RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/COMTD/RTA/M/3 
21 October 2009 
 
 (09-5208) 
Committee on Trade and Development 
Third Dedicated Session on Regional Trade Agreements  
 
 
 
NOTE ON THE MEETING OF 14 SEPTEMBER 2009 
 
Chairman:  H. E. Shree B.C. Servansing (Mauritius) 
  
A.
 ADOPTION OF THE AGENDA .........................................................................................................1  
B. CONSIDERATION OF REGIONAL TRADE AGREEMENTS .................................................................1  
(i) Status of the work of the Dedicated Session – report by the Chairman......................................1  
(ii) Closer Economic Partnership Agreement between Pakistan and Malaysia (Goods) 
(WT/COMTD/N/24, WT/COMTD/RTA/3/1, WT/COMTD/RTA/3/2) ..........................................2  
C. OTHER BUSINESS .........................................................................................................................5  
 
 A. 
ADOPTION OF THE AGENDA  
1. The draft agenda as contained in Airgram WTO/AIR/3412 of 31 August 2009 was adopted . 
B. CONSIDERATION OF REGIONAL TRADE AGREEMENTS  
(i) Status of the work of the Dedicated Session – report by the Chairman 
2. The Chairman  said that he wished to provide Members with an update on the regional trade 
agreements (RTAs) notified under the Enabling Clause that were to be considered in the Dedicated 
Sessions on RTAs of the Committee on Trade and Development (CTD).  
3. He informed the Committee that the Chile-Indi a Agreement would be considered at the 
4th Dedicated Session, which was tentatively scheduled to be held back-to-back with the last Regular 
CTD meeting of 2009.  The Secretariat had sent the draft Factual Presentation of the Agreement to the Parties, and had received comments from Chile.  Comments and data from India had, however, not 
yet been received and it was therefore unclear wh ether the Factual Presentation would be circulated 
by the end of September 2009, as had been envi saged.  Members would be kept informed of 
developments in this regard.   
4. He also recalled that he had previously men tioned that there were three RTAs involving 
non-WTO Members that had been notified under the En abling Clause, and that these would need to be 
considered by the CTD meeting in Dedicated Sessi on.  The three RTAs were the South Asian Free 
Trade Agreement (SAFTA), the India-Bhutan Ag reement and the Pacific Island Countries Trade 
Agreement (PICTA).  The Secretariat had requ ested data from all the Parties involved by 
10 August 2009, but very little had been received to date.  For SAFTA, only data from Bangladesh 
had been received.  Sri Lanka had requested more time  to provide its data.  No data had been received 
with respect to the other two Agreements.  The Secr etariat envisaged that the three Agreements could WT/COMTD/RTA/M/3 
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  be considered in a Dedicated Session of the CTD in May 2010, though this would depend on whether 
the Parties to the Agreements were able  to provide the data in good time.   
5. He next turned to the Pakistan-Sri Lanka Agre ement, which had been considered at the CTD's 
Second Dedicated Session on RTAs on 15 July 2009.  He said that a written reply from Pakistan to a 
follow-up written question from the EC had not yet been  provided.  Pakistan was, therefore, requested 
to provide the written reply as soon as possible.  The question and the reply could then be circulated 
to the membership, in line with the procedures agreed to by the CTD.   
6. The representative of Pakistan
 said that the follow-up ques tion from the EC asked when 
Pakistan would notify its RTAs with Iran and Maur itius.  He explained that Pakistan was in the 
process of negotiating a Free Trade Agreement (FTA) with each of these countries.  The Agreements 
would be notified to the WTO afte r the negotiations were completed. 
7. The representative of the European Communities  said that his delegation would revert to 
Pakistan for further clarifications, if necessary.  
8. The Committee took note  of all interventions. 
(ii) Closer Economic Partnership Agreement be tween Pakistan and Malaysia (Goods) 
(WT/COMTD/N/24, WT/COMTD/RTA/3/1, WT/COMTD/RTA/3/2) 
9. The Chairman  said that the Closer Economic Partnership Agreement between Pakistan and 
Malaysia entered into force on 1 January 2008.  The goods and services aspects of the Agreement were notified to the WTO by the Parties on 19 Febr uary 2008 under paragraph 4(a) of the Enabling 
Clause and under Article V:7(a) of the General Agr eement on Trade in Service (GATS), respectively.  
At the present meeting, only the goods aspects of  the Agreement – the notification of which was 
circulated in document WT/COMTD/N/24 – would be considered.  The services aspects of the 
Agreement would be considered at the 54
th Session of the Committee on Regional Trade Agreements 
(CRTA), scheduled for 15 and 16 September 2009.   
10. He said that the text of the Agreement, toge ther with its annexes and attachments, was 
available on the Parties' official websites.  The Factual Presentation on the Agreement – circulated as 
document WT/COMTD/RTA/3/1 on 30 June 2009 – had been prepared by the Secretariat on its own 
responsibility in full consultation with the Parti es, in accordance with paragraph 7(b) of the 
Transparency Mechanism for RTAs. Written ques tions and replies on the goods aspects of the 
Agreement had been circulated in document WT/COMTD/RTA/3/2 on 2 September 2009.  He 
proposed to organize the consideration of the goods aspects of the Agreement by giving the Parties, 
and then Members, the opportunity to provide any general comments.  Members would then turn to 
the specifics of the goods aspects of the Agreement using the Factual Presentation to guide the debate, 
after which they would consider the questions and replies document.  The Parties would subsequently 
have the opportunity to respond to any questions ra ised during the meeting, and to make any final 
comments. 
11. The representative of Pakistan  said that his delegation strongly believed in the rules-based 
multilateral trading system, of which transparency a nd predictability were the main pillars.  In this 
regard, he expressed his support for the Transpar ency Mechanism for RTAs.  Turning to the 
Pakistan-Malaysia Closer Economic Partnership Agre ement (PM-CEPA), he said that Pakistan and 
Malaysia enjoyed exemplary fraternal and cultural rela tions.  Pakistan was one of the first countries to 
have recognized Malaysia in 1957 and to have est ablished diplomatic rela tions with it.  The 
PM-CEPA was a comprehensive Agreement which aimed to establish a fre e-trade area through the 
progressive liberalization of goods and services tr ade and cross-border investment flows.  The 
Agreement also had the objective of establishing a transparent framework of rules to regulate trade  WT/COMTD/RTA/M/3 
 Page 3 
 
 
  and investment, and to enhance cooperation in economi c, trade and investment matters.  He cited in 
particular the benefits of customs cooperation in  facilitating trade and reducing the cost of doing 
business.  
12. He informed the Committee that Pakistan and Malaysia had eliminated or reduced tariffs on a 
substantial number of tariff lines, which corresponded to a significant amount of trade in goods.  Both 
countries had  maintained a list of highly sensitive pr oducts on which tariffs would not be reduced for 
the time being.  There was also an exclusion list wh ich would generally be ke pt outside the coverage 
of the Agreement.  The exclusion list included pr oducts that were linked to national security, the 
environment, and the protection of human, animal or  plant health and safety.  The list also contained 
products excluded for religious reasons.  Tariff lib eralization had begun with the implementation of 
the Early Harvest Programme, for which the base ra tes for reduction were the MFN applied duties on 
1 January 2006.  Liberalization was envisaged in stag es, with the first stage having begun in 2008.  By 
2012, more than 3,000 of Pakistan's tariff lines would be duty free.  The tariff lines retaining duties – with the exception of the 914 tariff lines included in the highly sensitive and exclusion lists – would 
be subject to progressive reductions.  
13. He said that cooperation between the customs ad ministrations of Pakistan and Malaysia was 
essential to reduce the cost of doing business.  In th is regard, the PM-CEPA contained provisions to 
harmonize customs procedures and prevent illicit tr afficking and information exchange.  In 
recognition of the importance of cooperation in  sanitary and phytosanitary (SPS) measures and 
standards to increase bilateral trade, the Agreement contained specific provisions in these areas.  The 
observation of intellectual property applications at th e international level had also been reaffirmed.  
He added that the concerned Ministries in both countries would work together to ease non-tariff 
measures (NTMs).  
14. The representative of Malaysia
 said that the PM-CEPA was an FTA between two developing 
countries, and was the first bilateral FTA signed between two Muslim countries which were also 
members of the Organization of the Islamic Conf erence (OIC).  The Agreement encompassed the 
liberalization of trade in goods, services and investme nt.  It also contained provisions on bilateral 
technical cooperation and capacity building in areas such as SPS measures, intellectual property protection, construction, tourism, healthcare and te lecommunications.  Pakistan was a growing partner 
for Malaysia in goods  trade and offered the potential of being a valuable partner in the services area.  
The implementation of bilateral commitments and ob ligations under the Agreement had been carried 
out smoothly by both Parties, and exporters in both countries had benefited.   
15. With respect to goods trade, the Parties would progressively reduce or eliminate tariffs on 
agricultural and industrial products.  By 2012, Mala ysia would eliminate import duties on 75 per cent 
of its tariff lines comprising 79 per cent of impor ts from Pakistan.  She said that bilateral trade 
between the Parties had grown by 30 per cent since the PM-CEPA had entered into force.  In 2008, Malaysia's exports to Pakistan that had benefite d from the certificate of origin stipulated under the 
Agreement were worth US$1.14 billion, which was a 72-fold increase in value terms compared to 
2007 exports.  A number of Malaysia's products – including palm oil, machinery, mechanical 
appliances, chemicals and  rubber thread – enjoyed preferential tariff treatment under the Agreement.   
16. Under the Agreement's bilateral technical cooperation and capacity building programme,  
Malaysia and Pakistan had agreed to work closely in the areas of t ourism, construction, healthcare and 
telecommunications.  For example, Malaysia had o ffered to share expertise and technical know-how 
in skilled training and certification and in the use of rubber bearings in the cons truction of buildings in 
earthquake-prone areas.  Pakistan would provide technical assistance in training academic staff in 
Malaysia's healthcare training institutions.  She sai d that negotiations on the PM-CEPA had taken into 
account the Parties' differing levels of development.  The Parties had agreed to focus on products of 
interest which were expected to gain substantia lly from liberalization.  The expected gains were WT/COMTD/RTA/M/3 
Page 4  
 
  expected to not only be short term in nature.  Long- term gains for the economy, and in particular areas 
such as technical cooperation, were also expected.  Furthermore, the Agreement provided both Parties 
the opportunity to review the concessions with the goal of broadening the cove rage in the future.   
17. The representative of the European Communities
 said that the substantially low coverage of 
the PM-CEPA, particularly in the case of Pakist an, demonstrated a certain lack of ambition and 
commitment by the Parties to enhance their bilatera l trade.  The  information presented in the Factual 
Presentation showed that 55.8 per cent of Pakistan's tariff lines, and 24.6 per cent of Malaysia's tariff 
lines, would remain dutiable after full implementation of the Agreement.  In terms of trade value, 
these exclusions represented 80.3 per cent of Pakistan 's total imports from Malaysia, and 20.5 per cent 
of Malaysia's imports from Pakistan.  When c onsidering the most traded products between both 
countries, a significant percentage remained dutiable.   The Parties were, therefore, encouraged to 
make further commitments in terms of tariff liberal ization, so that they could benefit from genuine 
trade enhancement.  He also invited the Parties to make use of Article 130 of the PM-CEPA, which 
provided for a general review of the Agreement.  In this regard, he asked the Parties for clarification 
as to whether a review would take place in 2009, as was originally scheduled.  He explained that the 
replies provided by the Parties in document WT/COM TD/RTA/3/2 were unclear on this point.  On the 
one hand, in response to question 10(i), the Part ies noted that they had plans to make further 
commitments in terms of coverage.  On the other hand, in the reply to question 3, they stated that they 
had no definite plans at this juncture to increas e the percentage of tariff lines subject to duty-free 
treatment.   
18. The representative of the United States  supported the comments made by the EC.  She said 
that her delegation appreciated that the present meeting was being held back-to-back with the 
54th Session of the CRTA.  This provided Members the opportunity to examine the PM-CEPA in its 
entirety.  The US believed that the presence of RTAs  experts in meetings to consider particular 
agreements – regardless of whether the agreem ents involved developing  countries, developed 
countries or a combination of the two – was helpfu l and allowed Members to make the best use of 
their time and resources.  
19. The representative of th e European Communities  said that his delegation had some follow-up 
questions to the replies that had been provided by the Parties in document WT/COMTD/RTA/3/2.  
With respect to question 7, he said that the Parti es had confirmed that concessions could be withdrawn 
if unforeseen or exceptional circumstances needed to be addressed.  He asked the Parties to define what was meant by "unforeseen or exceptional circumst ances" as well as to explain the procedure that 
would be followed under these circumstances.  On ques tion 8, the Parties had indicated that they were 
in the process of identifying NTMs, and that deliber ations would take place after the completion of 
this exercise.  He asked when these deliberations w ould take place.  With respect to question 9, the 
Parties indicated that they had implemented their r espective obligations under the Agreement.  In this 
regard, he asked whether they had complied with th eir commitments within th e agreed time-frames.  
Finally, with respect to question 15, he asked whet her the Parties could elaborate on the role of the 
SPS focal points and indicate how often regular c onsultations on SPS and technical barriers to trade 
(TBT) issues would take place. 
20. On the comments made with respect to the c overage of the PM-CEPA, the representative of 
Pakistan
 said that the Agreement had been notified under the Enabling Clause, and not under 
Article XXIV of the GATT.  There was no requirement in the Enabling Clause to eliminate tariffs on 
all goods.  However, more than 85 per cent of ta riff lines would be reduced or eliminated under the 
terms of the Agreement.  In his delegation's view, th is represented substantive trade liberalization.  He 
cited as an example the case of palm oil, which was not contained in the highly sensitive or exclusion 
list and represented approximately 60 per cent of Pakistan's imports fro m Malaysia.  He added that the 
Parties would continually review the product covera ge and further eliminate tariffs under Article 130 
of the Agreement.  With respect to the clarification sought by the EC on question 7, he said that the  WT/COMTD/RTA/M/3 
 Page 5 
 
 
  Parties had not defined the unforeseen or exceptional circumstances.  He noted, however, that 
Pakistan and Malaysia had not withdrawn any c oncessions through the intern ational economic crisis. 
The situation would, therefore, have to be acute fo r concessions to be withdrawn.  In order to deal 
with such circumstances, bilateral meetings and consultations would take place, and solutions would 
be reached by consensus.  With r espect to the clarification sought on question 8, he said that problems 
relating to NTMs needed to be raised with the re levant authorities in both countries.  While there was 
no immediate need to convene a meeting to addr ess NTMs, consultations could be held in 2009 on a 
date convenient to both Parties.  On question 9, he  confirmed that both countries had implemented all 
the concessions within the agreed time-frames, and indicated that the relevant notifications were 
available on the Parties' official websites.  Fina lly, with regard to question 15, he said that the 
Agriculture Ministries of both countries were the fo cal points on SPS issues and that they kept in 
contact with each other.  A framework had also been created to address SPS and TBT issues, as and 
when required.   
21. The representative of Malaysia  observed that close to 58 per cent of her country's tariff lines 
were duty free on a most-favoured-nation (MFN) b asis, and that Pakistan was benefiting from 
additional preferences under the PM-CEPA.  She em phasized that trade be tween the Parties had 
increased significantly since the Agre ement entered into force.  Finall y, she said that the Parties had 
put together detailed plans concerning SPS issues,  which would be addressed in the future as 
appropriate. 
22. The Chairman  said that the CTD's consideration of the goods aspects of the PM-CEPA had 
allowed Members to clarify a number of questions .  Oral discussion of the goods aspects of the 
Agreement could be concluded in accordance with paragraph 11 of the Transparency Mechanism for 
RTAs.  Further questions by delegations on the go ods aspects of the Agreement were to be submitted 
in writing to the Secretariat within one week, by 21  September 2009.  The Parties would then be given 
two weeks to submit written replies, by no la ter than 5 October 2009.  In accordance with 
paragraph 13 of the Transparency Mechanism, all written submissions as well as the minutes of the 
meeting would be circulated promptly in all WTO official languages, and would be made available on 
the WTO website. 
23. The Committee took note  of all interventions.   
C. OTHER BUSINESS   
24. No matter was raised under "Other Business". 
25. The meeting was adjourned . 
 
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