Pakistan's federal Commerce Minister, Humayun Akhtar Khan said Monday, the WTO Geneva framework agreement will certainly help boost Pakistan's exports, particularly in the agriculture sector through elimination of export subsidies on farm products.

"Our dairy industry expects that if subsidies are totally eliminated, Pakistan would earn $ 2 to 3 billion per annum in the export of milk products only," Humayun Akhtar told a press conference here after returning from Geneva.

Similarly, he said, our cotton farmers would gain an estimated $300 million per annum, if the subsidies on cotton are fully eliminated by the rich countries who are spending around $ one billion per day on subsidies to their farmers.

The Commerce Minister said, Pakistan can also secure $ 200 million and $ 100 million per annum in export of rice and sugar, respectively, due to elimination of subsidies and opening up of markets under the WTO regime.

Humayun while giving details of the framework agreement said, it covers five areas including Agriculture, Non-Agricultural Market Access, Trade Facilitation, Development Issues and Services. He said, in the area of agriculture, it has been agreed to move towards a fairer and more market oriented trading system in the three known areas including export subsidies, domestic support and market access.

For export subsidies, the Minister said, it has been agreed that those would be eliminated in a phased manner by a certain date to be negotiated in the post July negotiations. Similarly it has been agreed that domestic support would be cut substantially through a tiered formula which would cut higher subsidies more steeply, he said, adding, these measures would only affect richer countries which dole out lavish subsidies to their farmers.

"We have enough cushion to support our farmers through de minimis programmes (which allows us to subsidize any crop up to 10% of its total value of production) as such programmes for subsistence and resource-poor farmers have been exempted as a Special and Differential Treatment for developing countries."
The Minister said, tt has been agreed that all trade distorting domestic support will be reduced through a tiered formula, adding, WTO members such as the EU having higher level of support will make greater over all reductions. As a down payment, there would be a reduction of 20% during the first year of implementation, he said, adding, there would be stronger monitoring mechanism to prevent any cheating or shifting of subsidies from permissible to non-permissible areas.
In the area of market access, Humayun said, the agreement calls for a substantial improvement for all products. Humayun said, developing countries will also have to lower their tariffs but as far as Pakistan is concerned, we would not be obliged to do any cuts because of the following reasons:

The cuts would apply from bound levels. Our bound tariffs are 100 to 150%. On the other hand, our applied tariffs (except edible oils) are less than 25%. Thus any cuts would not affect our applied tariffs.

Developing countries have been allowed to maintain certain products as Special Products. Such products would not be subject to any substantial cuts. In addition, we can designate some products as Sensitive Products and their number can be proportionally higher than those maintained by developed countries. We can have access to Special Safeguard Mechanism which we can use if there is any dumping of agricultural products.

Since Cotton suffers the most from agricultural subsides and livelihood of many African countries depends on export of cotton, it has been agreed that cotton subsidies will be handled separately but within the over all agriculture negotiations. These negotiations would be on a fast track basis, he added.

Commerce Minister, Humayun Akhtar Khan said, on the issue of Non-Agricultural Market Access (Industrial goods), significant cuts have been agreed. However, since many countries have preferential access to developed countries markets, they are insisting against any ambitious cuts, he said, adding, therefore, this area has been left vague and would need substantial work after the summer break with negotiations commencing in September/October.

Since Pakistan has already undergone significant tariff reforms, and except for textiles where its applied rates are also its bound rates, it has enough high bound rates to absorb any agreed cuts, he added.

The Minister said, till an agreement is finally worked out, it is not clear how ambitious the results are going to be in this area, adding, it has also been agreed to address non-tariff barriers.

On Singapore issues, Humayun said, it has been agreed that three out of four issues would be dropped from the Doha work programme and negotiations would only be held on Trade Facilitation. "Since we have already implemented various trade facilitation measures and moreover we are already working on new Trade Facilitation projects, we would not have to undertake any new major commitments beyond what we are doing ourselves," he added.

On the other hand, the Minister said, it would facilitate our trade especially our efforts to boost South/South trade where we face a lot of problems. Humayun said, on Development issues, it has been agreed to expeditiously complete the review of all the outstanding agreement-specific proposals for special and differential treatment submitted by developing countries.

It has also been agreed that there will be more effort by the developed countries to increase Trade Related Technical Assistance. The Minister said, certain smaller economies (other than LDCs) were insisting on special treatment for them. It was agreed to address their concerns without creating a sub-category among developing countries in the WTO, he added.

On Services, it has been agreed to intensify negotiations to open services markets, he said, adding, a new deadline of May 2005 has been set up for submission of improved revised offers. Pakistan is now in the final stages of making its initial offers, he added.

The agreement meets our objectives to a large extent, as there are ambitious provisions for elimination of agricultural subsidies, opening up of agricultural markets of richer countries and other certain things, to the benefit of Pakistan, the Minister maintained.

Humayun said, it is not likely that the original deadline of January 1, 2005 for completion of negotiations could be achieved, as the next Ministerial Conference will be held in December 2005 at Hong Kong to reach a final deal on WTO.
Pakistan played a very active role throughout the negotiations, as we took part in all the Mini-Ministerial meetings which helped move the process forward, he said, adding, the country's role was also appreciated by member countries. "We were part of major coalitions. For example, in case of Agriculture we were a part of G-20 Group which was coordinated by Brazil and had most other developing countries such as China, Egypt, Brazil, Mexico, etc.," he added.