Why Pakistan needs to accede to the WTO Information

Technology Agreement (ITA)

Presentation byDr Manzoor Ahmad

7 October 2015drahmadmanzoor@gmail.com

• Till the 1960’s, Pakistan was amongst the first few to implement best practices through adoption of international conventions

• Now we are often amongst the last few• For example, in case of allowing 3G/4G technologies, Pakistan

did it in 2014 after 150 other countries had done it• This was despite a study to show that our GDP will gain Rs 380

bn and PRs 1,180 bn by 2020 • Additional tax revenue was estimated between PRs 23bn to

PRs 70 bn and employment of 900,000 jobs within five years

Pakistan’s declining competitiveness against other developing countries

Map of the ITA Participants

(https://www.wto.org/english/tratop_e/inftec_e/ita_map_e.htm)

Why join ITA?• Pakistan should become a part of globalized world Pakistan is now amongst 5 countries with the

highest import taxes on IT products Pakistan ranks at 151st position out of 192 countries

for Mobile Broadband Subscriptions per 100 Capita • For boosting productivity and innovation• For spurring economic—and employment—growth

Fixed Broadband Internet Subscribers (per 100 people)

Source: World Bank 2013

Why Pakistan needs to accede to ITA?

• Implementation of WTO Basic Telecom and Financial Services Agreements in 2003 by Pakistan resulted in attracting huge investment and increase in employment

• Performance in Information Technology remained poor compared to those developing countries which signed ITA

• Higher taxes on IT products Discourage connectivity Resulting in yearly GDP growth reductions of 1-2 percentage points

Pakistan’s fears are not real

• Loss of Rs 3.6 billion in customs duty will be neutralized in 2 years

• Countries which acceded to ITA experienced several fold increase in IT investment

• Higher tariffs do not increase chances of bringing more investment or protecting inefficient industries such as TIP Haripur

Average applied tariffs on IT products prior to the ITA

• Acceding to IT Agreement will bring major economic benefits

• It will bring more transparency and predictability

• Pakistan will be better integrated in global supply chain

• Customs duty loss will be compensated through reduction in smuggling and raising more taxes through higher GDP

Conclusion