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

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• Exporters if wrongly accused of violation of some one’s IPRs should take full advantage of protection provided by this Agreement. (Action: Entrepreneur/Association) Agreement on Technical Barriers to Trade (TBT) Every WTO member, while allowing imports, has the right to adopt standards considered by it to be appropriate for human, animal or plant life or health or for the protection of the environment or for prevention of deceptive practices. The TBT seeks to assure that regulations, standards, testing and certification procedures do not create unnecessary hurdles to trade. However, with a view to preventing excessive diversity, TBT encourages member countries to use international standards where these are appropriate but it does not oblige them to change their levels of protection in the process. TBT contains a code of good practice for the preparation, adoption and application of standards. It lays down that procedures used to determine whether a product conforms with the national standards have to be fair and equitable. It does not approve of any methods that would give domestically produced products an unfair advantage. It also encourages countries to accord recognition to each other’s testing procedures. To help the stakeholders to know about the latest standards in the prospective markets, all WTO members are required to establish a national enquiry point. The TBT gives decisive advantage to industrial countries as they have superior technologies and do follow more rigorous and higher standards. On the contrary, Pakistan being a developing country has yet to progress to those relatively sophisticated standards. In particular, there are not enough laboratories. This puts Pakistan at a disadvantage. Relevance for the furniture sector: There can be genuine concerns about safety features of the furniture exported form Pakistan e.g. it has rough edges that can cause injury, or its design is defective or it has failed to use fire retardant material as required by the consumers. There is also the possibility that protectionists interests in importing countries may insist on laying down unrealistic standards which might have the effect of obstructing trade. In such cases, Pakistani exporters may be well advised to plead that the arbitrary standards have been creating unnecessary hurdles to trade and constitute a violation of the TBT Agreement. There are various government institutions through which awareness regarding environmental standards and regulations can be/should be disseminated regularly to the export sector. These include the Ministry of Commerce, Ministry of Industries and Ministry of Environment, Trade Development Authority of Pakistan and Provincial Department of Environment Protection. The lack of such information can lead to loss of markets. The Ministry of Commerce may also consider including a trade and environment section in the cell that deals with the WTO and draw on the relevant expertise from the other ministries. (Action: Entrepreneurs/Association and Government of Pakistan (GOP) 64 International Trade Centre
Agreement on the application of sanitary and phytosanitary measures (SPS) Member countries of the WTO are allowed under Article XX of the GATT 94 to regulate trade with a view to protecting human, animal or plant life or health. Under the Agreement on Sanitary and Phytosanitary measures (SPS), the WTO has disciplined the exercise of discretion by member countries by disallowing them to discriminate or misuse this authority serving as a form of disguised protectionism. Members of the WTO are allowed to establish their own standards but it is stipulated that the relevant regulations must be based on science and applied only to the extent necessary to protect human, animal or plant life or health. They are not allowed to arbitrarily or unjustifiably discriminate between countries, where identical or similar conditions prevail. Member countries are encouraged to use international standards, guidelines and recommendations if these are available. In order to make the process fair from the perspective of exporters, standards different from those already prescribed, can be applied. Similarly, different methods of inspecting products can be adopted. In order to make this happen exporters demonstrate that the measures which exporting countries have applied are at the same level of “health protection” as adopted by importing countries. Once that is done, an importing country is expected to accept the exporting country’s standards and methods. The Agreement also lays down that governments must provide advance notice of new or changed SPS regulations. They are also required to set a national enquiry point to provide up-to-date information. Relevance for the furniture sector Apparently, this agreement should not be relevant for the furniture sector. However, protectionist’s interests can assume any garb and come up with objections as to the imported furniture on the ground of it being harmful to human, animal or plant health. In particular, such a stand can be taken somewhat easily in respect of the components of furniture and ready to assemble parts. It may be argued, for example, that inputs or polish on the furniture are emitting certain substance or the wood used have been treated with a material (say anti-termite treatment carried out by the manufacturer) which is harmful to the human, animal and plant life. In such a situation, it would be open for our exporters to approach the Government of Pakistan (GOP) to press into service provisions in the agreement against untenable standards. (Action: Furniture Industry and GOP) Customs Valuation under the GATT – Implementation of Article VII of the GATT The Provisions regarding customs valuation under the GATT seek to establish a fair and uniform system for the valuation of goods that provides protection to international traders from fixation of arbitrary values by customs authorities of importing countries. The agreement lays down that the customs value of the imported goods in the case of unrelated parties (additional considerations apply where the importer and exporter are related entities) will be the “transaction value”, which really means the price actually payable for the goods when sold for exports. Some costs such as: freight, packaging, commissions etc. may be added for the purpose of working out customs value. The agreement however excludes items that are regarded irrelevant for fixing custom value, e.g. the price of goods in domestic market of the International Trade Centre 65
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 and 72: Box 3.2 Regional Trade Agreements (
Page 73: Trade Related Aspects of Intellectu
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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