Case Studies

Pakistan’s is primarily an agro-based economy, with the agriculture sector contributing around 25% towards GDP. Rice is the third-largest crop in terms of area in Pakistan after wheat and cotton, and in 2003-4 was grown on 2.46 million hectares. It is one of the key non-traditional export commodities of Pakistan. Pakistan enjoys a natural comparative advantage in basmati rice production, which has an assured market in several foreign countries where aromatic, long-grain rice is preferred.

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On 24 December 1998 the government of Pakistan received a Call Notice from the US government for consultation regarding the establishment of quantitative restraints on Pakistani exports of combed cotton yarn (Category 301). The basis of this was the allegation on the part of the United States that the exports of Pakistan were causing verifiable harm to the US textile sector. The legal grounds employed by the United States were the transitional safeguard measures sanctioned under Article 6 of the Agreement on Textiles and Clothing (ATC) of the WTO. This was the first time in the trade history of Pakistan that a case went through all the stages of the WTO dispute settlement mechanism. After the failure of bilateral consultations as the first stage of the case, Pakistan had to take the case to the Textile Monitoring Board (TMB) and finally to the Dispute Settlement Board (DSB) of the WTO.

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The economies of the Pacific island nations are among the most disadvantaged in the world today. These nations, composed of islands that are often little more than specks of land in the vast expanse of the Pacific Ocean, are at the forefront of concerns about countries being left behind in the current tide of global economic development. Of the three WTO member nations in the South Pacific (Fiji, Papua New Guinea and the Solomon Islands), Papua New Guinea is by far the largest. Part of one of the largest islands in the world, the country itself is around the size of California, but the contrast between their economies could not be greater. Papua New Guinea is classified by the World Bank as a least developed country, and 46% of its population of 5.3 million live on less than US$1 a day. It is difficult for impoverished countries like Papua New Guinea to participate fully in the global economy.

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From the mid-1970s onwards, Nigeria’s main trade policy instruments shifted markedly away from tariffs to quantitative import restrictions, particularly import prohibition and import licensing. As a reflection of this shift, Nigeria’s customs legislation established an import prohibition list for trade items and an absolute import prohibition list for non-trade items. While the trade list covers the full range of agricultural and manufactured products, the non-trade list relates to goods and services that are considered to be harmful to human, animal and plant health, as well as public morals. Typical examples of products which feature on this second list include weapons, obscene articles, airmail, photographic printing paper, base or counterfeit coins and second-hand clothing.

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When his company received a hefty order from a Swedish importer in August 2000, Prem Raj Tiwari rejoiced with much enthusiasm at a relatively big business deal. The single largest export order the company ever had for ayurvedic products — processed medicinal herbs — had strengthened his aim of reviving the company’s languishing export trade by cashing in on the flourishing world demand for herbal products. But Tiwari’s enthusiasm was soon dashed when he received an e-mail from his Narkayrd-based Swedish counterpart withdrawing the order. The mail stated that the company’s product samples did not pass the ‘satisfactory and sufficient’ sanitary and quality standard tests for access to the Swedish market. Moreover, Tiwari was astonished to learn of the requirement for a certificate of good manufacturing practices (GMP) for each consignment.

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In 1998 Nepal, in accordance with WTO procedure for accession, submitted a memorandum of its foreign trade regime. This was followed by the formation of the working party for Nepal’s accession to the WTO, and the government was engaged in follow-up activities to expedite the process. However, as in other developing countries, there was fear in certain sections of Nepalese society that it would be difficult for the country to face the challenges that might emerge in the aftermath of WTO accession. Furthermore, a sizable section of society took the view that accession to the WTO would result in adverse effects on the Nepalese economy, resulting in closure of domestic industries due to weaker competitive strength and in an increase in unemployment. There was also the problem that the WTO was not completely understood: the pains were well understood but the gains were not. Thus public opinion was not strongly supportive of the membership bid. Against this backdrop, a smooth accession could not be expected, and it was feared that there might even be domestic opposition.

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Initiating the accession to the WTO was apparently among the first genuinely independent foreign political moves by Mongolia in the multilateral arena. But, after decades of COMECON (Council for Mutual Economic Assistance) membership, the pragmatic, realistic and money-driven mentality of the GATT was not quite familiar to the Mongolians, including their negotiators, at the launch of Mongolia’s accession process. This lack of knowledge and understanding, coupled with a newly emerged private sector, led to a lack of political will to mobilize resources and stir a broad-based debate at national level so that the country as a whole could understand what the GATT/WTO accession could bring to the nation.

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After the coming into effect of NAFTA the Mexican rural sector and land tenure system were supposed to enter into a transition period of around ten to fifteen years, during which tariffs and quotas would be completely phased out. However, sensitive basic staples were protected under tariff-rate quotas (TRQs), to be progressively eliminated over ten years. In January 2003 most agricultural trade within NAFTA had already been liberalized and Mexico maintained TRQs for only three products: maize, beans and powdered milk — to be ended completely in January 2008.

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This two-country two-region case study offers a comparative illustration of how regional integration processes and regional negotiations affect the preparation for and participation of members in the WTO. On the basis of interviews with a range of key actors involved in the trade policy-making process at the national, regional and Geneva level, the study attempts to address some of the following questions: Does the regional dimension help countries to co-ordinate their positions at the WTO, or are national interests and non-regional alliances predominant? Do regional secretariats provide solid technical support and analysis to help member countries take positions on certain (overlapping) issues in the WTO? And is the preparation on WTO-related issues at the regional level a complement to or a substitute for national preparation? Has the increased attention and external (trade capacity building) support for regional integration and bi-regional negotiations also contributed to facilitate the analysis and formulation of positions at the WTO? Or, on the contrary, are the two levels of negotiation (WTO, regional) competing for limited domestic capacities and resources?

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Mauritius’ participation in the multilateral trading system and in various regional agreements reflects its interests as a small, export-oriented economy with advantages in a few products, sugar, textiles and clothing in particular. As part of its economic success is due to preferential market access granted by major trading partners, Mauritius is taking steps to adjust to changes in this international environment.

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