ISLAMABAD, Dec 26: Commerce Minister Humayun Akhtar Khan said on Monday that Pakistan could designate farm goods as special products to provide protection to the local production against the cheap imports.

Addressing at a press conference here on Monday, the minister said the recognition of special products and special safeguard mechanism in the WTO ministerial conference, would now provide protection to sensitive crops of developing countries like Pakistan. This means that for certain products they could make less cuts and also in case there was any surge in import levels in their countries, they can apply certain restrictions.

It is expected that with the progress made, WTO members may be able to move the work at a much faster pace and achieve full modalities by April 2006 so that the Doha Development Round could be completed by the end of 2006.

“The early conclusion of the round is crucial for us. Not only it will substantially reduce or eliminate discriminatory practices but will also boost market access,” he remarked.

He said that presently exporters had to pay an average of over 10 per cent duty on exports to the US and Europe whereas most of our competitors enjoyed preferential rates either because they had FTAs with those economies or because they had least development country (LDC) status.

“Also our farmers suffer because of huge amount of subsidies paid to farmers in rich countries. Moreover, our skilled and semi-skilled people find it hard to move to other countries where they may be in demand because of labour shortages in those countries because of various kinds of restrictions,” he added.

Elaborating the outcome of the ministerial conference, the minister said that it would be ensured that a substantial amount of those export subsidies would be eliminated during the first half of the implementation period of the Doha Round — during the next 3 to 4 years. It was also agreed that other related distortions in developed countries such as subsidized export credits, insurance programmes, state trading enterprises etc., would also be brought under strict disciplines.

In case of domestic support, he said a basic structure of reduction formula was agreed. Under this formula, there would be three bands for reduction. The EU with the highest level of domestic support would cut the most while the US and Japan would fall in the second band and would be required to cut less than EU but more than any other country. Developing countries such as Pakistan which had no a little trade distorting programmes would be exempt from reduction commitments, he added.

In case of agriculture market access, progress had been very disappointing, he said.

He said that the conference agreed to adopt a so called Swiss formula. Pakistan’s proposal to have two coefficients, one for developed countries which should be 6 and another for developing countries which should be 30, received strong support from all developing countries.

If such coefficients are eventually agreed it would mean that tariffs on textile and clothing in the EU and US markets would be cut by more than 50 per cent. In fact, they would be cut to less than 6 per cent as against 12-30 per cent prevailing at present.

Mr Khan said it was agreed that all developed countries would provide duty free access for 97 per cent of products originating from LDCs. Accordingly, 3 per cent tariff lines which were likely to cover sensitive sectors such as textile and clothing would not be exempt from duty at present. Thus countries such as Pakistan would continue to enjoy level-playing field vis-à-vis our competitors, he added.

The minister said the progress in other areas such as Services, TRIPS, Trade, Debt and Finance, Trade and Transfer of Technology etc., was very limited.