1. “IMPLEMENTATIONS OF GLOBALIZATION ON PAKISTAN’S ENGINEERING SECTOR”
LECTURE ON:
“IMPLEMENTATIONS OF GLOBALIZATION ON PAKISTAN’S ENGINEERING SECTOR”
BY:
Engr. M. Mazhar-ul-Islam
General Manager &
Convener, NESPAK WTO Cell

2. What is Globalization?
Globalization (Internationalization) means integration of economies, knowledge and culture across the globe
Natural outcome of rapid growth in information technology and faster means of communication
Enable rapid flow of capital and trade across the globe
Accelerated from second half of the 20th century
Part of the new economic world order
Emergence of Bretton Woods institutions namely the IMF, WB and ITO (GATT) in 1944 gave birth to modern theme of globalization
WTO is the latest instruments of globalization of economies

3. What is WTO: World Trade Organization – Geneva Based
GATT 1947 as provisional treaty till 1995
Renamed GATT in Uruguay Round (86-94)
Multilateral Trade Agreements among state/bodies – Import/Export
International Treaty Under UN Provisions
Subject matter of commerce and law
Documented Agreements- Framework, Specific, MFN exemptions, Annexes, Schedules

4. Objectives: Raising standards of living Ensuring full employment
Expanding production of goods and services
Sustainable development
Securing share in trade of developing and least developed countries
Designing reciprocal and mutually advantageous arrangement directed to substantial reduction of discriminatory treatment in international trade relation

5. Function of the WTO:
Facilitate implementation, administration, operation and further objectives
Provide forum for negotiations among members
Administer settlement of disputes under DSU
Administer Trade Policy Review Mechanism (TPRM) – Overseas national trade policy
Cooperation with IMF & IBRD and its affiliates for greater coherence in global economic policy making

6. WTO ORGANIZATIONAL STRUCTURE:
Director General
(WTO Secretariat)
MINISTERIAL Conference
General Council
Trade Policy Review Body
Dispute Settlement Body
Appellate Body
Dispute Settlement
Panels
Committee on trade & Environment
Council
Trade in Goods
Council
Intellectual Property Rights
Council
Trade in Services
Committee on
Trade in
Civil Aircrafts
Source: Ministry of Commerce

7. AGREEMENT ESTABLISHING THE WORLD TRADE ORAGNIZATION
LEGAL STRUCTURE OF WTO:
AGREEMENT ESTABLISHING THE WORLD TRADE ORAGNIZATION
Annex 1A:
Multilateral Agreements on Trade in Goods
Annex 1B:
General Agreement on
Trade in Services
Annex 1C:
Agreement on Trade- Related Aspects of Intellectual Property
GATT 1994
Agriculture
Annex 2: Understanding on Rules and Procedures
Governing the settlements of disputes.
Sanitary/Phytosanitary
Technical Barriers
Annex 3: Trade Policy Review Mechanism .
Investment Measures
Annex 4: Plurilateral Trade Agreements.
Anti-dumping
Custom Valuation
Civil Aircraft
Pre-shipment Inspection
Govt. Procurement
Rules of Origin
Dairy Products
Import Licensing
Subsidies/Countervail
Bovine Meat
Safeguards

8. AGREEMENT ESTABLISHING THE WORLD TRADE ORAGNIZATION
LEGAL STRUCTURE OF WTO:
AGREEMENT ESTABLISHING THE WORLD TRADE ORAGNIZATION
Annex 1A:
Multilateral Agreements on Trade in Goods
Annex 1B:
General Agreement on
Trade in Services
Annex 1C:
Agreement on Trade- Related Aspects of
Intellectual Property
Construction and Engineering
Distribution
Environmental
Financial
Health
Tourism and Travel
Communications
Recreation and Sporting
Business
Transport
“Other”
Copy Right
Trade Mark
Industrial Design

9. Membership: Original Members according to GAT 1994
(including Pakistan -23, now 148
MC accepts new members by 2/3rd majority
MC may impose any condition to new Members
A Member may withdraw from WTO by 6 months notice to DG-WTO

10. Principles of Trading:
Without discrimination MFN treatment
Freer- Progressive liberalization of barriers
Predictable – Trade barriers (tariffs, non-tariff
barriers etc) and market opening are “bound”
Increased competitiveness – discouraging
subsidies, anti-dumping etc
Special treatment to developing and least –
developed countries

11. Principles of MFN: MFN: Treatment no less favourable than
accorded to any other country without
discrimination in the application and
administration of import & export
Treatment to all members equally
Applicable to GATT, GATS & TRIPS

12. Principles – Anti –dumping:
Anti – Dumping: Measures against imports of a
product at an export price below its “normal value”
(usually the price of the product in the domestic
market of the exporting country)
Countervailing opposite to anti – dumping
Old practice to remove competitors
Pakistan case study – solution 70% from
France – Notice by National Tariff commission

13. Principles – Subsidies:
Undue benefit to producers to increase
competitiveness by lowering the price of a
product

14. Principles – Safeguard Measures
Permissible barriers to protect domestic
industry which may be damages due to
increased imports
10 years for developing countries and 6 years
for Developed countries commencing 1995
Open ended provision for countries less than
$ 1000 per capita GNP

15. Trade in Services- (GATS)
All measures affecting trade in services
- Measures: procedures, rules, law, decision
Exclude those services supplies in exercise of governmental authority – not on commercial basis
Supply of services in 4 modes
- Mode 1: Cross-border supply (e-commerce)
- Mode 2: Consumption abroad (tourism)
- Mode 3: Commercial Presence (Branch-office)
- Mode 4: Movement of natural persons (travel)

16. Importance of Const. Sector:
Oldest Activity in Human History
Fundamental for National Development
20% of the World Trade in Service Sector
51% of Pak GNP in Services Sector
80% of Budget for Development Projects
Single Sector of economic activities to generate maximum employment
Potential to grow lateral industries – Cement, Steel, Sanitary etc

17. Potential of Construction Sector:
PEC statistics as on June, 2004:
- 84,221 Professional graduate engineers
- 22,784 PEC Licensed Constructors
- 76 PEC Licensed Operators
- 1,016 PEC Registered Engineering Consultants
Individuals and Constructors acquired domestic as well as international experiences
PEC regulatory regime provide effective regulation for complete construction sector
Source: Pakistan Engineering Council

18. Analysis of WTO Regime:
Stated provisions demand Good Governance/Transparency
Individual’s gain – possible loss to country
Obstructions to developing countries
- Quality Standards
- Environmental Standards
- Technical Standards & Labour Standards
- International Engineer
- Visa restrictions/Political biases
- Repayment of debt (80% Interest)
(continued)

19. Analysis of WTO Regime:
Forced Trade for opening up; not Free Trade on Demand & Supply principles
WTO Regime is too complex and ever expanding encompassing all aspects of life
Legal documents are in the terminology and standards of developed countries
(continued)

20. Analysis of WTO Regime:
Negotiation is name of the game.
Require economical & quality products following western standards
Anti-globalization protests signifies deprivation of the poor
Developing countries will remain as consumer countries

21. IMPLECATIONS ON PAKISTAN:
Limited export- due to higher costs of Pakistani Products and restrictions
Increased Imports
Obstruction to self-reliance
Reduced Industrialization
Less Employment – 10% unemployment
GDP declines from 6% to 4%
54 countries poorer – UNDP
Loss of economic sovereignty

22. IMPLECATIONS ENG. INDUSTRIES:
Automobile Sector failed to meet the deletion programme to:
- Improve trade balance
- Become self –reliance
- Generate Employment
Further extension requested for 3 years upto
December 2006

23. IMPLECATIONS - ENG. EDUCATION:
Engineering degree are not recognized by the developed countries
More students will undertake education abroad
Business in education in the name of foreign universities will increase
Pakistani degree will be less attractive if rapid remedial measures are not taken

24. IMPLICATIONS – CONSTRUCTION SECTOR:
Due to weak Pak. Construction Sector – After Transitional Period:
- Foreign Constructors will increase
- Local Constructors will be subservient
- More Un-Employment
- Obstructions to self-reliance
- Reduced growth/capacity of const. sector

25. WHAT TO DO:
Form regional trading block among Muslim and third world countries
Liaise with Malaysia, South Africa etc. for creating pressure group
Accountability for non-preparedness in Pakistan
Up hold good governance, merits and Transparency
Investment policy – what is cost & conditions
Initiate domestic capacity building measures in selected sectors (Light Eng., Construction) on urgent basis
(continued)

26. What to do: Reduce costs of Infrastructures and margin of profits
Involve stake holders; Statutory bodies/Associations for their part of WTO regime
Re-model relevant education on International Standards
Accelerate research and development
Expedite domestic legislation conforming to Agreements
Increase Negotiation skills
Commit less-discuss more in WTO

27. Conclusions: WTO- an International compulsion
Wide gap between stated objectives and achieved results
Both opportunity and challenges
Pakistan should liberalize its market but not without reciprocity
Pakistan must initiate efforts to meet the challenges of WTO immediately to boost exports in WTO environment or otherwise

28. THANK YOU