WORLD TRADE G/C/W/487 16 April 2004 ORGANIZATION (04-1728) Council for Trade in Goods Original: English
REPLIES FROM PAKISTAN TO QUESTIONS FROM THE UNITED STATES1 ON PAKISTAN'S REQUEST (G/C/W/478) FOR EXTENSION OF THE TRANSITION PERIOD UNDER THE AGREEMENT ON TRADE-RELATED INVESTMENT MEASURES
The following communication, dated 15 April 2004, is being circulated at the request of the delegation of Pakistan.
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1. Pakistan's request appears to suggest that measures inconsistent with the TRIMs Agreement have been eliminated in all but 16 areas or programmes in the automobile sector.
1.a Is this reading of the request correct?
Reply:
It is correct that Pakistan has phased out all the deletion programmes of the engineering sector except the automobile sector.
2. We would like to understand better the character and effect of the measures covered by this request:
2.a What are the programmes to which the request refers: Are they specific measures, or are they specific measures or sets of measures that apply to a particular industrial component, facility, or sector?
Reply:
The request refers to the Deletion Programmes of the GOP available for the Automobile Sector.
The Deletion Programmes are voluntary measures. The investor may opt for adoption of such measures and avail certain incentives. The programs only specify percentages of the components and parts to be deleted (Annex A) and do not specify or name the components/parts to be deleted. This option is also left to the Assembler or the Vendor to choose parts/components from the total basket for meeting the annual target.
These components are supplied by the automobile Vendor Industry comprising of more than 400 units. Till recently these units were operating at below par capacities. Only the recent growth in the automobile sector has enabled these units to not only achieve full capacities but in most of the cases the capacities have been almost doubled. The new entrant as an assembler, however, has the
1 G/C/W/480.
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incentive to begin the assembly at the deletion level already achieved two years earlier by the industry and catch up to the industry level within two years from the date of participation in the programme.
2.b How do these programmes work, and in what respects are they not consistent with the TRIMs Agreement?
Reply:
Under the programme, Industry Specific Deletion Program (ISDP) has been formulated with active participation of all the stakeholders and the individual units draw their Unit Specific Deletion Programs (USDP) as per their convenience with adherence to the specified targets. It entails a basket concept which allows the Original Equipment Manufacturers (OEM)s to select the parts for indigenization keeping in view the available technologies and vendor facilities.
The programme is regulated by the Engineering Development Board (EDB), which oversees the implementation of the Deletion Programs. Beyond this, each participating unit has the freedom to chalk out its future USDP. It is the ‘mandated deletion’, i.e. the local content requirements, which perhaps may appear to be in-consistent with the TRIMs Agreement. As explained above the deletion policy has built in phase out mechanism.
2.c Which domestic and foreign producers are affected by these measures, and in what ways?
Reply:
Besides the whole of the vendor industry, the OEMs that will be affected for the measures are enlisted at (Annex B). The level of localization of parts is confined to production of minor low tech parts while the high tech and major engineering parts have not been developed much. A few joint ventures (Annex C) have however brought in some technologies which were made possible only though the implementation of these deletion programs.
The OEMs are paying huge amounts to the local vendors for the development of parts.
The contribution of vending industry in this regard is indeed substantial. So far, among the four major players, Indus Motors is producing about 740 parts, Pak Suzuki is producing approximately 1794, Honda Atlas Cars has localized about 699 parts and Dewan Farooq Motors Ltd. has commenced the assembly of Kia/ Hyundi vehicles at the same deletion threshold as others. Similar is the case of Motorcycles and other commercial vehicles.
Auto Assembly units and Vendors assembling/manufacturing the five categories of vehicles namely Cars, Tractors, Motorcycles, Commercial Vehicles and Buses and Trucks are affected by these measures as explained above. This industry provides direct jobs to no less than 171,000 persons. The elimination of the local content requirement at this stage may not only mean loss of jobs to 171,000 families but also putting at risk investments to the tune of Rs. 98.00 Billion. The Units not participating in these two programs can not avail the concessionary tariffs on their imports of components and parts.
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2.d What percentage of local content is currently required for each of the producers or industries or product categories affected by these measures?
Reply:
The average percentage of local content currently achieved by each of the five categories of producers is as follows:
Product Cars 31– 60 % Tractors 47– 78 % Motorcycles 79– 83 % LCVs 36 – 59 % Buses/Trucks 39 – 41 %
2.e What kinds of local goods qualify to meet the local content requirements?
Reply:
All parts and components (critical & non-critical) manufactured out of local/imported inputs selected by OEMs/vendors depending on their indigenization priorities qualify to meet the local content requirements.
2.f Have any firms or business-people in the relevant sectors or importing products into Pakistan chosen not to participate in the TRIMs programme?
Reply:
The Deletion Programmes are voluntary in nature and are available to both domestic and foreign investors in the automobile sector engaged in the manufacture and supply of auto components and parts. Importers or any non-auto businesses are not involved in this programme and are free to import the goods of their choice at normal Customs Tariff. No automobile manufacturer/assembler has chosen to opt out from the TRIMs programme, as they are the principal user and beneficiaries. Some of the vendors are not participating in the Deletion Programmes because their inputs are either locally available or can be imported commercially at low tariff rates.
3. Have the measures covered by this extension request changed since they were notified in 1995? If so, please describe the changes.
Reply:
No principle changes have been made in the Deletion Policy since 1995.
4. Article 5.3 of the TRIMs Agreement gives the CTG authority to extend the TRIMs transition period for a Member that has “demonstrated particular difficulties in implementing” the Agreement’s provisions. In 2001, Pakistan identified several difficulties it had encountered in implementing the TRIMs Agreement. These included International sanctions, reduced foreign investment inflows and a general economic slowdown. Since that time, the sanctions have been removed, foreign investment inflows have increased; Pakistan’s economy has recorded excellent growth, and, according to Pakistan’s request, the auto sector has grown 49.8 percent during the 2002-2003 periods.
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Reply:
The above position is largely factual. Pakistan’s GDP has recorded a modest growth rate of 4.9% during 2002-2003. However the automobile sector has registered a higher growth rate of 49.8%, which is one-off phenomenon. This sudden increase in output was just as much externally induced in form of large foreign remittances, foreign aided economic relief and special debt relief in form of rescheduling directly improved the macroeconomic indicators, currency stabilization being one of them. This growth/ output will be very difficult to maintain if the programme is terminated immediately which for the present has given a boost to the Vendors production capacity utilization and reduced their unit costs. Based on this increased demand, the OEMs and Vendors have increased their capacities and provided employment to more people. At this crucial juncture, when some of the investment plans are still under implementation, if the local content condition is withdrawn, the assured volumes will fade away and newly made investments and newly provided employment will be in jeopardy.
4.a Please describe the "particular difficulties" that currently prevent the government of Pakistan from eliminating the remaining TRIMs measures.
Reply:
A survey report on "Pakistan – DEMAND SURVEY ON AUTOMOTIVE COMPONENTS" by the ITC/UNIDO/WTO (August 2002) had opined:
"Like other industries, the development of automobile industry too depends on consistent government policies. Any sudden change in the official priorities certainly affects the long- term investment patterns. Inconsistent government policies and uncertain decisions not only discourage the foreign investment but also create insecurity among local manufacturers. The uncertain policies also affect the development of local industry in many ways. In last 10 years the auto industry has experienced 26 policy changes and imposition of duty tariffs, although the industry got due support from the Establishment of Engineering Development Board. However, the volume of production remains very low due to the adverse political and economic situation of the country. A consistent policy should be declared by the Government for at least 7-10 years in order to make the local auto parts manufacturers more focused and more certain."
Duty free imports of vehicles under various schemes such as Yellow Cab Scheme, the Green Tractor Scheme etc. and import of old automobile and used parts and variation in import duties previously are some examples of inconsistencies. It is over the past three to four years that stable policies are being followed and the industry has experienced some respite through increased volumes.
The particular difficulties and some adverse consequences are enumerated below;
(i) Closure or substantial reduction in actual production capacity of over 400 vendor units manufacturing and supplying the automobile components and parts to the auto industry and operating under different technology transfer agreements.
(ii) The Vendor units have not achieved the economies of scale and the production of automobiles sector has yet to achieve its projected growth to make the supply of auto component and parts to be cost effective and get a reasonable return on the investments (ROI). A large majority of these vendors are bound to suffer huge financial losses.
(iii) Most of the vendors are meeting only the requirements of the OEMs are not providing for the replacement market. Requirements of the after market are met through imported parts.
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Now, with the increased capacities when these vendors start catering for the replacement market there is every likelihood that the local development will be more sustainable.
(iv) In the event that the increased productions can not be sustained, it is estimated that 70% of the 171,000 employees working in the automotive sector would have to be laid off.
(v) The loss of production/closure of units is bound to result in the loss of taxable production and the Government of Pakistan is likely to loose a major portion of the industry’s contribution to the national exchequer estimated at Rs. 51.5 billion.
(vi) Exports will also suffer, as no Vendor unit can possibly continue its business purely for export purposes. Many of these units will not only loose the technical/technological assets but would also not be able to contribute towards the goals of employment and poverty alleviation.
Some of the advantages, as mentioned below, gained through the implements of these programs are bound to be squandered half way in case we discontinue with the programs at this stage.
• Ability to manage global automotive standards. • Low cost, highly productive, Quality oriented workforce, which is capable of managing the latest in automotive technology. • A strong influence of Japanese Best practices. • Partnering linkages with global supply chain with efficient Tier 2/3 suppliers. • Elimination of fully documented sector of the economy. • A potential synergy in IT/Software/ Embedded software and auto components. • Steady growth in terms of installed capacity, production, technology and product diversification.
(i) With the encouraging level of foreign direct as well as domestic investment in the manufacturing joint ventures/ Green Field Projects (Dewan Farooq Motors Ltd.) in the automotive industry, the component / parts manufacturing sector is likely to benefit most.
(ii) In the event of an immediate roll back under the TRIMS all the above investment will get a severe setback. The credibility of the GOP’s Investment Policy will receive a set back not to mention the demise of hundreds of vendors many of whom are busy increasing their capacities and enhancing their technological levels.
(iii) Despite the revival in the economy and improvement in both the macro and micro economic indicators, and the increased production of automotive vehicles by 48.9% in the current year, the growth of the automobile sector is precarious. The specific difficulties that threaten the “demise” of the automobile sector are its financial health, consolidation of the technology frame work and technological capacity building which requires the continuation of TRIMs as per request.
(iv) In case of the vending industry the economies of scale are improving and so is the ROI but the technology transfer framework which has been developed so painstakingly will collapse if continuity is not provided. The automobile industry is following the Japanese model and is in the midst of building its capacity through horizontal transfer of technology which is being modified to suit local circumstances and is being adopted and refined with each passing year.
(v) All the stakeholders, the Vendors and Assemblers have invested a large amount of $ 2.5 Billion (Foreign and Local) to make the indigenization program of the government a success.
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The phenomenal increase in the output of Cars in 2003-2004 has fortified the confidence of these investors. Any reversal is bound to unleash severe criticism from the industry & commercial circles and the press.
(vi) A strong reaction from the Labor Unions of the concerned Vendors units where their jobs shall be surely threatened with the termination of TRIMs.
(vii) A large majority of the Parliamentarians view the WTO agreements as counter- development that breed poverty and promote de-industrialization in developing countries. Presentations, briefings and discussions are in progress to bring home the benefits of the globalization phenomenon being achieved through WTO. This process needs more time.
(viii) Closure of several hundred Vendor units is bound to create Law & Order problem and the Provincial Governments hesitate resorting to the extra-ordinary administrative measures to quell and control unrest which may result from termination of the programme at this juncture.
(ix) The participating banks (private & public) would suffer colossal losses on the loans/funding extended to these vendors, when several of them are likely to close down. This would further worsen the position of bad debts and write offs and increase the non-performing loans, badly undermining the confidence and investment climate.
(x) This strong export potential of auto parts requires the Vendors to closely work with the Assemblers to increase and improve the quality of the components and parts. Most of these units have well defined quality systems. They apply updated production and quality control theories like Quality Circles, 5-S theory, QCD Theory etc. A considerable number of these units are ISO 9002 certified. As they have to follow the design and specifications provided by the assemblers, very few of them are having in-house design centers. The drawing and technical specimen of the parts are provided by the assembler. The vendor has to adhere to these specimens and dimensions. Similarly, the relative material standards are provided on the drawing or technical specimen sheets. Mostly, the standards of the parent country are followed, for example Japanese.
Standards FCD 34, FCD 40, FCD 50, FCD 60; British Standards 400/18, 420/12, 450/10, 500/7, 600/3; and German Standards GGG 38, GGG 45, GGG50, GGG 60 are followed in case of cast iron products manufactured by these units.
The immediate termination of the programme is bound to adversely affect these capabilities which need more time to be consolidated.
5. Will the phase-out of the remaining TRIMs require any legislative action or extraordinary administrative steps? If so, please describe the relevant procedures and their difficulty.
Reply:
The request for extension and all actions in perusal are in consultation with all the stake holders. With the present extension, the amortization of vendor investments is likely to improve to a satisfactory level. Interactive discussion are going on with Parliamentarians, Senators, regional Chambers and Trade Unions. All this if allowed to proceed as per the request is likely to result in a smooth phase out at the end of the requested period.
6. If its request for an extension were granted, would the government of Pakistan plan to take any intermediate steps to phase-out the remaining measures over the course of the three-year period, or
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would the government plan to eliminate all of the measures near the end of 2006? Please describe any phase-out plan or intermediate steps that are being considered.
Reply:
The present period of phasing out as requested is only three years, a gradual phasing out is not possible. We are therefore constrained to say that the phasing out for all the sectors would be at the end of the requested extension. It would be pertinent to mention that there is no hard and fast demarcation between these vendors. Invariably a vendor may be supplying to more than one sector. It would therefore create administrative problems to monitor such partial phase out.
7. Is the government taking any steps to prepare the relevant industries and firms for the removal of the TRIMs at the end of the proposed transition period? If so, please describe these steps.
Reply:
A continuous process of consultation with all the stakeholders is in place and all the relevant sectors are being well informed on the developments that are taking place. The consultations process would induce the aspect of owning the policies of the government. It is therefore necessary that we continue with the present policies and effect changes once the industry has been prepared to adopt the changed scenario.
8. Prior to submitting this request, had the relevant industries or the government of Pakistan taken any steps to begin the transition to a system that did not rely on TRIMs? Please describe any such steps.
Reply:
(i) The import procedures for all firms have been liberalized. The condition of registration with the Export Promotion Bureau (EPB) was terminated in July 2002. Now the individuals or firms may import without having import registration certificate from EPB.
(ii) There is no restriction on quantity of automotive parts imports. An importer may import any amount of parts he wishes.
(iii) The EDB, the vendors and OEMs are involved in regular consultation process to enable a system that ensures a smooth change over from the protection to the free trade environment without hurting employment, investment and technology achievements.
9. Has the government of Pakistan considered options other than the maintenance of TRIMs measures to support the relevant industries and firms? For example, why is it necessary to retain local content requirements in these sectors?
Reply:
The deletion policy of Government of Pakistan is no new concept, it is partly based on the then Auto Industry international norms, business practices and prospects in the automobile sector wherein the developed countries had their own performance requirements (PR in Mexico and USA prior to NAFTA2) as given below. All that GOP is asking for is some more time for a smooth transition so that the sector may become self-sustaining and internationally competitive.
2 Performance Requirements as Tools of Development Policy: Lessons from Experiences of Developed and Developing Countries for the WTO Agenda on Trade and Investment by Nagesh Kumar RIS-DP 52# /2003.
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USA- PR of 75% on Toyota Camry; Italy-PR of 75% on Pajero; UK-PR of 90% on Nissan Primera and Australia-PR of 85% on most autos.
The GOP and the vendors followed this policy and contracted with their principals and signed agreements for the horizontal transfer of technology and made heavy investments in plant machinery, training, skill acquisition etc. Their progression of capabilities can be grouped into four broad categories:
(i) Knowledge and skills required for the processing of production, where shop floor experience and learning by doing, play an important role.
(ii) Knowledge and skills required for investment that is the establishment of new production facilities and the expansion and/or modernization of existing ones.
(iii) Adaptive engineering and organizational adaptations required for the continuous and incremental upgrading of product design, performance features, and process technology, and
(iv) The knowledge required for product and process innovation and the creation of new technology in some manufacturing industries.
These agreements also lead to the evolution of a strategy which included the establishment of Automotive Testing and Training Centre, support for clusters and innovation network. The International Trade Center (ITC) conducted a survey titled “PAKISTAN-DEMAND SURVEY ON AUTOMOTIVE COMPONENTS (August 2002)” in which it has highlighted tangible gains of the automobile industry. Resultantly to-date the automobile sector and vendors have invested an amount of $2.5 billion and entered into Technology Transfer Agreements with 22 foreign collaborations who are involved in the manufacturing of automobile components and parts. Major technical collaborations by automotive components manufacturers/vendors are:
• Shock Absorbers. Honda Atlas Services Showa Corporation, Japan • Radiators. Allwin Engineering industries Ltd. U.E. Radiators, Japan • Sanden car Air Conditioners. Sanpak (Pvt.) Ltd. Sanden, Japan • Shock Absorbers. Agriauto Industries Ltd. Kayaba, Japan • Radiators. Loads (Pvt.) Ltd. Toyo Radiators, Japan • Radio Cassette Players. Automate Industries Ltd. Panasonic, Thailand • Denso car Air Conditioners. Thal Engineering (Pvt.) Ltd. Nippo Denso, Japan • Automotive Glass. NGS Pakistan (Pvt.) Ltd. NGS< Japan • Automotive Lamps. Technopak (Pvt.) Ltd. Koito, Japan • Spark Plugs. Shaigan Elect. & Engg. Ltd. NGK, Japan • Steering Case Set. Polymer & Precision (Pvt.) Ltd. I. S. Seiseki, Japan • Brake Drum Assy. Alson Auto Industries Ltd. Nissin Kogyo, Japan • Gaskets. Agriauto Industries Ltd. Richard Klinger, UK • Camshafts. Agriauto Industries Ltd. Zephyrs Cams/Camtec, UK • Gabriel Shock Absorbers. Agriauto Industries Ltd. Maremount Corporation, Chicago • Iron and Aluminium Parts. Allwin Engineering (Pvt.) Ltd. Associated Engg. PLC, England • AGS Radiators. Atlas Battery Limited Japan Storage Battery Co. • AxleS for trucks/buses. Axle Products Limited Raba PLC, Hungary • Wire Harness. Thal Engineering Ltd. Furukawa, Japan
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• Propeller Shaft and Gear Shift Lever. Noor Engineering Ind. Ltd. Hamana Parts Manufacturing, Japan • Locks. General Locks (Pvt.) Ltd. Honda Lock Co., Japan • (Source: Expert Advisory Cell Survey of Industrial Sectors 2001 & PAAPAM 2000)
Furthermore, a good number of technical agreements have been recently finalized e.g. by M/s Dewan Motors & Mitsubishi Motors (2003-04) and are in the implementation stage. Intensity of Japan origin technical collaborations shows that an encouraging amount of Japanese technology has been transferred to Pakistan’s auto parts sector. The Koreans are closely following the Japanese.
At this stage when we have traveled a long way to promote the products and technologies of the technologically advanced world, thinking about other alternatives would only pave way for a situation where it becomes impossible for the foreign and local investor to recover their investments, and waste all the technological capabilities and knowledge acquired in the development of the parts locally. This disruption will surely cause a huge financial and technological loss to the private sector Vendor units as well to the GOP.
10. Pakistan's April 1995 TRIMs notification (G/TRIMS/N/I/PAK/1) stated that participants in the indigenization/deletion programme benefited from "concessionary rates of tariff for the import of specified components and parts."
10.a Is this still accurate? If so, please provide a listing of the concessionary tariff rates provided for each participant in the programme.
Reply:
Yes, this is correct. This “gain” was also confirmed in the survey conducted by the ITC/UNIDO/WTO cited above which opined that the Assemblers and Vendors have benefited from the concessionary tariff rates for the participating units in the indigenization and deletion program since 1995. The concessionary tariff structure is cascading in nature. The general pattern of import levies is as under:
Category Voluntary tariff on CKD Involuntary Tariff payable on kits under Deletion CBU under the Custom Tariff Program Motorcycle 30% 90% Cars 35% 75, 100, 125, 200% Depending on category of car Commercial Vehicles 20% 60% Tractors 10% 30%
10.b Please also provide a description of the methodologies that are used to decide what concessionary tariff rates will be offered and which products will be eligible for them.
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Reply:
Through on yearly exercise, the EDB invites proposals from the industry players with regards to their experiences of tariff effects on their production costs and ultimately on final prices. This consultative process involves all stakeholders. The proposals are discussed in joint meetings to develop a consensus and subsequently approved by the relevant authority.
11. Please provide estimates of the changes in employment, tax revenues, and export values that would result from immediate compliance with the TRIMs Agreement. What is the methodology used for arriving at these estimates?
Reply:
(i) It is estimated that 70% of the 171,000 employees working in automobile industry may be laid off.
(ii) The loss of production/closure of units is bound to result in the loss of taxable production and the GOP is likely to loose a large portion local sales tax revenue amounting to Rs. 33.2 billion ($580 million).
(iii) Exports will also suffer as no vendor unit can possibly continue its business purely for export purposes. Many of these units will loose the technical/technological assets and miss the goal and promotion of self-reliance. The exports of auto parts have progressively grown from $7.35 million in 1999 to $25 million in 2003. There has been a temporary halt in the exports due to sudden increase in the local requirements. Now that capacities have increased, the phenomenon is again expected to pick up pace.
(1 $ = Rs. 57.50)
12. For the two years for which the most recent data is available, please provide the country destinations, quantities, and values of the exports manufactured by the firms covered by the measures under discussion.
Reply:
The values of exports to countries is listed at Annex D.
13. Pakistan's original TRIMs notification reported that the indigenization/deletion programme's implementing agency was the Ministry of Industries and Production.
13.a Is the Ministry of Industries and Production still the lead agency, or has supervision of the programme changed since 2000?
Reply:
The Ministry of Industries and its implementing agency the EDB still remain the agency for notifying the TRIMs.
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13.b Are any other government entities or persons responsible for implementing or supervising the measures?
Reply:
The implementation/monitoring of the programme is with the Engineering Development Board (EDB), an agency functioning under Ministry of Industries & Production since 1995.
Conclusion
Pakistan's economy is still under a transition phase and needs time to consolidate and stabilize. Auto sector being one of the largest of the country is all the more sensitive to minor economic fluctuations which are experienced from time to time. The reason being that the struggle is still on against terrorism. Pakistan being a major ally in the struggle has to bear the brunt. This, coupled with an unstable progress of the auto sector under the previous extension would prove very short lived, in which case other safeguard measures would have to be resorted to. The processing time would be too discouraging before such measures are approved and implemented, and the industry would not be able to flourish at all.
Grown, yet fragile and unstable, it is at a stage where open competition would be detrimental to further growth and would not yield beneficial results associated with such an environment.
Considering the fact that Pakistan enjoys a healthy conformance rating (Annex E) compared to other countries in the region and the request being backed by all the stake holders, the requested extension appears imperative to stabilize the industry.
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ANNEX A
Engineering Development Board
Industry Specific Deletion Programme (ISDP) targets Automotive sector 2002-2003
S. No. Product ISDP targets 2002-3 without Assy Allowance % Cars 1 Cat. 1, up to 800 cc 2 Cat. 2, above 800cc, up to 1200 cc 31-60 3 Cat. 3, above 1200 cc Tractors 4 Cat. 2, above 40 and up to 55 HP (2x2) 5 Cat. 3, above 55 and up to 80 HP (2x2) 47-78 6 Cat. 4, above 55 and up to 80 HP (4x4) Motorcycles 7 Cat. 1, up to 100 cc 79-83 8 Cat. 2, above 100 and up to 175 cc Commercial vehicles 9 Cat. 1, Pickup 2 ton GVW 10 Cat. 2(A), Pickup S/C, 4x2, GVW above 2 tons up to 5 tons 11 Cat. 3, Rigid Truck 4x2, 5 to 8 tons 36-59 12 Cat. 4, Rigid Truck 4x2, above 8 tons 13 Cat. 5(A), Rigid Truck 6x2, above 8 tons up to 30 tons 14 Cat. 5(C), Truck, Tractor/Prime mover 4x2, GCW, up to 30 tons Buses 15 Cat. 1, Minibus up to 30 passengers 39-41 16 Cat. 2, above 75 passengers
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ANNEX B
OEM Product
1. Indus Motor Company Toyota and Daihatsu Cuore cars
2. Atlas Honda Ltd. Honda cars, Honda motorcycles
3. Pak Suzuki Suuki cars
4. Suzuki Motorcycle Pak. Ltd. Suzuki motorcycles
5. Ghandara Nissan Cars and trucks
6. Dewan Farooq Motors Ltd. Cars and LCVs
7. Raja Motor Co. Cars
8. Hino Pak Motors Buses and trucks
9. Dong Fong LCVs and trucks
Source: Pakistan Automotive Manufacturers Association
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ANNEX C
Company Joint venture Product
1. Indus Motor Company Toyota, Japan/Daihatsu, Japan Toyota and Daihatsu Cuore cars
2. Atlas Honda Ltd. Honda, Japan Honda cars, Honda motorcycles
3. Pak Suzuki Suzuki, Japan Suzuki cars
4. Suzuki Motorcycle Pak. Ltd. Suzuki Suzuki motorcycles
5. Ghandara Nissan Nissan, Japan Cars and trucks
6. Dewan Farooq Motors Ltd. Mitsubishi, Japan and Kia-Hyundai, Rep. of Korea Cars and LCVs
7. Raja Motor Co. Fiat, Italy Cars
8. Hino Pak Motors HINO Motors and Toyota Tsushu, Japan Buses and trucks
9. Dong Fong Dong Fong Motor Corp., China LCVs and trucks
Source: Pakistan Automotive Manufacturers Association
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ANNEX D
Autoparts export from Pakistan
SR # Countries of export Approx. value US$ millions 1. United States 6.0 2. Dubai/UAE 2.5 3. Sri Lanka 1.2 4. Afghanistan 0.8 5. Bangladesh 0.9 6. United Kingdom 3.2 7. Poland 0.345 8. Saudi Arabia 0.78 9. Morocco 0.275 10. Sudan 0.5 11. Italy 3.0 12. Spain 0.8 13. EU others 2.3 14. Others 4.0
TOTAL 26.6
Components exported include:
Commodity description Part of the auto vehicle, rubber Part of agricultural tractors Bodies for vehicle, cars, wagons Bodies for vehicle, motor, tractors Gear boxes Silencers and exhaust pipes Parts and accessories of tractor Parts and accessories of motor vehicle Part/accessory of motor cycles Wheel rims and spokes Hub and fire wheel Saddles Parts of cycles Part/accessory of other vehicle NS Seat of kind for motor vehicle Filters Forged machined parts Heat-treated steel components Axle, brake discs Moulds (steels) Expansion tanks Bottles/tanks and mouldings Engine valve Gear box shafts
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Commodity description Timming gears/transmission Tractors wheels rims Pistons/cylinder liners Radiators cop assy Handbrakes
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ANNEX E
Pakistan's compliance with WTO and its ranking in Globalization Index http://www.foreignpolicy.com/issue_marapr_2004/countrydetail.php
Measuring Globalization: 2004 AT Kearney/FOREIGN POLICY Magazine Globalization Index by FOREIGN POLICY, AT Kearney
Rank Country
1. Ireland 2. Singapore 3. Switzerland 4. Netherlands 5. Finland 6. Canada 7. United States 8. New Zealand 9. Austria 10. Denmark 11. Sweden 12. United Kingdom 13. Australia 14. Czech Republic 15. France 16. Portugal 17. Norway 18. Germany 19. Slovenia 20. Malaysia 21. Slovak Republic 22. Israel 23. Croatia 24. Spain 25. Italy 26. Hungary 27. Panama 28. Greece 29. Japan 30. Botswana 31. Poland 32. South Korea 33. Philippines 34. Argentina 35. Tunisia 36. Taiwan 37. Chile 38. Uganda 39. Romania 40. Senegal 41. Saudi Arabia 42. Nigeria
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43. Ukraine 44. Russian Federation 45. Mexico 46. Pakistan 47. Morocco 48. Thailand 49. South Africa 50. Colombia 51. Sri Lanka 52. Peru 53. Brazil 54. Kenya 55. Turkey 56. Bangladesh 57. China 58. Venezuela 59. Indonesia 60. Egypt 61. India 62. Iran
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Country: Pakistan The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 variables grouped in four baskets: economic integration, personal contact, technological connectivity and political engagement.
Overall Ranking: 46 Change from 2003: Up 6
Economic Ranking Personal Ranking Technological Political Ranking Ranking
55 36 59 34
Trade Telephone Internet Users International 56 54 59 Organizations 27
Portfolio Travel Internet Hosts UN Peacekeeping 48 62 55 30
FDI Remittances and Secure Internet Servers Treaties 46 Personal Transfers 54 44 8 Investment Income Government Transfers 43 15
Country: India The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 variables grouped in four baskets: economic integration, personal contact, technological connectivity and political engagement.
Overall Ranking: 61 Change from 2003: Down 4
Economic Ranking Personal Ranking Technological Political Ranking Ranking
61 53 55 57
Trade Telephone Internet Users International 59 58 55 Organizations 28
Portfolio Travel Internet Hosts UN Peacekeeping 56 61 57 58
FDI Remittances and Secure Internet Servers Treaties 55 Personal Transfers 53 53 30 Investment Income Government Transfers 60 51
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Country: Sri Lanka The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 variables grouped in four baskets: economic integration, personal contact, technological connectivity and political engagement.
Overall Ranking: 51 Change from 2003: Down 6
Economic Ranking Personal Ranking Technological Political Ranking Ranking
41 34 56 60
Trade Telephone Internet Users International 22 49 58 Organizations 51
Portfolio Travel Internet Hosts UN Peacekeeping 54 52 50 55
FDI Remittances and Secure Internet Servers Treaties 43 Personal Transfers 47 44 7 Investment Income Government Transfers 53 49
Country: Brazil The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 variables grouped in four baskets: economic integration, personal contact, technological connectivity and political engagement.
Overall Ranking: 53 Change from 2003: Up 5
Economic Ranking Personal Ranking Technological Political Ranking Ranking
40 60 34 45
Trade Telephone Internet Users International 60 52 35 Organizations 31
Portfolio Travel Internet Hosts UN Peacekeeping 46 54 29 39
FDI Remittances and Secure Internet Servers Treaties 21 Personal Transfers 33 30 55 Investment Income Government Transfers 33 57
G/C/W/487 Page 21
Country: Thailand The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 variables grouped in four baskets: economic integration, personal contact, technological connectivity and political engagement.
Overall Ranking: 48 Change from 2003: Up 1
Economic Ranking Personal Ranking Technological Political Ranking Ranking
28 48 40 58
Trade Telephone Internet Users International 8 53 37 Organizations 45
Portfolio Travel Internet Hosts UN Peacekeeping 44 42 41 45
FDI Remittances and Secure Internet Servers Treaties 53 Personal Transfers 42 53 32 Investment Income Government Transfers 37 52
Country: Romania The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 variables grouped in four baskets: economic integration, personal contact, technological connectivity and political engagement.
Overall Ranking: 39 Change from 2003: Up 1
Economic Ranking Personal Ranking Technological Political Ranking Ranking
38 37 41 30
Trade Telephone Internet Users International 26 36 36 Organizations 32
Portfolio Travel Internet Hosts UN Peacekeeping 49 31 40 44
FDI Remittances and Secure Internet Servers Treaties 32 Personal Transfers 45 1 20 Investment Income Government Transfers 56 29
G/C/W/487 Page 22
Country: Colombia The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 variables grouped in four baskets: economic integration, personal contact, technological connectivity and political engagement.
Overall Ranking: 50 Change from 2003: Up 6
Economic Ranking Personal Ranking Technological Political Ranking Ranking
36 46 44 50
Trade Telephone Internet Users International 54 47 47 Organizations 37
Portfolio Travel Internet Hosts UN Peacekeeping 25 53 43 49
FDI Remittances and Secure Internet Servers Treaties 23 Personal Transfers 41 30 23 Investment Income Government Transfers 28 35
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