National Tariff CommissionPakistan

“Current Situation and Prospect of Pakistan’s Application of Trade

Remedy Instruments”

Beijing, June 25-26, 2007

o Current Situation

o Current Situation in relation to China

o Prospects

Outline of Presentation

o Pakistan founding Member of GATT in 1947

o Pakistan signatory to the Final Act (Uruguay Round Agreements on Trade in Goods, Trade in Services, TRIPS etc, 1994)

o WTO Trade Defence Agreements implemented 2000 onwards

Pakistan and WTO

The Commission is responsible for administration of,

inter alia, the following statutes:

oAnti-Dumping Duties Ordinance, 2000

oCountervailing Duties Ordinance, 2001

oSafeguards Measures Ordinance, 2002

Functions of the Commission

Pakistan’s Trade Defense Laws strive for strict

conformity with respective WTO Agreements, i.e.,

oAgreement on Implementation of Article VI

oAgreement on Subsidies and Countervailing Measures

oAgreement on Safeguards

Compliance with WTO Agreements

6

o The Commission initiated twenty-four AD investigations and one safeguard investigation since 2002

o Imposed measures in nineteen cases

o Five AD investigations and the safeguards investigation were terminated without any measure

Implementation of Trade Defence Agreements: Actions by Pakistan

Implementation of Trade Defense Laws Actions Taken by Pakistan

Product Exporters from

Polyester Staple FibreThailand

Korea, Indonesia

Tiles China

Tinplate UK, USA, Italy, Germany and France

Formic Acid Finland and Germany

Pthalic Anhydride India

Polyester Filament YarnIndonesia, Korea, Malaysia, and

Thailand

7

Implementation of Trade Defense Laws Actions Taken by Pakistan, continued

Product Exporters from

UFMC China

PVC ResinIran

Korea

Acrylic Tow Uzbekistan

Glacial Acetic Acid Taiwan

Sorbitol 70% SolutionFrance

Indonesia

Tinplate South Africa

Category AD Initiations AD Measures

Steel 6 1

Chemical 9 9

Others 9 9

Total 24 19

Pakistan’s AD activity follows the worldwide trend of steel and chemical products being targeted relatively frequently

Pakistan Anti-Dumping Activity

CategoryAD

InitiationsAD

MeasuresPercentage

Steel 844 593 70.26

Chemical 578 381 65.92

Others 1,516 901 59.43

Total 2,938 1,875 63.82

Source: WTO Website (Period - January 2005 to June 2006)

Worldwide Anti-Dumping Activity

o Comments on Application and Initiation

o Right to present information, including orally

o Comments on Preliminary Determination

o Hearing upon request

o Comments on Statement of Essential Facts

o Meetings with interested parties with adverse interests

o Access to public file

Investigation: Opportunities provided to Interested Parties

o Reply to the Exporter’s Questionnaire

o Request for Individual Dumping Margin

o Price undertaking

o Disclosure Meetings upon request

Additional Opportunities for Exporters

Determinations may be made on the basis of facts available only when an interested party:

o refuses access to or does not provide information within a reasonable period, or

o significantly impedes the investigation

Provisions of Annex II of AD Agreement are observed while making a determination on the basis of “Facts Available”.

Determination on basis of “Facts Available”

o The Commission conducts “On the Spot investigations” for:

oDomestic Industry (before initiation of investigation)

oExporters/Foreign Producers

o Purpose of visit is to verify information provided in application/questionnaire response

o Sufficient advance notice is given

o Report on verification takes into consideration the comments received thereon by the subject party, and

o Non-confidential version of report placed on public file

On the Spot Investigation

Throughout the investigation, the Commission keeps all interested parties informed of the developments in an investigation through:

o Notices and Reports

o Public File established and maintained in each investigation

Transparency

Notices published in national newspapers, official Gazette and also sent directly to all known interested parties.

These Notices include:

o Notice of Initiationo Notice of Preliminary Determinationo Notice of acceptance of Price

Undertakingso Notice of Final Determinationo Notice of Termination of Investigation

Transparency

o The Public File contains all documents (non-confidential) including application, notices, reports, comments and correspondence with interested parties and other related documents.

o The public file is open for inspection to all interested parties.

o All notices and reports of determinations are voluntarily posted on the Commission’s website: www.ntc.gov.pk

Transparency

o Appellate Tribunal (Pakistan)o Any interested party can file an

appeal against a final determination made by the Commission

o Dispute Settlement Body (Geneva)o The government of exporting country

may approach the DSB to challenge the inconsistencies of a measure with the WTO Agreements

Appeal against Determination

Outline of Presentation

o Current Overall Situation

o Current Situation in relation to China

o Prospects

o The Commission has so far received five anti-dumping complaints relating to PRC exporters

o Three complaints did not warrant formal applications

o Anti-dumping measures were imposed in two cases after following due process

Applications received in relation to PRC exporters

Anti-Dumping Cases Relating to PRC Exporters

Product YearProcedure Followed

Result

Urea Formaldehyde Moulding Compound

2005 Due process under the domestic legislation followed

Anti-Dumping measure imposed

Ceramic Tiles 2006Due process under the domestic legislation followed

Anti-Dumping measure imposed

The Commission defended the following in domestic Courts in anti-dumping investigation relating to dumped imports of Tiles.

o Sixty-Six writ petitions in the High Court

o Two appeals in the Supreme Court

o A complaint filed before the Federal Tax Ombudsman

Due process followed by the Commission upheld. 2

2

Trade Defense LawsLitigation in Domestic Courts

Outline of Presentation

o Current Overall Situation

o Current Situation in relation to China

o Prospects

oExisting and emerging tariff regime

oGrowth in imports

oGrowth in domestic and export demand

oThe Antidumping Agreement

Prospects

Applied Tariff Rates

5

10

15

20

25

Pakistan’s existing import tariff regime

NAMA negotiations and the shape of the emerging import tariff

regime• NAMA negotiations are seeking reductions

in tariffs and increase in bindings

• These negotiations are finding a focus around the “Swiss Formula”, viz:

• Issues under discussion include the formula coefficient and the speed of adjustment

Application of Swiss Formula to Pakistan’s Bound Rates

Bound Rates

a = 15 a = 20 a = 25 a = 30

5 3.75 4.0 4.17 4.29

10 6.0 6.67 7.14 7.5

15 7.5 8.57 9.38 10.0

20 8.57 10.0 11.1 12.0

25 9.38 11.1 12.5 13.6

30 10.0 12.0 13.6 15.0

40 10.9 13.3 15.4 17.1

50 11.5 14.3 16.7 18.8

55 11.8 14.7 17.2 19.4

60 12.0 15.0 17.6 20.0

70 12.4 15.6 18.4 21.0

75 12.5 15.8 18.8 21.4

100 13.0 16.7 20.0 23.1

02468

1012141618

10 15 20 25 30 35 40 50 100

Bound Tariff Rates

Tarif

fs a

fter N

AM

A

1520

Swiss Formula: Implications for Pakistan’s Bound Rates

Pakistan average bound tariff 54.6%

Pakistan average bound tariff 14.60%

Any reduction in import tariffs would likely increase imports

Increase in imports would cause industry to seek remedies

Year Imports Annual change %

2002-03 11,233 10.22

2003-04 13,037 16.06

2004-05 17,949 37.68

2005-06 25,357 41.27

2006-07(Jul-Dec)

14,930 17.76

(Million of USD)

Source: IMF - Direction of Trade Statistics

Pakistan’s Imports

Major Imports of PakistanMarch-July

2006-07 Share in per cent

Chemicals, incl Fertilizers 187.91 13.82

Machinery, incl Elect,

Transpt

414.26 30.48

Food 80.02 5.89

Paper,board and stationery 13.53 0.99

Art Silk Yarn 10.49 0.77

Iron, steel and manufactures

thereof

67.52 4.97

Non-ferrous metals 20.01 1.47

Petroleum & petroleum

products

306.15 22.53

Other 259.13 19.06

1,359.03 100.00

Source: Economic Survey of Pakistan 2006-07

1996-97 2005-06 2005-06

(%age of total)

United States 1,291 1,532 6.04

EU 2,589 4,166 16.43

China 576 2,349 9.26

Japan 1,239 1,633 6.44

Indonesia 114 684 2.69

Malaysia 652 732 2.89

Korea 325 655 2.58

Saudi Arabia 707 2,819 11.12

U.A.E 615 2,620 10.33

Kuwait 900 1,264 4.98

Others 3,123 6,903 27.22

Total 12,131 25,357 100

Millions of USD

Source: Direction of Trade Statistics, IMF

Pakistan: Direction of Imports

oPakistan current year GDP growth projected at 7 per cent

oMajor export markets, the IMF’s Advanced Economies, are expected to grow at 2.5 and 2.7 per cent in 2007 and 2008

oIMF projects the important export market of Developing Asia to grow at 8.8 and 8.4 per cent in 2007 and 2008

Growth in domestic and export demand

Exports from Pakistan1996-97 2005-06 2005-06

percent share

United States 1,551 3,979 24.80

EU 2,778 4,156 25.89

China 119 436 2.72

Japan 608 143 0.89

Indonesia 142 68 0.42

Malaysia 38 67 0.42

Korea 279 200 1.25

Saudi Arabia 245 355 2.21

U.A.E 434 1,256 7.82

Kuwait 32 77 0.48

Hong Kong 874 599 3.73

Others 2,221 4,715 29.37

Total 9,321 16,051 100

Millions of USD

Source: Direction of Trade Statistics, IMF

THANK YOU

Implementation of Trade Defense Laws Anti-Dumping Actions Taken by Pakistan

Product Exporters fromInitiation

Date

Preliminary

Determination

Final Determination

Anti-Dumping Duties

Polyester Staple Fibre

ThailandKorea, Indonesia

09.08.20060% to 8.33%

09.02.2007 0% to 10.26%

07-06-2007

Tiles China 27.03.20060% to 21.02%

30.11.200614.85% to 23.65%

30-03-2007

TinplateUK, USA, Italy, Germany and France

06.12.2005 Terminated

03.06.2006

Formic AcidFinland and Germany

08.09.200516.49% and 6.16%

09.03.200613.63% and 6.25 %

07-07-2006

Pthalic Anhydride India 11.08.200510.94%

13.02.200610.94%

26-05-2006

Polyester Filament

Yarn

Indonesia, Korea,

Malaysia, and

Thailand

12.05.20050% to 36.56%

12.11.20050% to 29.68%

17-03-2006

Implementation of Trade Defense Laws Anti-Dumping Actions Taken by Pakistan

Product Exporters fromInitiation

Date

Preliminary

DeterminationFinal Determination

UFMC China 12-01-20054.31% to 14.89%

18-07-20053.43% to 11.58%

19-11-2005

PVC ResinIran

Korea25-6-2004

31.06%

40.18%

26-10-2004

31.06%

40.18%

24-02-2005

Acrylic Tow Uzbekistan 16-3-200412.71%

13-08-2004

12.71%

10-12-2004

Glacial Acetic

AcidTaiwan 1-9-2003

13.77%

25-2-2004

13.77%

18-6-2004

Sorbitol 70%

Solution

France

Indonesia6-3-2003

96.50% & 91.12%

19-7-2003

96.50% & 22.26%

19-11-2003

Tinplate South Africa 26-2-200223.91%

22-7-2002

27.33%

26-11-2002

Imports From PRC

Year Imports (mlln $) Annual change (%)

1996-97 576 25.76

1999-00 451 (21.70)

2001-02 485 7.54

2003-04 958 97.53

2005-06 2349 145.20

2006-07 (Jul-Mar)

3298 87.20

Source: IMF Direction of Trade Statistics

Composition of Imports from PRC(July-December 2006)

Commodities Value (000 US$)

Percentage

Machinery 654,376 42.49

Iron and steel 90,050 5.85

Chemicals 162,446 10.55

Coal, coke and briquettes 55,656 3.61

Yarn & thread of synthetic fibers 90,752 5.89

Construction materials 40,840 2.65

Manufactures of non-ferrous metals 33,372 2.17

Tyres and tubes of rubber 39,284 2.55

Others 373,223 24.24

Total 1,539,999 100.00