Agri Course Contents

SCHOOL OF ECONOMICS AND MANAGEMENT

UNIVERSITY OF AARHUS

COURSE DESCRIPTION FOR:

2965/-66/: Public Economics of Agricultural Policy and CGE models

COURSE CODE NO: 2965 (5 ECTS) 2966 (10 ECTS)

COURSE NAME: Public Economics of Agricultural Policy and CGE-models

COURSE LEVEL: Elective masters level course

ECTS CREDITS: 5 + 5

APPROVED: Approved for the Spring 07 semester on 27 March 2007

SEMESTER FOR WHICH THE COURSE DESCRIPTION APPLIES: Spring 2007

REPLACES COURSE DESCRIPTION DATED: New

INTERVALS AT WHICH THE COURSE IS OFFERED: See course plan

FILLED IN BY: Knud Jrgen Munk

LECTURER: Knud Jrgen Munk

TEACHING LANGUAGE: English

FORM OF ASSESSMENT: Oral exam

EXAMINATION AIDS ALLOWED: None

NUMBER OF HOURS PER WEEK: see Teaching Method

ADDITIONAL INFORMATION:

The lectures and the training course will be given at University of Copenhagen.

Lecture notes are available at the start of the course and detailed overheads will be

available after each lecture. Tutorials will be organised at the University of Aarhus as

required. Documented expenditures for travel and accommodation up to 2.500 kr will

be reimbursed for each student.

At the end of the course there will be an oral exam with 30 min. of

preparation. Students may choose to be examined in only the first

(Lectures) or the first and the second (Lectures and Coursework) part of

the course and will receive ECTS accordingly. The exam will cover the

subjects covered during the lectures and the coursework, depending on

which parts of the course the students have followed.

Page 2





COURSE OBJECTIVES:

First, to provide an introduction to trade and public economic theory

required for Computable General Equilibrium (CGE) modelling.

Secondly, to use this theory to explain the evolution of agricultural policy.

Thirdly, to prepare students for CGE based policy analyses in ministries, in

research institutions, in private consultancy firms and in international

public administrations using as examples agricultural and trade policy

issues related to the evolution of the EU Common Agricultural Policy

(CAP).

The course provides both the theoretical basis for policy-analyses and

hands-on experience in the use of CGE models. More specifically, the

course provides a theoretical framework and computational tools for

evaluation of changes in agricultural policy. During the summer break

students, who have followed the full course, will be offered supervision in

writing a term paper using the CGE models made available during the

course to analyse agricultural and trade policy issues facing in particular

developing countries.

COURSE CONTENTS AND SUBJECT AREAS:

The course provides both the theoretical basis for analyses of agricultural

and trade policy issues, and hands-on experience in the use of CGE

models programmed in GAMS/MPSGE for this purpose.

The GAMS home page www.gams.com provides examples of economic

applications for which GAMS has been used.

The approach adopted is explained in Introduction to the constructions

and use of CGE models available on request from Knud Jrgen Munk,

[email protected]

REQUIRED COURSES:

Students are assumed to have a background in consumer, producer and

general equilibrium theory corresponding to an advanced undergraduate

course in microeconomics.

COMPLEMENTARY COURSES: A related course has been taught at UCL,

LLN. For information about key areas which will be covered in the course

Page 3





see

http://www.icampus.ucl.ac.be/claroline/course/index.php?cid=BIRA2105

TEACHING METHOD: The course consists of two parts: Lectures and

Coursework

Lectures: The lectures will cover relevant parts of Public economics and

Trade theory. Simulation results produced by CGE models, which

subsequently will be used during the coursework, will provide quantitative

illustrations of theoretical results. The lectures will also include a

description of the Evolution of agricultural policies in Europe starting in the

19

th

century and ending with the prospects for final dismantling of the CAP

at the beginning of the 21

st

century. There will be lectures for 6 weeks,

with 4 lectures a week starting March 22

nd

. There will at the start of this

part of the course be a short introduction to the coursework (see below).

Coursework: The students will be presented with a number of stylized CGE

models which have already been programmed in GAMS/MPSGE. They will

gain experience in how to use these models to simulate the consequences

of changes in government policies. The coursework consists of 20 hours of

classes (15.00-19.00, Monday to Friday, during the second or third week

of May). This part of the course requires the completion of 5 exercises.

The coursework will be undertaken in collaboration with Ismir Mulalic,

Head of Section, Statistics Denmark.

The lectures will be based on

Markusen, Melvin, Kaempfer and Maskus (1995), International Trade;

Theory and Evidence, MCGraw Hill

Knud J. Munk (2006), Tax-tariff Reform with Costs of Tax

Administration, Working Paper, Institute of Economics, University of

Aarhus (forthcoming International Tax and Public Finance)

Knud J. Munk (2006), On the rationale for the use of border taxes in

developing countries, Working Paper, Institute of Economics, University

of Aarhus

Gardner, B. L. (1992), Changing Economic Perspectives on the Farm

Problem, Journal of Economic Literature, Vol XXX, pp1165-1171

G. Tabilini (2003), Principles of Decision-making in the European Union:

An Economic Perspective, CESifo Economic Studies 2003 49(1):75-102

Page 4





European Commission, Directorate General for Economic and Financial

Affairs, (1994), EC Agricultural Policies for the 21

st

Century,

Rapporteurs: K. J. Munk and K. Thomson, European Economy Reports and

Studies No 4

and lecture notes and selected articles.

The following areas will be covered

1. The micro foundation for trade and public economic theory

2. Basic insights provided by neoclassical trade theory

3. Basic insights provided by optimal tax theory

4. Optimal tax-tariff policies in small open economies at different levels

of economic development

5. The emergence of the farm income problem in the course of

economic development and the policy response

6. Reform of the EU agricultural policy (the CAP)

7. Agricultural trade policy issues with special focus on EU-LDC trade

integration

The coursework will require familiarity with Brooke, A. et al. (2003)

"GAMS A User's Guide", www.gams.com

Markusen, J. R. (2002), "General-Equilibrium Modelling using GAMS and

MPSGE".

Rutherford, T. (1999), "Applied General Equilibrium Modelling with MPSGE

as a GAMS Subsystem: An Overview of the Modelling Framework and

Syntax", Computational Economics, 14, 1-46.

Notes documenting a number of illustrative CGE models programmed in

GAMS/MPSGE, which will be made available during the coursework.





see

http://www.icampus.ucl.ac.be/claroline/course/index.php?cid=BIRA2105

TEACHING METHOD: The course consists of two parts: Lectures and

Coursework

Lectures: The lectures will cover relevant parts of Public economics and

Trade theory. Simulation results produced by CGE models, which

subsequently will be used during the coursework, will provide quantitative

illustrations of theoretical results. The lectures will also include a

description of the Evolution of agricultural policies in Europe starting in the

19

th

century and ending with the prospects for final dismantling of the CAP

at the beginning of the 21

st

century. There will be lectures for 6 weeks,

with 4 lectures a week starting March 22

nd

. There will at the start of this

part of the course be a short introduction to the coursework (see below).

Coursework: The students will be presented with a number of stylized CGE

models which have already been programmed in GAMS/MPSGE. They will

gain experience in how to use these models to simulate the consequences

of changes in government policies. The coursework consists of 20 hours of

classes (15.00-19.00, Monday to Friday, during the second or third week

of May). This part of the course requires the completion of 5 exercises.

The coursework will be undertaken in collaboration with Ismir Mulalic,

Head of Section, Statistics Denmark.

The lectures will be based on

Markusen, Melvin, Kaempfer and Maskus (1995), International Trade;

Theory and Evidence, MCGraw Hill

Knud J. Munk (2006), Tax-tariff Reform with Costs of Tax

Administration, Working Paper, Institute of Economics, University of

Aarhus (forthcoming International Tax and Public Finance)

Knud J. Munk (2006), On the rationale for the use of border taxes in

developing countries, Working Paper, Institute of Economics, University

of Aarhus

Gardner, B. L. (1992), Changing Economic Perspectives on the Farm

Problem, Journal of Economic Literature, Vol XXX, pp1165-1171

G. Tabilini (2003), Principles of Decision-making in the European Union:

An Economic Perspective, CESifo Economic Studies 2003 49(1):75-102

Courses :-

(M.Sc One Year) Semester System

The 4 years B.Sc (Hons) Programme has been carefully designed to conform to the needs of the market based on national and international standards. Graduates of the programme will be able to pursue M.Sc Programme (additional one year) in Economics in the department as well as in the best and recognized institutions of Pakistan and abroad. The curriculum is adequately broad based to enable graduates to make suitable career choices. The Department will provide every possible moral and material assistance to students in their future pursuits of further education or employment.

M.Sc ECONOMICS PROGRAMME (ONE YEAR)

Course No

Core Courses

Cr.Hours

601

Advanced Microeconomic Analysis

4

602

Advance Macroeconomic Analysis

4

616

Mathematical Methods for Economists

4

617

Advanced Econometrics

4

618

Advanced Statistics

4

Optional courses:

Course No

Core Courses

Cr.Hours

603

Money and Capital markets

3

612

Poverty and Sustainable Development

3

615

Natural Resource Economics

3

614

Women and Development

3

605

Financial Economics

3

604

Development Policy

3

Specialization: 12 Credit Hours

(M.Sc One Year) Semester System

The 4 years B.Sc (Hons) Programme has been carefully designed to conform to the needs of the market based on national and international standards. Graduates of the programme will be able to pursue M.Sc Programme (additional one year) in Economics in the department as well as in the best and recognized institutions of Pakistan and abroad. The curriculum is adequately board based to enable graduates to make suitable career choices. The Department will provide every possible moral and material assistance to students in their future pursuits of further education or employment.

M.Sc ECONOMICS PROGRAMME (ONE YEAR)

Course No

Core Courses

Cr.Hours

601

Advanced Microeconomic Analysis

3

602

Advance Macroeconomic Analysis

3

616

Mathematical Methods for Economists

3

617

Advanced Econometrics

3

618

Advanced Statistics

3

Optional courses:

Course No

Core Courses

Cr.Hours

603

Money and Capital markets

3

612

Poverty and Sustainable Development

3

615

Natural Resource Economics

3

614

Women and Development

3

605

Financial Economics

3

604

Development Policy

3

Specialization: 12 Credit Hours

1. Industrial Economics Group

Course No

Core Courses

Cr.Hours

610

Principles of Industrial Economics

4

613

Economic Analysis of Industrial Projects

4

(B.Sc (Hons) Part-I) :-

Micro Economic Theory (Dr.Jehanzeb) Here we study economic problems at smaller, individual level which enables the students to understand the concepts of consumer behavior, production theory, Market Organization, General Equilibrium and Welfare Economics

Macro Economic Theory (Mr. Shafiquilah) Macroeconomics is the study of the structure and performance of National economies and of the policies that governments use to try to effect economic policies. The issues that macro economists address are also focused.

Mathematics for Economist (Mr. Naeem ur Rehman Khattak) In the subject we study the use of mathematical methods and techniques in an effort to construct rigorous and logical economic theories. The actual tools employed in this pursuit include algebra, calculus, Algebraic methods, set theory and other branches of mathematics relevant to Economics. The use of mathematics to economics enables the students to understand concepts that are otherwise not clearly comprehensible.

Basic Statistics and Pascal Methodology (Dr. Ijaz Majid): In this course students are given the Basics along with advanced statistical tools and techniques, generally used in analysing Economic data. Economics basically deals with both qualitative and quantitative information. This mass of information can only be better understood if properly analysed and quantified, which can only be done if the analyst/Economist has sufficient and sound background of analytic tools and Techniques. This can only be done if proper coaching is done with statistical techniques.

Public Finance and Monetary Economics (Dr. Mohammad Naeem): Public Finance deals with finances of the government. The main branches are public revenue, public expenditure, public debt and fiscal policy. Monetary economics deals mainly with the evolution, function and characteristics of money and its role and impact in the prevailing economic system. Alongside it also discusses functions and role of commercial and central banks.

(B.Sc (Hons) Part-II)

Econometrics (Compulsory) (Dr. Naeem-ur-Rehman Khattak) :This course deals with estimation and fitting of different regression models to economic data. The course mainly includes the topics of simple/multiple regression analysis, violation of basic assumptions, non-linear equation, generalized linear regression model and its applications, formulation and estimation of special models e.g. models with dummy variables simultaneous equation system, identification, ILS and 2SLS method for solution of simultaneous equation system.

GROUP I

Development Economics (Dr. Shahiryar) : The study of economic development is one of the newest, most exciting and most challenging branches of the broader disciplines of economics and political economy. This is a systematic study of the problems and processes of economic development in Africa, Asia and Latin America. It deals with the economics of contemporary, underdeveloped third world nations, varying ideological orientations, diverse cultural backgrounds, and very complex yet similar economic problems that usually demand new ideas and novel approaches.

Managerial Economics (Dr. Jehanzeb) : Managerial Economics basically deals with the application of economic theory and the tools of analysis of decision science to examine how an organization can achieve its aims or objectives most efficiently. So the basic emphasis will be on micro and macro economic theory and the tools of mathematical economics and econometrics. Students have to select one group out of two groups besides the subject of Econometrics, which is compulsory.

The Economy of Pakistan (Ms. Naila Nazir) : The course covers many sectors of the economy like Agricultural Sector, Industrial Sector, Economic Planning and Policies in Pakistan, its natural resources and geographical position, ideological structure, foreign debts, trade, transport and communication and problems faced by nationalized and privatized sectors.

Agricultural Economics (Dr. Muhammad Munir (visiting):The course being with a systematic introduction to the basic concepts and issues in economics as they relate to agriculture. The course focuses on gaining an understanding of the economic decisions made by consumers and producers. In part it also focuses on macroeconomic policy and how agriculture is affected by policy responses to business fluctuations.

International Economics (Mr. Zilakat Khan Malik) : International Economics deal with International Trade Theory, International Trade Policy, The Balance of Payments, Foreign Exchange Markets and Open Economy. It highlights the problems arising in the international trade, international capital movement, and the operation of multi- national corporations and risk of economic collapse.

The Economy of Pakistan (Ms. Naila Nazir) : The course covers many sectors of the economy like Agricultural Sector, Industrial Sector, Economic Planning and Policies in Pakistan, its natural resources and geographical position, ideological structure, foreign debts, trade, transport and communication and problems faced by nationalized and privatized sectors.

Agricultural Economics (Dr. Muhammad Munir (visiting):The course being with a systematic introduction to the basic concepts and issues in economics as they relate to agriculture. The course focuses on gaining an understanding of the economic decisions made by consumers and producers. In part it also focuses on macroeconomic policy and how agriculture is affected by policy responses to business fluctuations.

International Economics (Mr. Zilakat Khan Malik) : International Economics deal with International Trade Theory, International Trade Policy, The Balance of Payments, Foreign Exchange Markets and Open Economy. It highlights the problems arising in the international trade, international capital movement, and the operation of multi- national corporations and risk of economic collapse.

GROUP II

Economic Analysis of Project Planning & Management (Prof. Dr. Ijaz Majid) : If proper investment/programmes are to be carried out the subject of project planning cannot be overlooked. This subject basically tells us about the feasibility of investment projects. Projects are generally carried out both under the condition of certainty and uncertainty. This subject basically deals with different tools/techniques by which the student is enabled to analyse the feasibility of the project i.e. through financial analysis techniques generally used to prepare the feasibilities and pre-feasibilities of an investment project and finally to advise the govt., semi-govt. and NGOs that whether a particular study should be undertaken or not.

Human Resource Development (Mrs. Danish Alam) : Human Resource Development encompasses activities and processes which are intended to have impact on organizational and individual learning. Main emphasis will be on Education, Training and Development, Leadership Development, Better Subordinate Superior Relations, Career Planning and Development, Various Job Experiences, Development of Technology and Job Enrichment.

Economics of Marketing (Ms. Naila Nazir) : This subject encompasses various subject matters of marketing and its usefulness in Economic Analysis. Main topics are Marketing Environment, Marketing Segmentation, Consumer Buying Behavior, The Product, The Prices, Channels of Distribution, Retailing and Wholesaling, and the different promotional programmes.

Industrial Economics (Mr. M. Naeem) : The major thrust is the demonstration of how microeconomic theory applies to industrial markets. The course is aimed at students who are encountering the field of industrial economics for the first time. It focuses on the theoretical and empirical aspects of how structure of the organization and conduct affect economic performance and welfare.

Operational Research and Mathematical Programming (Dr. Naeem-ur-Rehman Khattak) : The subject will basically take into consideration the different types of programming techniques used for solving economics and mathematical problems. Emphasis will be on Linear Programming, Integer Programming and Non Linear Programming.

TRADE POLICY OF PAKISTAN

PAKISTANS STATEMENT ON THEMATIC ISSUES

25.01.2002

Mr. Chairman,

Let me begin by thanking you for helping us fix the

parameters of our response to the very pertinent and, if I may say so,

thought provoking comments and questions of the distinguished

delegates. The themes proposed by you are comprehensive and facilitate

an orderly response. I shall try to conform to the coverage as well as the

order suggested by you.

Fiscal Regime

2.

We have already highlighted the revenue imperatives of

Pakistan. We are acutely conscious of the narrow tax base as also the

temptation of ease of collection rather than a more fair and equitable

taxation system. We are trying to correct it. The specific measures being

taken by us are :

Wider application of the general sales tax (GST). Its share in

tax collection has gone up from 18% in Fiscal Year 1991 to

38% in Fiscal Year 2001. Our reliance on this form of

taxation is expected to grow in the coming years as we shift

to a genuine value added taxation (VAT) system.

Page 2

2

Continuous reduction in the rates of custom duties, coupled

with a fast track elimination of the exemptions regime.

The Income Tax Ordinance 2001 provides for a greater

transparency and predictability, does away with exemptions,

and checks evasion and avoidance. With the introduction of

this new tax law, we hope to be able to reduce the existing

high tax rates, and the multiplicity of taxes. All this ought to

contribute to greater revenue collection, and a stronger shift

away from taxes on trade.

Export Diversification

3.

The main constituents of our strategy for greater export

diversification and enhanced competitiveness are :

Going up the value chain through proper supply-chain

management and on-shore capacity development of the

exporting enterprises.

A focused programme for the development of small and

medium enterprises.

A large scale revamp of the physical and social infrastructure

through comprehensive human development measures and

greater private sector role.

Page 3

3

4.

It is our expectation that a sound macro-economic

framework, market based polices, and curtailment of the role of the state

will yield positive results for our export diversification and

competitiveness.

5.

Regarding terms of trade, quite frankly, we see little chances

of their improving in the present global economic scenario.

Debt Rescheduling

6.

The recently concluded Paris Club deliberations are expected

to provide the desperately needed relief on debt servicing. Pakistans

total outstanding external debt as of September 2001 was $ 38 billion, of

which $ 12.0 billion was owed to Paris Club creditors. In December 2001,

the Paris Club rescheduled/reprofiled the $ 12.0 billion external debt.

Two-thirds of the Paris Club debt was concessional in nature (ODA),

which was rescheduled for 38 years including 15 years grace period. The

non-ODA debt was scheduled for 23 years, including 5 years grace

period.

7.

With this debt rescheduling the Net Present Value of our

external debt is expected to decline by about 30 percent.

8.

Paris Club debt rescheduling has provided substantial fiscal

space and the Government will be utilizing this space to enhance

Government expenditure on social sectors, poverty alleviation

programmes, and on physical infrastructure. We believe that

Page 4

4

improvement in physical infrastructure and human capital will go a long

way in raising the countrys economic growth on a sustainable basis.

Role of State in Economic Activity

9.

Like several other friends we too have found the temptation

to dabble in one strain or another of socialism hard to resist; though it is

not sure if we did it out of commitment or compulsion, given the private

sector deficit in entrepreneurial skills, capital and management. In the

recent past we have made valiant efforts to drastically curtail the role of

the state in economic activity. This is evident in divesture, closure or

privatisation efforts in the services and manufacturing sectors. In

agriculture, too, our recently introduced reforms are aimed at minimising

the role of the State, whether it is the irrigation system, or fixation of

support prices, or subsidised credit, or procurement and storage of

grains. We also continue to encourage the private sector in provision of

physical infrastructure. We are trying to dismantle the last remaining

bastion of state monopoly in the Railways sector. Concurrently, we are

setting up regulatory authorities in sectors such as petroleum and gas,

power generation, insurance etc. Price controls have been virtually done

away with even in sensitive areas like motor gasoline etc. it is the Oil

Marketing Companies that fix the prices and not the Government.

10. Our economic revival programme will help trade

enhancement by putting it on a more competitive basis. Tariff reduction,

and the consequent correction of anti-export bias, withdrawal of

subsidies, stable exchange rate, and an effective elimination of rent

Page 5

5

seeking opportunities ought to put the fundamentals of our trade

endeavours on a more firm and sustainable footing. We also hope that

the macroeconomic and structural reforms will induce greater foreign

direct investment, particularly in export-oriented enterprises.

Investment & Privatisation

11. We have a favourable investment regime indeed the

Secretariat report describes it as one of the most open in the region. With

stability ensuing from reforms, we have high hopes of strong investor

confidence in Pakistan.

12. While there has been considerable progress, I have to admit

our privatisation programme has fallen short of our expectations. Narrow

domestic capital and entrepreneurial base coupled with external factors

such as sanctions etc, sheer enormity and complexity of the task, and

want of sufficient expertise combined to slow down the privatisation

process. The important thing is that we are pursuing it with a renewed

vigour. It is without doubt one of the important pillars of our economic

revival programme.

Multilateral Trading System

13. I have had the opportunity to reiterate Pakistans

unequivocal commitment to the multilateral trading system. We have

tried to honour our WTO commitments in letter and spirit, and if at all

there have been lapses, these have been due to capacity weaknesses

Page 6

6

rather than any intent to by-pass the WTO process. In our statements,

and in our written answers to the questions, we have tried to

demonstrate how closely we have followed the spirit of the WTO. The

Secretariat report recognises this at several places, particularly where we

have complied ahead of schedule.

14. Despite the measures we have taken WTO Council, WTO

Cell in the Ministry of Commerce, WTO focal points in each Ministry ,

collateral organizations in the Universities and the Chambers we are

more than conscious of our capacity limits. We are glad the capacity issue

figured prominently at the Doha Ministerial and we look forward to

working closely with the Secretariat in the matter of capacity building and

technical assistance.

15. Our concerns at any measures to undermine the multilateral

system have been repeatedly articulated.

Trade Facilitation

16. Pakistan has been pursuing trade facilitation in earnest. The

new Import Policy and Procedure Order is a step in this direction.

Simultaneously, there has been an extensive demystifying and debugging

of the banking, customs and port procedures. Documentation

requirements are being minimised. Pakistan is currently working on a

World Bank funded trade facilitation project for which UNCTAD is the

consultant.

Page 7

7

17. Pakistan, ofcourse, adheres to the MFN principle with such

exceptions as GATT permits. We would like to clarify that the duty

concessions agreed to with the European Union are applicable on an MFN

basis and our tariff bindings have already been notified to the WTO.

18. Questions have been raised about the registration of

importers. Although it is a routine measure where registration is almost

automatic, we would like to respond to Members concerns in a positive

manner. As soon as I get back home, we will see if we can do away with

this requirement.

19. On Customs Valuation we have made a request for relaxation

in respect of a few items which are subject to repeated malpractices. In

the meanwhile, we continue to adhere to the systems as embodied in the

Agreement on Customs Valuation.

Tariffs

20. A number of Member countries, as indeed the Secretariat,

have brought out the anomaly in respect of 91 items (8 digit HS code)

where our applied rates exceed the bound rates. At least part of the

explanation is in our determination to control tariff dispersion and the

annually diminishing bound rates did not coincide with our four slabs. In

any event we have already notified to WTO our rates, on about 80 of

these items, that will become effective 1

st

July 2002. In other words, on

most of these items our applied rates will reach the bound rates three

Page 8

8

years ahead of schedule. For the remaining items, we propose to take

corrective measures at the time of the budget.

21. Regarding regulatory duties I must confess we have, in the

past, used these as surrogate anti-dumping levies as we did not have a

working anti-dumping law. However, now the Customs Act has been

amended to take away the powers from the CBR to impose regulatory

duties. These duties can now be applied only on the recommendations of

the National Tariff Commission that under its Act is obliged to follow the

prescribed procedures and have open hearings where all interested

parties are present.

22. We have already submitted that we are rapidly dismantling

the entire exemptions regime and the remnants are expected to

disappear sooner rather than later. As already announced, our maximum

tariff rate (barring certain exceptions like automobiles and alcoholic

beverages) is to be capped at 25%. This would necessitate an

adjustment in the current four duty rate slabs (5, 10, 20 and 30 percent).

The four new slabs shall be announced in the forthcoming budget, when

we will see the desirability or otherwise of having zero as one of the four

duty slabs.

23. The National Tariff Commission Act is being amended.

Legislation has been drafted. Its principal function now will be to handle

the trade remedy laws. The laws that we are introducing on safeguards,

anti-dumping and countervailing are in conformity with provisions of

WTO.

Page 9

9

24.

We are a little disturbed on the issue, allegation if you will,

of import licensing. This is one of the subjects that we propose to discuss

in detail with the Secretariat. There is no import licensing requirement in

Pakistan and it appears to us that it is being confused with compliance of

certain health, safety and other requirements. We think we can clarify the

position. The same applies equally to standards, technical requirements

and SPS. Almost all of our standards are identical or similar to the

international ones and are certainly non discriminatory and in our view

reasonably transparent.

Government Procurement

25. Pakistan is not a signatory to the Agreement on Government

procurement but by no stretch of imagination does it mean that we do

not subscribe to the principle of fair competition and transparency. The

procedures are well known and documented in the Government

procurement manuals. There are stringent tendering requirements and

there are proper committees for bid evaluation and contract awards.

Recently, we have done away with price preferences that the public

sector agencies could provide for domestically produced goods.

Export Measures

26. In our Report we have particularly stressed the roll back of

subsidies on exports. We reiterate that there is no subsidy on export

finance, that duty drawback rates have been rationalized on an input-

Page 10

10

output co-efficient basis for which a professional body has been set up,

and that there are no freight subsidies or compensatory rebates. Exports

are of-course zero rated, which is a well accepted principle and duly

recognized by the relevant WTO Agreements.

TRIMS & TRIPS

27.

On TRIMS, we have accepted the decision of the CTG of

November, 2001 and are not sure what kind of clarifications and

assurances are being sought.

28. We are very conscious of our Intellectual Property Rights

obligations. We have no doubt that proper enforcement of intellectual

property rights is in Pakistans own interest in view of the obvious

implications for investment and creativity in Pakistan. As stated in our

report, we have amended the laws on copyrights, trademarks, patents

and industrial design and integrated circuits to make them WTO

compliant. The plant breeders rights legislation is at an advanced stage.

To provide for greatest synergy, integration and greater expertise, we

propose to set up the Pakistan Intellectual Property Rights Organization

that would bring under one umbrella the various agencies dealing with

intellectual property rights. Our objective, quite simply, is to ensure

better enforcement. We realise, of-course, our capacity weaknesses but

are determined to correct these in the shortest possible time.

Page 11

11

Sectoral Policies

29. In my submission on 23

rd

of January I had the opportunity to

dilate upon the agricultural sector reforms programme. These reforms

will particularly focus on market driven policies, curtailment of role of

public sector, and pro-poor targeting of subsidies. On export subsidies we

will ofcourse remain within the ambit of the Agreement on Agriculture.

30. There is no state monopoly of trade in Agricultural goods.

The Trading Corporation of Pakistan has an almost insignificant role in

the export of rice and cotton its involvement is largely there where the

buyer wishes to deal with a public sector agency.

31. As already reported a major initiative taken by us is to allow

intra-trade of agricultural products regardless of the domestic shortage or

surplus position. We expect positive results as by making the trade

regime more predictable private sector investments and marketing efforts

will be strongly encouraged.

Mr. Chairman,

32. A number of questions have been put on the services sector,

particularly in Banking, Telecommunications and Insurance. To be quite

candid, the intensity and speed of reforms in these sectors has left us

somewhat breathless. Creation of regulatory authorities, promulgation of

new laws, privatisation activities, a veritable army of consultants .... all

Page 12

12

this is bringing about rapid changes that are testing our administrative

and managerial capabilities to the hilt.

33. However, we have taken good note of the issues raised here

and the suggestions made. We will take a fresh look at our commitments

under GATS and try to be as liberal as our circumstances would warrant.

Mr. Chairman,

34. Allow me to thank, once again, all the Members who have

taken the trouble to study our Trade Policy. I hope through this

statement, as also our answers to the written questions, we have

satisfactorily addressed their concerns and provided the necessary

clarifications.

Mr. Chairman,

35. It has been a rewarding experience for our delegation to

have participated in this Review. But before I part company let us pause

for a moment and put two question to ourselves.

Has Pakistan, given its present economic levels, done

enough in terms of liberalisation?

Are these liberalisation efforts sustainable?

Page 13

13

36. While I will encourage every member here to objectively

evaluate these questions, I am tempted to share with you the kind of

thoughts that fail to escape us :

First, until such time as our export diversification efforts bear

fruit our comparative and competitive advantages are only in

textiles and agriculture. In both these product groups we

face strong barriers quota, anti-dumping measures, tariff

peaks and subsidies in our major markets.

Second, our trade liberalisation is beginning to erode our

domestic capacities in chemicals, in engineering and

electronic goods, in the automotive sector. The situation is

of-course exacerbated where some of the suppliers, and

importers, resort to unfair trade practices, including export

subsidies.

Third, for a variety of political and economic factors,

including the dismantling of tariff walls, there has been a

decline in domestic and foreign direct investment.

Fourth, market access is constrained by the proliferation of

regional and other preferential trading arrangements.

Page 14

14

Mr. Chairman,

37. Pakistans economic success, in the ultimate analysis, will

rely crucially on a major export expansion. Our economic revival

programme will succeed only if we manage to attract sufficiently large

investments, particularly in sectors where we have a comparative

advantage Textiles Agriculture and its derivatives, I.T. etc.

38. It is our sanguine hope, and I feel reassured by the

encouraging remarks that I have heard in this room, that this TPR will

recognise Pakistans endeavours as well as its limitations and induce,

particularly our major trading partners, to support Pakistans trade and

investment environment in a major way.

Agri Course Contents

Documents

Transcript of Agri Course Contents