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Trade Remedy Laws of Pakistan

Trade Remedy Laws of Pakistan

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05/07/2012

 
TRADED REMEDY LAWS OF PAKISTAN UNDER THE WTO REGIME
I
NAAMUL
 
H
AQUE
&
 N
AEEM
 
U
LLAH
 
HAN
I.Introduction
Free trade among nations is perceived now-a-days, as the key to economic growth, peace and better standards of living, leading to a happier state of human existence ata global level.
1
 It is now widely recognized that “those countries that have chosen tomake trade a pillar of economic growth have, indeed grown more strongly and become wealthier than those which have a reliance on domestic markets behind the protective walls”.
2
The World Trade Organization (WTO)’s regulatory framework for international trade itself promotes free trade and accordingly affects the rightsand obligations of the business concerns.
3
 The WTO system seeks to help international trade flow as smoothly and freely as possible. Removing and lowering trade barriers, thus, is one of the key operationalobjectives of its system through which the trade, among nations is beingencouraged. Notwithstanding this it would not be entirely correct to characterize theWTO as a “free trade” institution. As a matter of fact the WTO provides for “systemof rules dedicated to open fair and undistorted competition”.
4
In order to protect the WTO member countries industries from unfair tradeconscious significant exceptions have been allowed to the principle of non-discrimination embodied in requirement of the MFN treatment.
5
These exceptionsmake it possible for any member to rise (which otherwise would be contrary to the
 
Inaamul Haque LL.M (Harvard), Distinguished Scholar/ Adjunct Professor Punjab University LawCollege, Former Exective Director World Bank, Advocate High Court. Pakistan.
 
Naeem Ullah Khan LL.M (Punjab) Lecturer Punjab University Law College, Pakistan.This article contains personal views of authors and do not necessarily reflect those of any Organization..
1
Views as to benefits of free trade owes much to the work of Adam Smith, (
 An inquiry into the Nature and Causes of the Wealth of Nations, 1776 
) and David Ricardo (on the Principle of Political Economy andTaxation, 1817). However, there are several eminent economists who do not entirely subscribe to such positive evaluation of the free trade. (See Krugman, Increasing returns, Monopolistic competition andInternational Trade, 1979, 9(4) Journal of International Economics 467). See I. Carr et al, InternationalTrade Law 2005, at 1xxxvii and see also J. Steglitz, GLOBALIZATION AND ITS DISCONTENTS(2002).
2
WTO, The Future of the WTO (2004) Report by the Consultative Board to the DG WTO.
3
I. Carr et al, R.K. Goupta supra note 1 at 1xxxvii.
4
WTO, Understanding the WTO, at 12.
5
It relates most Favored Nation Treatment which means favor one favor all.
1
 
MFN rule) barriers against products from specific countries and companies. Therelevant legal provisions in this regard are provided in the Agreement onImplementation of Article VI of the GATT 1994, the Agreement on Subsidies andCountervailing Measures and the Agreement on Safeguard Measures.This paper examines Pakistan trade-remedy laws enacted under the umbrella of theWTO system. These laws are intended to remedy hardships for Pakistani industriesresulting from the unfair actions and policies of foreign businesses andgovernments. The paper also inter-alia provides to the jurisprudence for “TradeRemedial Laws” with special reference to the case law found from different jurisdictions including that from the WTO. In Sections IX and XII somerecommendations have been proposed to improve the situation.
II.Rationale for Trade Protection Measures
One of the foremost objectives of the World Trade Organization (WTO) regime has been to liberalize the trade and help in globalizing the economies.
6
 To achieve thisobject Members were required to effect substantial tariff reductions in Uruguayround
7
and to remove quantitative restrictions on imports so that the trade couldflow without hindrance.
8
The free flow of the trade has, however, posed new challenges both fogovernments and domestic producers. Domestic producers face challenges of intense competition form more efficient producers from all over the world. Theymay export goods at far cheaper prices than those prevailing in the importingmarket and thereby threatens the very survival of domestic competitors. Obviouslyno government can let its domestic industry to die and allow its people to lose their livelihood. The WTO members therefore, have to find ways and means to protecttheir producers, while still remaining with the discipline of WTO.
9
The Agreements on trade remedy measures have been in fact designed to inclineMembers to open up their markets without undue fear of contingent damage as theycan take appropriate protective measures in a situation threatening their domestic producers and causing them any injury.
6
R. K. Gupta, Safeguards, Countervailing & Anti-Dumping Measures against Imports & Exports, 2003,p.2
7
Uruguay Round, (a place in Latin America) bought about the biggest reform of the world’s trading systemsince GATT was created at the end of 2
nd
World War. And yet, despite its troubled progress the UruguayRound did see some early results. Within only two years, participants had agreed on a package of cuts inimport duties.
8
See R.K. Goupta, supra note 6.
9
Id
2
 
III.
Trade Remedy Laws in Pakistan – A Preliminary Exposition
Pakistan has three trades remedy laws namely: Anti-Dumping Duties Ordinance,Countervailing Duties Ordinance, and Safeguard Measures Ordinance. These provide a system of defense against imports into Pakistan. These laws arefrequently characterized as “contingent protection laws” because the import relief is provided only under certain conditions.
Ever since the establishment of the WTO the principal objective of trade system isto prevent unfair trade practices in global economy and provide temporary remediesto the importing country in emergency or in exceptional circumstances
. Anti-dumping, Countervailing and Safeguard measures have been gaining increasingrelevance for industrialists and entrepreneurs in the multilateral trading system.These trade measures have a bearing on decision making by the exporters,importers and the domestic producers, in one-way or other.
 Anti-Dumping Duties Ordinance, 2000, seeks to give-effect to the provision of Article VI of the General Agreement on Tariff and Trade, 1994, and to theAgreement on Implementation thereof and amends and consolidates the law relatingto imposition of anti-dumping duties to offset the effect of dumping.Countervailing Duties Ordinance, 2001, gives effect to the provision of Article VIand XVI of the General Agreement on Tariff and Trade, 1994, and to the Agreementon Subsidies and Countervailing Measures.Safeguard Measures Ordinance, 2002, seeks to give-effect to the provision of Article XIX of the General Agreement on Tariff and Trade, 1994, and to theAgreement on Safeguards. This law provides for the imposition of safeguardmeasures in accordance therewith. It also provide a framework for investigation anddetermination of serious injury or threat of serious injury caused by productsimported into Pakistan and for matters ancillary thereto or connected therewith.
Administration of Trade Remedy Laws (TRLs)
Administration of TRLs has been assigned to the National Tariff Commission (NTChereinafter called the Commission) which is an autonomous body established in1990, under the Commission Act, 1990. The Commission administrates these laws,conducts studies, prepares reports and makes recommendation to the FederalGovernment on tariff protection to the domestic industry. The Commission, inter-alia, provides protection to the indigenous industry, helps in improving thecompetitiveness of the indigenous industry and promotes exports from Pakistan.
10
Administrated protection and procedural protectionism are two others terms for contingent protection.
11
R. K. Gupta, supra note 6 at 1.
12
Available at http://www.ktc.go.kr/en/forum/down/3%20KingLi_07.6.18.ppt
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