The Furniture Sector in Pakistan: Export performance and ... - TRTA i

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In case of developing countries, imports often take place on lower than the bound rates these are called applied rates which can be increased up to bound levels without consultation with anyone. Reduction of tariffs is an important aspect of trade liberalization. As a matter of fact rates of tariffs have been constantly coming down since the GATT became operational in 1948. Industrial countries’ tariffs in most of the traded items have fallen down to less than 4%. Such a significant reduction in tariff barriers has been very helpful for increasing trade. However, as stated above on many items of interest to developing countries, tariff rates remain relatively high e.g. textiles and clothing. Elimination of quantitative restrictions (Article Xl) Member countries are required to eliminate quantitative restrictions on imports and exports. There are, however, a number of exceptions to this rule. For example export restrictions can be applied on export of goods to prevent or relieve critical shortages, Article XI-2 (a). Implications for the furniture sector Exports Pakistani exports of furniture do not by and large, face significant non-tariff barriers in industrial countries’ markets. They mainly face tariff barriers that have also substantially come down. In other words, for the furniture sector of Pakistan the “market access” is not a problem as such. This indicates a great scope for increasing export in this item provided we have the right products at right prices. Imports • Combined effects of Articles II & Xl are that foreign furniture goods enjoy reasonable access to Pakistan’s market though our tariffs are relatively high (25%). • Pakistan’s exports have in fact better opportunities in markets of industrial countries on account of their comparatively lower tariffs. Transparency of Government regulations affecting trade (Article X) Members are obliged to publish relevant laws, regulations, administrative rulings of general application including those pertaining to the classification of the valuation of the products etc. Governments are also required to disclose their policies and practices publically within the country as well as by notifying the WTO. With a view to ensuring that members adhere to their obligations, their trade policies are periodically examined through a surveillance mechanism called the “Trade Policy Review Mechanism”. This examination of the trade policy and results becoming a part of public domain also contribute to greater transparency. Implications for the furniture sector • Transparency in government regulations, in Pakistan and abroad, helps in smoother flow of trade. It is “in essence due process guarantees and a partial shield against arbitrary government action”. 62 International Trade Centre
Trade Related Aspects of Intellectual Property Rights (TRIPS) Many countries entered into international agreements (non WTO) to protect creative ideas and new knowledge by giving the creators of these knowledge based assets (called “intellectual property rights”): • The right to prevent others from “using their inventions, designs or other creations 13 and, • To use this right to negotiate payment for their intellectual property (IP) rights. However, protection given to IPRs (by several international agreements) was found to be inadequate. This was particularly true as to the level of protection, implementation and enforcement. It was, therefore, agreed to develop new internationally agreed rules. The result was the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) negotiated in the Uruguay Round of MTN that sought to reduce distortions and impediments to international trade through promoting effective and adequate protection of intellectual property rights. The Agreement spells out the way that basic principles of trading order and other intellectual property agreements should be applied. The “MFN” and national treatment requirement have constituted key elements of the architecture of the agreement on the TRIPs. This Agreement has also required members to comply with pre-existing agreements governing IPRs. It was explicitly provided that nothing in the TRIPs Agreement shall derogate from existing obligations as spelled out in the Paris Convention, the Berne Convention, the Rome Convention and the Treaty in respect of Integrated Circuits. The TRIPs Agreement markedly narrowed the gaps in the manner these rights were recognized, protected and enforced among trading nations. It also provides for settlement of disputes through the WTO dispute settlement system. Pakistan, in compliance with the TRIPS Agreement, has enacted new legislation (IPO law) as well as effected amendments in the existing laws relating to patents, copyrights and Trademarks. Relevance for the furniture sector: The TRIPs Agreement is directly relevant for the furniture sector. Protection of designs and trademarks • Furniture designs can now be protected through getting them registered under the Industrial Designs Ordinance (2000). The furniture industry should seriously consider registering any innovative and special design so these be fully protected. • The well-established companies would be also well advised to get their trade marks protected. • The quality of protection has significantly improved. By the same token the furniture industry in Pakistan cannot copy some one else’s designs or trade marks. Pakistani furniture manufactures and exporters will be well advised to comply with the provisions of the TRIPs Agreement. 13 This Agreement fixed minimum levels of protection that each member of the WTO is required to provide to intellectual property rights of other members. International Trade Centre 63
Page 1 and 2:
The Furniture Sector in Pakistan
Page 3 and 4:
Acknowledgements The report was pre
Page 5 and 6:
Abbreviations AFTA AHEC AKTRIN APFE
Page 7 and 8:
Table of contents Acknowledgements
Page 9 and 10:
Box 3.1 Multilateral discipline of
Page 11 and 12:
Executive summary This study sets t
Page 13 and 14:
the extent possible maintain or imp
Page 15 and 16:
1 Background and objectives 1.1 EC
Page 17 and 18:
2 Furniture sector in Pakistan 2.1
Page 19 and 20:
On the buyer’s side, there are gl
Page 21 and 22: According to the websites of import
Page 23 and 24: Global demand for furniture in main
Page 25 and 26: suppliers, both domestic and other
Page 27 and 28: Table 2.3 Pakistani furniture expor
Page 29 and 30: Figure 2.4 Distribution structure f
Page 31 and 32: freight rates have increased and do
Page 33 and 34: Price The prices of local machinery
Page 35 and 36: Indonesia has also announced a ban
Page 37 and 38: industry itself should support effo
Page 39 and 40: various counterparts, the supplier
Page 41 and 42: Box 2.7 UK Timber Trade Federation
Page 43 and 44: Figure 2.5 Simplified example on ch
Page 45 and 46: At least 70% of the wood used in ma
Page 47 and 48: Scope of joint ventures There exist
Page 49 and 50: • With FAO’s Forest Products an
Page 51 and 52: The contact information of many of
Page 53 and 54: Box 2.10 USAID initiative in the fu
Page 55 and 56: Opportunities Major opportunities m
Page 57 and 58: pressure on the price. There appear
Page 59 and 60: Pakistan does not export this furni
Page 61 and 62: 3.1.3 Functional scope The function
Page 63 and 64: Current status of efforts to libera
Page 65 and 66: 3.2.2 Information flow-upwards, i.e
Page 67 and 68: Commission (EC/EU) has established
Page 69 and 70: Figure 3.3 Relevant intensity of WT
Page 71: Box 3.2 Regional Trade Agreements (
Page 75 and 76: Agreement on the application of san
Page 77 and 78: country or materially retards the e
Page 79 and 80: Relevance of the furniture sector T
Page 81 and 82: 3.4.2 Other countries’ access to
Page 83 and 84: Table 3.2 Top 10 buyers of the Paki
Page 85 and 86: Arabian market. Here again, there i
Page 87 and 88: • Material from China is being us
Page 89 and 90: 4.2 Obstacles and shortcomings - im
Page 91 and 92: Raw material recovery Raw material
Page 93 and 94: • Consistent policy for supportin
Page 95 and 96: A short-term but maybe a costly mea
Page 97 and 98: 5 Export services in Pakistan 5.1 E
Page 99 and 100: 5.1.3 Federation of Pakistan Chambe
Page 101 and 102: • Pakistan International Freight
Page 103 and 104: The lessons learnt here could be re
Page 105 and 106: 6 Conclusion and recommendations 6.
Page 107 and 108: 6.2 Critical success factors • A
Page 109 and 110: 6.4 Global value chains 6.4.1 Poten
Page 111 and 112: Benefits All timber tends to be air
Page 113 and 114: • Optimise cutting; • Calculati
Page 115 and 116: 6.6.5 If we had US$100,000: A techn
Page 117 and 118: • To modernise such a laboratory,
Page 119 and 120: Annexes Annex A — Sources of info
Page 121 and 122: • Federmobili information on the
Page 123 and 124:
• National Home Furnishings Assoc
Page 125 and 126:
International Trade Centre 115
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