Pakistan terms tariffs escalation in Australia as an obstacle for industrialization of developing countries:
During the trade policy review of Australia at the WTO on 5 March 2007, Pakistan termed Australia’s policies of tariff escalations detrimental to industrialisation thrust of developing countries. Pakistan also raised objection on Australia’s higher applied tariffs on textiles, clothing and footwear, which pose a challenge of competition to Pakistani exports against the imports from countries with similar level of socio-economic development indicators but enjoying preferential benefits.
Registering its concern on the stringent sanitary and phyto-sanitary standards in Australian market, Pakistan also urged Australia to reconsider its Visa control policy for equal treatment to all.
Written questions raised by Pakistan at this occasion are:
1. Paragraph 26 of the Secretariat report provides that the excise duty on domestic ethanol is rebated for the first 12 months. This concession is not allowed to the imported ethanol. Isn’t this a violation of Article III concerning National Treatment on internal taxation and regulation?
2. According to the Secretariat report (Paragraph 9), Australian tariffs on primary products are considerably lower than on semi-processed goods. Thus, tariff escalation constitutes a potential obstacle for industrialization of developing countries. Are there any plans to address this issue in the near future?
3. Although Australian applied MFN tariffs are low, there are more than 40% of bound rates currently exceeding applied MFN rates by at least 5 percentage points. Is Australia keeping this differential as a policy space for future adjustment?
4. Australia has limited imports of fruits and vegetables from most countries including Pakistan due to strict SPS rules and regulations. This restricts market access for Pakistan. Pakistan sent draft agreement on cooperation between Pakistan and Australia, which is under consideration of Australian Department of Agriculture. Could Australia let us know the procedures and time involved in entering into cooperation and accreditation agreements for various standards related issues? The delay caused in this process may oust some of the small exporting countries against the big exporters.
5. In their Services horizontal commitments, no equity limitation is recorded while in national treatment it is stipulated that at least two of the directors must be ordinarily resident in Australia even in case of 100% ownership in all sectors across the board. What is the rationale for such a limitation? Is there any time-frame for doing away with this?
6. Australia’s revised offer in Mode 4 of Services is appreciated as one in which efforts have been made to cover developing countries demands. The coverage states that market access recorded is to the extent of the list of gazetted occupations and their immigration website gives the lists, which include professional services covering most sectors, though not fully, as this is a positive list approach. However, the requirement of sponsorship as well as requirement of contract in their revised offer, made during the period under review, lack clarity. Both ensure that a temporary person has legitimate means of support and some one is responsible for the stay. In other words, a person in the possession of a valid job contract is as good as sponsored or vice versa. Would the Australian delegation explain the difference between a valid job contract that includes terms and conditions, salary package and duration of job and a ‘sponsorship’ in the context of a temporary service provider?
Written responses by Australia made available until now are as follows:
Question:
According to the Secretariat report (Paragraph 9), Australian tariffs on primary products are considerably lower than on semi-processed goods. Thus, tariff escalation constitutes a potential obstacle for industrialization of developing countries. Are there any plans to address this issue in the near future?
Answer:
Australia’s applied average tariff is 3.5%. For most sectors, tariffs are either zero or 5%. There are no plans to lower the 5% general tariff. The only escalation is between products which are duty free, and products subject to the general 5% tariff.
Of sectors where tariffs remain above 5%, Australia has legislated to reduce tariffs on automobiles, including components and parts, to no higher than 5% by 2010. In the case of textiles, clothing and footwear, Australia has legislated to reduce tariffs in this sector to no higher than 5% by 2015.
Question:
Although Australian applied MFN tariffs are low, there are more than 40% of bound rates currently exceeding applied MFN rates by at least 5 percentage points. Is Australia keeping this differential as a policy space for future adjustment?
Answer:
Australia has in place a legislated program of tariff reductions to 2015. The difference in bound and applied tariffs arises entirely from the continuing program of unilateral tariff liberalization undertaken by Australia. It is in no way reflective of my desire for “policy space”.
(Click here for full text of Pakistan’s statement)
