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

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exporting country. If the custom authorities of a country have doubts about the declared value, they may determine the value by sequentially adopting one of the five options: (a) the value of identical goods, (b) the value of similar goods, (c) the imported price of identical or similar goods less applicable deductions for costs, (d) computed value and (e) if none of these methods work, reasonable means may be used for determining value. Relevance of the furniture sector Serious problems can arise if custom authorities of a country choose to fix arbitrary values. If values fixed are excessive, trade liberalization policy can be effectively negated. In case values are on the low side the tariff protection given to domestic manufactures will cease to be effective. Furniture importers and domestic producers if they find this misuse of custom processes they can agitate the matter with the relevant revenue authority (Central Board of Revenue). Rules of Origin The WTO agreement on Rules of Origin contains a work-programme seeking to bring about in the long term harmonization of these rules. The issue of “Rules of Origin” does not arise in cases where import and export take place on the MFN basis. This issue arises in cases where a country is to benefit from the lower tariff available through GSP or under a regional trading arrangement. Such concessional arrangement rightly requires scrutiny of imported goods to ensure that they are coming from the eligible sources. Relevance of the furniture sector Where furniture exports are destined for a country either granting GSP or, for a member of a regional arrangement of which Pakistan is a member, rules of origin acquire special importance. Exporters will be advised in these cases to obtain complete documentation, certifying the Pakistani origin of the concerned articles. Importers should likewise in such cases insist on getting proper documentation from the importing country. (Action: Furniture Industry and GOP) Agreement on Trade-Related Investment Measures (TRIMs) At times, local content requirements and performance requirements have been, inter alia, employed by host countries as an instrument to promote development objectives, such as industrialization, import-substitution and export growth. Such requirements can affect international trade. For example, a requirement of local content in a product may prevent or limit the use of imported inputs. Any investment related measure of this type has been now prohibited as a trade distorting measure. This agreement is, as such, not relevant for the furniture sector. Antidumping – Agreement on implementation of Article VI of the GATT 1994 Article VI of the GATT 94 finds the practice, of sale of products of a foreign country at less than the normal value of the products in the exporting country (called dumping) objectionable if the price level causes or threatens material injury to an established industry in the importing 66 International Trade Centre
country or materially retards the establishment of a domestic industry. Article VI (2) of the Agreement permits a country to offset or prevent dumping by levying on the concerned product antidumping duty not greater in amount than the margin of dumping. The margin of the dumping is the price difference determined in accordance with the Article VI (1). Under the antidumping agreement, a country is allowed to act in a way that would normally infringe the GATT principles of binding a tariff on MFN basis because antidumping actions means “charging extra import duty” on a particular product from a particular exporting country. Detailed procedures have been laid down on how antidumping cases are to be initiated, how their investigations are to be conducted and the conditions for ensuring that all interested parties get an opportunity to present evidence. Normally, antidumping measures expire five years after the date of imposition, unless an investigation shows that ending the measures would lead to injury. Anti-dumping investigations are required to end immediately in cases where it is determined if the margin of dumping is insignificantly small (defined as less than 2% of the export price of the product). Likewise, proceedings must end if the volume of dumped imports is negligible. The agreement lays down that the member countries must inform the WTO about all preliminary and final antidumping actions promptly as well as report on investigations twice a year. Relevance of the furniture sector This agreement is important both for importers and exporters of furniture. If actionable dumping takes places in the Pakistani market, one can have recourse to the National Tariff Commission (www.ntc.gov.pk) for seeking relief. If necessary the Government of Pakistan also can, on the basis of Anti-dumping Agreement, agitate the matter in the dispute settlement system of the WTO. The Ministry of Commerce, Government of Pakistan is the concerned agency. (Action: Furniture Industry and GOP, Ministry of Commerce) In case, export of furniture from Pakistan faces anti-dumping proceeding in an importing country or in the dispute settlement system of the WTO the GoP has to argue (and present evidence) that dumping has not taken place or the margin of dumping is insignificantly small. However, given the extremely small quantum of furniture exports from Pakistan, there is little likelihood of antidumping action against us in the near future. Action is to be taken at the instance of the industry by the Ministry of Commerce. (Action: Industry and Ministry of Commerce, GOP) Agreement on subsidies and countervailing measures This agreement disciplines use of subsidies and also regulates the actions that can be taken by the countries to counter effects of subsidies. A country can have recourse to the WTO’s dispute settlement mechanism and seek the withdrawal of the subsidy or the removal of its adverse effects. Another alternative is to launch its own investigation and charge extra duty (known as “countervailing duty”) on the goods in question to nullify effects of subsidy given by our trading partners. The agreement defines a subsidy and also introduces a concept of a specific subsidy i.e. a subsidy available only to an enterprise/group of enterprises. The discipline applies only to specific domestic or exports subsidies. International Trade Centre 67
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The Furniture Sector in Pakistan
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Acknowledgements The report was pre
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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 and 74: Trade Related Aspects of Intellectu
Page 75: Agreement on the application of san
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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