem  tariff rates 
but they remained on a number of items, including motor vehicles.  While the Capital Value Tax on WT/TPR/M/193 
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  motor vehicle imports had been wit hdrawn in June 2007, additional r estrictions applied to commercial 
imports of used vehicles.  The EC encouraged Pakist an to re-consider its motor vehicle import policy.  
Since multilateral negotiations offered the best way to  ensure progressive liberalization of world trade 
in a predictable, transparent, and non-discriminat ory way the EC urged Pakistan and other Members 
to work constructively to successfully end the DDA. 
39. The representative of Brazil
 noted that Pakistan was a relatively large and diversified 
populous economy, managing to maintain growth ra tes above the global average and significantly 
reducing poverty  Bilateral trade flows with his c ountry had grown steadily.  Pakistan had favourable 
economic prospects.  Ongoing open trade and investme nt policies, as well as structural reforms, had 
allowed for a stronger economic outlook and sustai ned economic growth:  the public debt/GDP ratio 
and the fiscal deficit had declined;  and taxati on remained low and Government spending low to 
moderate.  Tax collection and pub lic sector spending patterns could be improved.  Worrisome issues 
included Pakistan's rising external trade and current account deficits.  These c ould be partly explained 
by monetary policy tightening to curb inflation,  which eroded international competitiveness, and by 
infrastructure bottlenecks, which raised costs.  These problems were largely shared by other 
developing countries, which exported "sensitive products" or faced all kinds of non-tariff and 
technical barriers. 
40. Important 1iberaIization measures since Pakistan's last Review included increased tariff 
bindings and improved customs procedures.  More co uld be done to develop domestic efficiency and 
enhance Pakistan’s international competitiveness,  but real improvements depended on successfully 
concluding the DDA to reduce trade barriers, especia lly for developing countries.  Pakistan, as a 
committed Member of the G-20, was active in the DDA agricultural negotiations, and could further 
benefit from reduced levels of subs idies and improved market access. 
41. The representative of Japan  noted that Pakistan’s economy was relatively open for its stage of 
development and had become more outward-oriente d due to clear policy decisions.  These had paid 
off well through remarkable macroeconomic performan ce.  Japan welcomed Pakistan’s recent lifting 
of investment restrictions on life insurance, and a ppreciated Government efforts to design a long-term 
automobile policy.  Investors welcomed Pakistan ’s upgraded customs capability.  Pakistan’s many 
challenges included under-invoicing by importers, which unduly lowered import prices and needed 
remedying to induce more joint-ventures, and a nu mber of excise tax c oncessions favouring local 
content that seemed unjustified under Article 3 or Article 3.1.(b) of the WTO SCM Agreement.  
Pakistan’s foremost challenges were, however, to establish a more stable and peaceful environment 
and to reduce urban and rural inequalities.  It also  faced formidable macroeconomic, structural, and 
social challenges to sustain growth and poverty a lleviation.  Japan's trade and investment with 
Pakistan had risen threefold and nine fold, respectively, in the past five years.  Both countries had 
agreed on revisions to their taxation treaty.  
42. The representative of China  commended Pakistan for continuing systematic efforts to increase 
the pace of economic reform.  The economy had beco me more outward-oriented.  China encouraged 
Pakistan to continue macroeconomic reforms to improve domestic savings, productivity, and 
international competitiveness.  Trade between Chin a and Pakistan had increased rapidly in recent 
years.  Recent bilateral initiatives had set goals for future economic coopera tion and bilateral trade 
growth.  The China-Pakistan FTA, which had entered into force in July 2007, would help deepen and 
broaden their economic relationship.  Negotiations on trade in services commenced in April 2007 and were expected to conclude before lo ng.  In April 2007 they had signed  The Projects Implementation 
Regulation for the Five-Year Developm ent Programme on Economic Cooperation, another  major step 
towards wider, deeper, and higher trade and economic cooperation aimed at mutual benefit and 
common development.  China was Pakistan's third largest FDI source, and they had formed a Joint 
Investment Company in July 2007 to facilitate coope ration between financial institutions and to make  WT/TPR/M/193 
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  more effective use of their capita l markets.  As a member of the G20, G33, and Cairns Group, 
Pakistan played a unique role in pursuing the DDA’s development dimensions.   
43. The representative of Canada  commented on the valuable bilateral trade relationship with 
Pakistan.  Canada congratulated Pakistan for its  significant gains in per capita income, the ongoing 
liberalization efforts, and for collaborating closely with the international community to ensure the 
success of its economic reforms.  However, Canada had a number of concerns with Pakistan's trade policies.  It urged Pakistan to reduce the complexi ty of its overall tariff structure, in particular 
reducing the 15 specific tariff rate s and generally simplifying the 14 ad valorem  rates.  Regulatory 
duties on certain imports had recently become less tr ansparent;  Canada urged Pakistan to increase 
their transparency by opening th em to public scrutiny and eventual ly phasing them out.  Widespread 
tariff concessions and exemptions should be reduced and made more  transparent to improve overall 
economic efficiency.  Canada referred to a number of  deficiencies in trade mark protection and the 
overall enforcement structure of intellectual prope rty protection, as evidenced by increased piracy 
rates, and encouraged Pakistan to further bolster enforcement. 
44. Pakistan's investment regime faced a numbe r of challenges, including coordination and 
collaboration between regulatory bodies, duplication of requisite permissions, and difficulties in 
contract enforcement.  Recognizing the importance of foreign investment, Canada encouraged it to 
address these issues.  Canada also encouraged Pa kistan to continue reviewing and improving its 
practices and legislation on government procuremen t, which required transparent guidelines.  This 
would increase Pakistan's attractiveness for foreign in vestment and enhance ec onomic development.   
45. The representative of Hong Kong, China
 noted the increasing bilateral trade with Pakistan.  
Hong Kong, China appreciated Pakistan's high incidence of ad valorem  rates (99.4% of tariff lines), 
high coverage of bound tariffs (98% ), and reduced applied tariff averag e.  However, applied rates on a 
number of products, such as poultry meat and welded st ainless steel pipes, had been raised to protect 
local industry against surging imports.  Also the generally large gap between Pakistan's average 
applied and bound rates undermined  predictability, and Hong Kong, China looked forward to further 
improvements in Pakistan’s tariff regime under th e current market access negotiations.  It noted 
Pakistan’s strong support under the DDA to clar ify and improve the WTO Agreements on Anti-
Dumping and on Subsidies and Countervailing Measures.  Hong Kong, China shared Pakistan’s observation that most trade remedies were used for protection and needed to be subjected to stronger 
disciplines to reduce the risk of abuse.  Pakistan  was commended for its continued efforts to align 
national with international standard s and was encouraged to align all of them  to facilitate trade. 
46. Hong Kong, China believed that continued efforts to liberalize services trade would assist 
Pakistan’s economic growth and sustainable de velopment.  It commended Pakistan’s reform 
initiatives to liberalize and privatize financia l and telecommunications services, which had 
successfully attracted foreign investment, enhan ced banking and insurance efficiency, and improved 
telecommunications services.  This demonstrated th e benefits of trade liberalization.  Hong Kong, 
China encouraged Pakistan to liberalize other monopolistic services and to reduce the number of 
state-owned-enterprises.  It also encouraged Pakist an to bring its GATS commitments in its next offer 
into line with its more liberal de facto  regime, particularly for financial and transport services, and to 
table this as soon as possible.  Pakistan had not yet made any commitments in transport services nor 
tabled any offer in the logistics sector;  their li beralization could help Pakistan to establish the 
extensive transport infrastructure essential for eco nomic and social development, and Hong Kong, 
China urged Pakistan to make subs tantive commitments in these services. 
47. The representative of Chinese Taipei
 noted Pakistan’s huge economic potential, as indicated 
by its annual average growth in bilateral trade.  Pakistan’s impressive economic growth was mainly 
due to its relatively open trade and investment regi mes.  While this general policy orientation was 
welcomed, Pakistan needed to take steps to furt her remove elements still impacting negatively on WT/TPR/M/193 
Page 12  
 
  trade and investment.  Large gaps between ap plied and bound rates afforded Pakistan ample 
opportunity to raise the applied rates, as was done  recently, thereby reducing predictability.  In 
addition, while FDI in Pakistan rose significantly ov er the review period, the latest rankings on FDI 
performance and potential still showed it at be low the UNCTAD average.  Also, Pakistan’s 
privatization programme se emed to have slipped behind schedule, and bolder steps could be needed to 
reduce the substantial role of state-owned enterprise s.  Pakistan should make concrete liberalization 
commitments in the DDA;  it was one of the few Members clearly signalling intentions to improve 
market access commitments in several key servi ces sectors, like financial and telecommunications 
services. 
48. The representative of Australia
 noted Pakistan’s progress since its last Review, especially its 
strong economic growth driven by growing FDI re inforced by the ongoing privatization programme.  
As a Cairns Group partner, Australia appreciated  Pakistan's commitment to improved agricultural 
trade, which was demonstrated by its lower average agricultural tariff protection and its active role in 
the DDA negotiations.  Pakistan's ongoing liberalization of services had assisted its economic growth. Australia welcomed indications that it would cont inue to open services to international competition 
and that new market access would be reflected in its revised Doha Round offer.  It encouraged 
Pakistan to undertake further trade liberalization.   Democracy and the rule of law were vital for 
Pakistan’s peace, prosperity, and stability, and Au stralia looked forward to a new government being 
formed to maintain market confidence. 
49. The representative of the Republic of Korea
 referred to expanded bila teral trade relations with 
Pakistan.  Korea appreciated Pakistan’s trade liber alization efforts since its last Review,.  Customs 
procedures and government procurement had been impr oved, and the protection of  IPRs strengthened.  
However, Korea saw room for improvement.  Ma ny export assistance schemes, including export 
subsidies targeting textiles and garments, had increased in recent years and could complicate 
Pakistan's trade regime and undermine fair trade.  Korea asked Pakistan to enhance transparency by 
notifying export subsidies to the WTO, which had not been done since its last Review.  There was 
also a growing trend in initiating anti-dumping inves tigations to protect domestic industries.  This 
could significantly undermine trade, and Korea urged Pakistan to take a prudent approach to initiating 
such investigations.  While Korea appreciated Pa kistan’s regulatory and institutional reforms to 
improve procurement, it felt transparency could be  enhanced.  Korea encouraged Pakistan, though a 
non-signatory to the GPA, to comply with interna tional standards to ensure fair and transparent 
bidding practices.  The use of discretionary refere nce prices had sometimes resulted in friction with 
importers and delayed clearance.  Korea sought an  elaboration from the Pakistani delegation on any 
plans to address this issue and to enhance the tran sparency of customs procedures.  It encouraged 
Pakistan to strengthen enforcement of IPR legislat ion, given the widespread distribution of pirated 
products and prevalent trade mark infringements, such as pirated mobile phones.   
50. The representative of Chile  noted that bilateral trade, although limited, had grown 
continuously over recent years.  The trade balance was heavily in favour of Pakistan, mainly due to 
textiles.  Pakistan had made considerable progr ess in liberalizing trade and investment regimes, 
which, although incomplete, had set it on the path of  reform and had started to be fruitful.  Trade 
liberalization should continue to enhance industrial competitiveness.  Chile agreed that Pakistan 
should further diversify its markets beyond the traditional ones of the EC and the United States, and invited it to explore and intensify trade contacts w ith Chile and the region.  Chile and Pakistan, both 
active Members of the G-20 and the Cairns Group, shared many multilateral positions, such as on 
NAMA. 
51. The representative of Argentina
 was encouraged by Pakistan’s extraordinary GDP growth, 
due partly to more prudent macro economic policies and fiscal austerity  to reduce the budget deficit, as 
well as broad reforms.  Pakistan  had taken a number of measures to deregulate, privatize, and 
liberalize the economy, and was now more outward or iented.  Nonetheless, Pakistan had some major  WT/TPR/M/193 
 Page 13 
 
 
  economic, macroeconomic, structural, and social cha llenges to meet if growth and poverty alleviation 
were to be sustained.  Greater macroeconomic stability and further related reforms, including 
improved business and investment environments, c ould become important factors in Pakistan’s 
growth.  Further trade and investment liberaliza tion as well as other structural reforms could also 
contribute to productivity and improved internati onal competitiveness.  Argentina shared with 
Pakistan many Doha Round objectives, particularly those related to development, as members of the 
G-20, especially in trade facilitation and rules,  as well the Round’s more general objective of 
resolving multilateral imbalances and other areas of discrimination faced by Pakistan and other 
developing countries.  Economic and trade relati ons as well as bilateral cooperation had increased 
between the two countries.  An Economic Coopera tion and Trade Agreement was signed in 2002, 
which also included a Memorandum of Understa nding signed between respective Chambers of 
Commerce in May 2005, and in agriculture signed in December 2006. 
52. The representative of the United States  appreciated the challenging times facing Pakistan 
during its political transition.  The United States plac ed high priority on its strategic partnership with 
Pakistan and their trade relationship, both as a ve hicle for Pakistan’s and the region’s economic 
development as well as a means of enhancing bilatera l ties and the global trading system.  Pakistan 
had experienced significant economic growth, partly due to improved economic policymaking 
grounded in efforts to integrate Pakistan further globally.  Poverty had fallen; however, income inequality had widened slightly and rural poverty remained high.  FDI had grown substantially.  
Pakistan had opened further to foreign investors,  and benefited from greater investment in the 
banking, telecom, and IT sectors.  The United States remained Pakistan’s largest foreign direct 
investor.  The United States urged Pakistan to ensure all investors’ contracts were honoured.   
53. Pakistan had liberalized trade policies in  several important areas including customs 
procedures, overall tariff protection (the av erage applied MFN tariff was around 15%, down from 
20% in 2002), and tariff bi ndings.  It also continued to take no ticeable steps to improve enforcement 
of intellectual property rights.  However, book piracy , weak trade mark enforcement, lack of data 
protection for proprietary pharmaceutical and agricu ltural chemical test data, and pharmaceutical 
patent protection remained serious barriers to trad e and investment.  The United States urged Pakistan 
to further strengthen its protection and en forcement of intellectual property rights. 
54. Bilateral merchandise trade had grown. Pa kistan had experienced some economic 
disappointments during the Review period.  Trade liberalization had slowed and the privatization 
agenda had stalled.  Increased government invol vement in the economy had burdened the federal 
budget and created considerable market inefficien cies.  Production and export support had risen as 
had monopolistic activities of state-run companies.   While Pakistan’s economic fundamentals had 
improved, persistent structural weaknesses had rais ed the costs of doing business with Pakistan, 
thereby impeding productivity and competitiveness.  It could best address these by reducing political 
uncertainty and continuing trade liberalization and other productivity-boosting structural reforms to 
promote economic diversifica tion and sustained growth. 
55. Pakistan was encouraged to become an observer to the Agreement on Government 
Procurement.  The provisionally adopted text of the GPA had been extensively amended and included 
many features that made it better suited to modern procurement.  As Pakist an updated its procurement 
system it could benefit from the rules developed through the experiences of other WTO Members.  The United States also encouraged Pakistan to submit its 2005 new and full subsidies notification to 
the WTO for review.  New, meaningful market access  in services, industrial goods, and agriculture in 
the DDA could further enhance Pakistan’s opportuniti es to broaden and diversif y exports, particularly 
with emerging markets.  Pakistan had, despite ma ny challenges, made great strides in its economic 
reform, and the United States urged it to continue  these in pursuit of open and liberal policies. WT/TPR/M/193 
Page 14  
 
  56. The representative of Singapore
 referred to developments in its  bilateral trade and investment 
relationship with Pakistan, which was helped by Pakistan’s relative political stability and more 
friendly market policies.  FTA negotiations had be gun in 2005, and most outstanding issues had been 
resolved;  the comprehensive Pakistan-Singapor e FTA was expected to cover goods, services, 
investment, government procurement, customs, a nd e-commerce.  Singapore welcomed Pakistan’s 
further opening to trade and investment, aimed at  raising economic efficiency, competitiveness, and 
export-led growth.  These policies had paid divide nds via impressive real GDP growth and falling 
unemployment.  However, Pakistan still faced many  challenges such as poverty, income equality, and 
external trade deficits.  While it had liberalized, there was scope for improvement in tariffs, services, 
investment, and the use of anti-dumping measures. 
57. The representative of India  noted areas of concern such as the Pakistan’s low level of tax 
collection, narrow basket of exports, low agricu ltural productivity, and regional imbalances.  As 
Pakistan’s population was growing at 4.3% a nnually, the likely increased food consumption from 
improved living standards required improved agricultural productivity.  Reforms to improve tax 
administration were also vital as only 1.5% of the population were registered tax payers;  the uneven 
tax burden discouraged large manufacturing and in  turn denied economies of scale.  A thoroughly 
revamped investment-friendly tax structure was a key requirement.  Textiles and clothing accounted 
for two thirds of Pakistan’s exports, and it was excessively dependent on a few markets and 
vulnerable to being graduated from GSP schemes.  Export diversificati on was a key priority.  Pakistan 
also needed to examine some measures that appeared non-WTO compliant, including excise tax 
concessions favouring local content; import concessi ons subject to specified requirements; GST 
provisions that discriminated against imports; and compulsory reprint rights for books.  India was 
particularly concerned that IPR violations appear ed widespread, and enforc ement needed significant 
strengthening;  India encouraged Pakistan to rectif y this situation.  Pakistan had made commendable 
procedural improvements in customs administration but needed to improve enforcement to discourage 
clandestine trade.  India’s experience was that a simplified tariff structure with fewer rates greatly 
improved customs clearance and reduced transaction cost s.  Pakistan had a larg e number of tariff rates 
and the surprising rise in the number of domestic tari ff peaks seemed a step in  the wrong direction.   
58. Bilateral trade remained relatively small.  A major constraint was Pakistan’s continued denial 
of MFN status to India, with Indian exports restricted to a Positive List of 1,802 products.  India believed Pakistan’s restrictive trade regime with  India sharply reduced the mutual benefits from 
bilateral trade and prevented the complementaritie s of the two economies from being realized.  It 
urged Pakistan to reconsider its trade policy regi me with India to conform to the GATT, and hoped 
that implementation of the South Asian Free Trad e Agreement from January 2006 would improve the 
situation.  Both countries had formed a Joint St udy Group to construct a road map for various trade 
issues, such as opening of bank branches; registrati on of GIs; development of infrastructure at border 
crossings; and establishing an optical fibre link.  
59. The representative of Israel
 expressed deep concerns with several of Pakistan’s policy 
instruments that appeared WTO in compatible.  In particular, Pakistan did not accord MFN treatment 
to Israel, banning all imports.  Israeli FDI was al so prohibited.  It sought explanations from the 
Pakistan delegation on how these measures conformed with WTO requirements on non- 
discrimination and whether it would withdraw them. 
60. The representative of Thailand  noted the friendly bilateral dipl omatic and econom ic relations.  
Pakistan's outward-looking policies and economic re forms had contributed importantly to increased 
bilateral trade.  It had coupled economic reforms with continued trade liberalization. Pakistan had 
unilaterally lowered tariffs to reduce the average ap plied MFN rate.  It had also bound 98% of tariff 
lines and eliminated all cases noted during its la st Review where applied rates exceeded bound 
commitments.  Pakistan had improved trade and customs procedures, including the 2005 launch of the 
Pakistan Customs Computerized System (PACCS).  While its planned full roll-out had slipped from  WT/TPR/M/193 
 Page 15 
 
 
  June 2007, it currently covered a bout 30% of overall trade.  Pakistan was not a heavy user of 
contingency measures.  Thailand appreciated Pakist an's recent notification indicating acceptance of 
price undertakings for five Thai firms on two produc ts (polyester yarns and fibres).  Pakistan had 
significantly privatized banking from a pre-dominantly  state-owned sector, with enhanced prudential 
regulations and higher profitability. Greater comp etition and deregulation in  telecommunications had 
augmented growth, especially in mobile services. 
61. Pakistan's success provided a good example of how developing countries adopting trade 
liberalization and other economic reforms benefite d from openness.  Additional reforms would further 
enhance performance.  Further export diversif ication was needed since Pakistan's exports  remained 
highly concentrated in textiles and clothing.  Pakist an’s tax refund and rebate  procedures for exporters 
could also be simplified.  Pakistan had seemingly in itiated plans to improve export diversification and 
reform tax rebates by revamping industrial and export policies and adopting a "Model Customs 
Collectorate" automatic rebate scheme pioneered in Karachi.  Thailand and Pakistan shared several 
multilateral positions, including as joint members of the G-20 and the Cairns Group, in agriculture, 
liberalization of mode 4 in services, rule-mak ing, and strengthened anti-dumping disciplines. 
62. The representative of Uruguay  indicated that the two countries shared multilateral views 
especially on agriculture, NAMA, and trade fac ilitation.  Uruguay agreed with agricultural 
liberalization in general but shared concerns on rice.  However, improved market access, greater 
predictability, and elimination of huge distorti ons in rice trade should benefit both Pakistan and 
Uruguay. 
63. The representative of Colombia  commented on Pakistan’s macroeconomic stability and 
micro-economic reforms, which ha d improved efficiency and promot ed diversification and export 
growth.  However, realizing its growth potential would allow it to increase its low annual per capita 
income.  Improved agricultural productivity would allo w labour to shift to industrial or service sectors 
where value added was higher.  Pakistan widely used tax exemptions and concessionary loans for 
protection, but these eroded the tax base and reduced  resources available to develop physical and 
social infrastructure.  Its trade policy was more  open and imports had risen, with associated trade 
deficits.  Remittances had helped  balance Pakistan’s external account.  The two countries shared 
many multilateral negotiating positions, such as in  NAMA, agriculture, and development, even 
though their bilateral trade was insignificant. 
64. The representative of Indonesia  was pleased that Pakistan had reduced the minimum amount 
of FDI in services, such as retailing and wholesali ng.  Nevertheless, Pakistan imposed specific 
regulations on retailing and wholesaling in big ci ties, especially on location, to avoid unfair 
competition between modern and traditional markets.   Indonesia agreed with Pakistan that market 
access gains for developing countries in the DDA should not be held hostage by the present 
distortions, and that such modalities on market acces s in all areas of the negotiations should not allow 
developed countries to delay liberalization.  The num ber of Pakistani tax payers remained "abysmally 
low", despite improvements in 2006/07.  Tax refo rms remained a Pakistani priority, and Indonesia 
requested more information. 
65. Pakistan’s general trade policy objectives remain ed those of reducing protection, achieving a 
more outward-oriented trade regime, increasing ma rket access for exports, and greater global 
integration.  It benefited from the EC's GSP sch eme, including special arrangements to combat drug 
production and trafficking, which during 2002-05 involved duty-free ac cess for all industrial items 
and certain agricultural products.  Indonesia sought  more information on how Pakistan used its 
influence with the EC to improve market access.  It also wished to know how Pakistan intended to 
deal with rising oil prices.  Most Pakistani provinces regulated agricultural marketing, which 
remained poorly developed.  Post-harvest losses of perishable products were around 30%, accentuated 
by inadequate infrastructure and transport faciliti es.  As agriculture was a designated government WT/TPR/M/193 
Page 16  
 
  priority, Indonesia requested clarification on Paki stan’s policy to raise agricultural productivity:  
whether it stressed infrastructure development or increased domestic support (price and non-price) for 
agricultural products or assisted farmers with inputs,  and if so what would be the acceptable level of 
protection. 
66. The representative of Turkey
 appreciated Pakistan’s trade liberalization, including improved 
customs procedures, reduced overall tariff protec tion, increased tariff bindings, and strengthened 
IPRs.  Remaining problems to be addressed incl uded the considerable gap between the bound and 
applied rates, which reduced predictability, some do mestic taxes that discriminated against imports, 
imposition of regulatory duties in addition to tariffs , the complex tax system, and the strong state 
involvement in trade.  Turkey encouraged Pakistan to  further reform these areas so as to improve the 
transparency and predictability of its trade regi me.  Pakistan pursued greater world integration 
through unilateral, bilateral, re gional, and multilateral initiatives.  Multilaterally it was trying through 
the DDA to minimize imbalances adversely affect ing trade opportunities for developing countries.  
Pakistan considered regional trade liberalization to be complementary to multilateralism, and was 
party to many regional arrangements includi ng the Economic Cooperation Organisation (EGO) , 
Organisation of Islamic Conference, and D-8, in which Turkey was also member.  He referred to 
investment and trade ties by, inter alia,  indicating a number of bilate ral arrangements, including on 
transport, energy, agriculture, and the defence industry. 
67. The representative of Tunisia  emphasized Pakistan’s considerable efforts in pursuing 
economic, trade, and investment liberalization, and in diversifying its trade and economic relations 
with major trading partners.  The economy had been  vastly reformed to b ecome more efficient and 
open, including in telecommunications, finance, ta xation, and trade facilitation.  Reforms also 
involved the legal framework with the promul gation of new legislation, such as on budget 
responsibility;  dispute settlement, involving invest ment and competition;  and the establishment of 
three major initiatives for trade facilitation to improve the customs clearance system and all 
procedures affecting international trade, leading to better international practices and setting up of a 
master transport plan.  Pakistan’s impressive econom ic growth reflected mainly its relatively open 
trade, especially in customs clearances, protection (including tariffs), and intellectual property, and 
investment regimes and other structural reforms, as well as its macroeconomic policies.  Nonetheless 
Pakistan faced many reform challenges.   
68. The representative of Norway  referred to Pakistan’s con tinued economic reforms based on 
privatization, de-regulation and liberalization, accompanied by transparency measures and good 
governance.  GDP growth and reduced unemploymen t demonstrated Pakistan’s economic success.  
Remaining challenges included rising inflation, th e need for further poverty reduction, and income 
inequality.  Pakistan remained an attractive FDI dest ination, largely due to removal of barriers, which 
triggered a rise in FDI in essential services, such as telecom (Norwegian telecom firm, Telenor, had invested some US$1 billion), and in financial servi ces.  However, for this positive FDI trend to 
continue it was imperative that domestic political ri sk and uncertainty be managed.  Pakistan had 
benefited considerably from trade liberalization:  customs procedures had been streamlined, tariffs cut 
and bound, and IPR protection upgraded;  all were welcome improvements.  Concerns remained in 
some areas, for example, support for production and exports.  Pakistan pursued a parallel course of negotiating free-trade agreements as a complement to the multilateral track. Norway and other EFTA 
Member had started discussions to investigate how trade and investment rela tions could be expanded 
for mutual benefit.   
69. The representative of Nigeria
 indicated that his country was committed to enhancing trade 
relations with Pakistan, also a D-8 member, especi ally in agriculture, pharmaceuticals, textiles, and 
energy services.  Pakistan had liberalized trade and investment since its last Review, such as 
simplifying customs procedures, reducing overall tariff protection, increasi ng tariffs bindings, and 
strengthening IPRs;  it has also introduced prudent m acroeconomic policies, including fiscal restraint.   WT/TPR/M/193 
 Page 17 
 
 
  Pakistan had fully opened most sectors to FDI and w as one of the most liberal in the region.  It had 
pursued liberalization under difficult economic, soci al, and political circumstances, despite daunting 
domestic and external challenges.  Agriculture re mained the backbone of the economy, but due to 
poor productivity Pakistan was a major food importer.   Given high rural poverty, agriculture had been 
linked to food security and rural development.  Paki stan had played an important role in the Doha 
agriculture negotiations though its G-20 and G-33 memb ership.  It had unilaterally reduced tariffs, 
eliminated import prohibitions on textiles and clothing, and liberalized services.  Remaining challenges to sustainable growth and poverty alle viation included a distorting tax and tariff system, 
narrow production and export base, infrastructure bottlenecks, weak governance, and political and 
security uncertainties.  However, Pakistan's economic fundamentals remained bright, provided 
macroeconomic stability and micro- economic reforms were sustained. While its future economic 
performance depended partly on worl d economic growth, Pakistan need ed to improve efficiency to 
benefit from increased market opening s and other related opportunities. 
70. The representative of Costa Rica
 noted the critical challenges faced by Pakistan and 
congratulated it for the structural reforms achieved in recent years to open the economy and promote 
growth.  Costa Rica welcomed efforts in the areas of  taxation, deregulation, a nd privatization, and in 
reforming border controls and trade facilitation.  D espite insignificant bilateral trade the two countries 
shared many multilateral positions, including in trad e facilitation, NAMA, agriculture, development, 
and in defending the rules and the principles of the multilateral trading system. 
71. The representative of the Philippines  indicated that Pakistan was an important member of the 
G33,  Cairns Group, and the G20.  Bilateral trade had more than tripled since the last Review.  Over 
50% of Pakistan's applied tariffs were 10% or less. WT/TPR/M/193 
Page 18  
 
  V. REPLIES BY THE REPRESENTATIVE OF PAKISTAN AND ADDITIONAL 
COMMENTS 
72. The representative of Pakistan
 welcomed Members’ appreciation of Pakistan’s improved 
economic and trade environment since its last Revi ew.  He referred to the discussant’s points that 
improvements were needed in the areas of infrastru cture, cost of doing business, education and 
training, indicating these were high government priorities.  A number of major infrastructure projects 
had been planned or initiated, such as the "Nati onal Trade Corridor" aimed at revamping the whole 
transport sector, including ports, roads, railways, a nd aviation.  New infrastructure projects and major 
trade facilitation initiatives would reduce Pakistan’s costs of doing business.  Several major initiatives 
had been taken to structurally reform the edu cation sector, such as to achieve universal primary 
education and adult literacy, improve the quality of education, and to focus on technical and 
vocational education.  Higher education had receive d greater funding.  While "regulatory duties" of up 
to 100% on certain imports were possible, such hi gh duties had never been applied.  Currently only 
three items were subject to regulatory duties;  wax paper and sugar at 10% and carbonless paper at 
5%. 
73. Pakistan’s bound tariffs were well above applie d tariffs and had slowed the pace of tariff 
reforms since 2002-03 for several reasons. First, due to deep tariff cuts during 1997-02 it was felt that 
a period of stabilization was necessary to allow local  industries to adjust, and so as not to adversely 
affect tariff revenues.  Second, tariff rates were  being reduced through a series of bilateral and 
regional trade negotiations.  Third, the differen ce in bound and applied rates could not be addressed 
due to delayed DDA outcomes and multilateral libera lization.  However, the introduction of a zero 
tariff rate in the 2007-08 Budget show ed that reforms were continuing.  Pakistan expected the ‘water’ 
between applied and bound rates to be eliminated or  substantially reduced by the application of the 
Swiss Formula in the DDA. 
74. The Intellectual Property Organization (IPO) was formed in April 2005 to integrate all types 
of IPRs under a common legislative framework and to  provide a single, consistent, primary source of 
policy advice.  The framework was modernized to in ternational standards.  New rules on patents were 
published in December 2003 and on trade marks a nd copyrights in 2004.  Draft legislation for 
protecting plant variety rights was in the final stag es.  Enforcement had also been strengthened.  
Countering copyright and trade mark violations  had become the responsibility of the Federal 
Investigating Agency (FIA), dist rict police, and customs authorities.  Anti-piracy cells had been 
established at all international airports to more eff ectively prohibit pirated goods.  Imports or exports 
infringing copy rights, patents and trade marks we re prohibited.  Customs could detain, seize or 
confiscate illegal imports or exports, and tough acti ons had resulted in major seizures, arrests, and 
closure of piracy operations. 
75. While Pakistan was not a member of the Plurilateral WTO Agreement on Government 
Procurement its public procurem ent practices had been reformed.  The Public Procurement 
Regulatory Authority (PPRA) was established in 2002  to regulate procurement of goods and services.  
The government procurement framework was based on international best practices.  Open competitive 
bidding applied to contracts above Rs. 100,000 and direct tendering was allowed only where no 
advantages were envisaged from competitive bidding.  Pakistan had been urged to submit its revised 
services offer and in particular to make commitments in  transport, insurance, and financial services;  it 
was considering making commitments in the transport sector and improvements in the insurance, 
finance, and other sectors.  Pakistan’s its initia l offer had made mode 1 commitments in 25 sub-
sectors and more were intended.  Its delayed WTO agricultural notifications were mainly due to 
difficulties in collecting national data.  Long-standing  notifications had recently been submitted to the 
WTO.  WT/TPR/M/193 
 Page 19 
 
 
  76. The discussant  observed that Pakistan had substantially reformed and liberalized since its last 
Review.  However, there was scope to improve certain areas, such as high tariffs, including 
addressing the large gap between applied and bound ra tes, and the use of a large number of rates;  
import related measures, including the use of im port bans on a WTO Member;  export taxes and 
export subsidies;  services, including increased comm itments in cross-border (mode 1) supply and for 
greater coverage of activities, such as in transpor t and logistics, as well as reducing foreign equity 
limits across various sectors;  anti-dumping measures;  local-content requirements;  IPRs, including violations and enhanced enforc ement; and government procurement,  including improvements in the 
procurement regime, and for Pakistan to become  an observer to the Agreement on Government 
Procurement.  Concerns existed on the influential ro le of SOEs in the economy, in particular with 
such monopolistic activities reducing competition an d contributing to economic inefficiency.  
77. If Pakistan was to fully harvest the dividends from its recent economic and trade liberalization 
it should urgently address issues relating to domestic stability.  This would help provide the requisite 
stability for foreign investment, wh ich was necessary for economic growth and development, and for 
reducing unemployment and poverty.  Pakistan faced many key challenges and problems;  the 
Government recognized these and was tackling them head on. 
78. The representative of the European Communities
 referred to Pakistan’s 2004 Public 
Procurement Rules, which, according to Pakistan written responses, did not allow any discrimination 
on the basis of nationality except where any procuri ng agency decided to limit such participation to 
national bidders only or prohibit pa rticipation of bidders of some nationalities in accordance with the 
policy of the Federal Government.  She sought clar ification on the criteria applied by procurement 
agencies when deciding to limit or prohibit particip ation to national bidders or prohibit participation 
of others.  She also sought clarification on the c overage of export taxes/regulatory duties, especially 
on whether such duties applied only to wheat and non-ferr ous waste or also to exports of hides, skins, 
and leather goods.  The EC appreciated Pakistan's si ncere efforts to reduce levels of corruption, but 
further efforts were needed.  It welcomed the est ablishment of the Financial Monitoring Unit in the 
State Bank of Pakistan. 
79. The representative of the United States  looked forward to receiving answers to its questions 
on Pakistan's plans to pass legislation to protect agai nst the unfair use of test data.  The United States 
appreciated Pakistan's commitment to improve the c limate for IPRs, as well as its willingness to work 
with stakeholders in developing legislation to protect against the unfair use of test data.  She  
encouraged Pakistan to avoid delays and see thr ough the further changes needed to reaffirm its 
commitment to a strong IPR regime.  Pakistan was al so urged to consider becoming an observer to the 
Government Procurement Agreement. WT/TPR/M/193 
Page 20  
 
  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
80. This third Trade Policy Review of Pakistan has considerably improved our understanding of 
trade and related policy developments since 2002 and the challenges Pakistan faces in sustaining, and 
indeed improving, its economic growth.  I am grat eful to the Federal Minister of Commerce, Shazada 
Alam Monnoo and Ambassador Manz oor Ahmad and their delegation, the discussant, Ambassador 
Karen Tan of Singapore, as well as Members for contributing to the TPRB meeting's useful exchange 
of views.  Pakistan's response to the large num ber of questions is also much appreciated.   
81. Members expressed their regret over recent events  in Pakistan and the hope that these would 
not adversely affect Pakistan's economic developm ent and prosperity.  They commended Pakistan for 
its impressive economic performance, the decline in the unemployment rate, poverty reduction, its 
improved ranking in the UN Human Development Inde x, and for becoming a more outward-oriented 
economy.  They recognized that economic fundame ntals had improved, but also pointed to the 
challenges posed by the persistent structural wea knesses, low tax collection, current account deficits, 
lack of export diversification, and political uncer tainty.  Despite widespr ead praise for Pakistan's 
generally liberal investment regime and increased FDI inflows, certain Members expressed concern 
over persisting impediments, including procedural complexities. 
82. Members commended Pakistan's active role in th e multilateral trading system and particularly 
its contribution to the Doha Round negotiations, no tably to trade facilitation, NAMA, agriculture, 
services, and TRIPS areas.  Several Members noted Pa kistan's increased participation in regional and 
bilateral trade agreements.   
83. Although Members praised Pakistan's recent tariff-related achievements, they observed that 
its complex customs tariff and the gap between  average bound and applied MFN tariff rates cause 
uncertainty for its trading partners;  thus, they urge d Pakistan to simplify its tariff and reduce the gap.  
Certain Members commended the measures taken to improve customs automation and streamline customs procedures.  On the other hand, there we re some areas of concern, including customs 
valuation practices, the use of "regulatory duties" , anti-dumping measures, and certain types of trade 
restrictions, where Pakistan was encouraged to make improvements.  Certain Members expressed 
concern over the impact of export taxes and mu ltiple tax and non-tax incentives, with the latter 
possibly favouring local content.  Others urged Paki stan to notify its export and agriculture assistance 
schemes. 
84. Several Members commended Pakistan's effort s to strengthen protection of intellectual 
property rights, although concern was expressed over de ficiencies in certain areas (e.g., trade marks, 
patent protection, book piracy).  Some Members encouraged legislative amendments and further 
transparency in government procurement as we ll as reduced state-ownership in the economy. 
85. Several Members praised reforms in the financial and telecommunications sectors and 
encouraged Pakistan to further liberalize other services; some of them urged improved GATS commitments in certain services activities (e.g., transportation). 
86. This Review has been most informative and has afforded many useful insights into Pakistan's 
trade policies as well as the challenges it faces.  I would once again like to thank the Pakistani 
delegation, the discussant, and Members for contribut ing to an enlightening two days of discussions.  
We look forward to receiving Pakistan's responses to  outstanding questions within the next month. 
 
__________