China and Pakistan have redefined regional trade patterns after explicit bilateral contracts under the China-Pakistan Economic Corridor (CPEC).
At present, trade between the two countries stands at $18.9 billion, but it is expected to rise under the multi-billion dollar initiative.
However, the prevailing non-tariff barriers (NTBs) have restrained the volume of Pakistan’s exports to China. Pakistani exporters are facing NTBs in safety and quality standards under the sanitary and phytosanitary (SPS) agreement, and technical standards sought under the technical barriers to trade (TBT) agreement by the World Trade Organisation (WTO).
The TBT and SPS are widely used by WTO member countries because NTBs for environmental protection, consumer safety, interests, etc have increasing impacts on regional as well global trade. The members are authorised to implement these NTBs to protect the health of humans, animals and plants; in fact, all living organisms.
WTO members maintain trade quality and standards to ensure that merchandised food is safe for buyers and to prevent the spread of pests or diseases in living organisms. But strict health and safety regulations are being used unnecessarily as an excuse for protecting interests of domestic producers or to maintain comparative advantage in foreign trade.
These SPS and TBT measures may follow several forms, such as requiring commodities to originate from a disease-free area, inspection of products, specific treatment or processing of products, setting of allowable maximum levels of pesticide residues or permitted use of only certain additives in foods.
The Agreement on the Application of Sanitary and Phytosanitary Measures sets out the necessary rules for quality and standards. The measures should be initiated and enforced only to the extent necessary to protect lives.
China initiated and enforced 87 cases of technical barriers to trade on exports from Pakistan in 2016, according to World Trade Organisation.
Similar to the SPS agreement, the TBT agreement has been enacted with the establishment of the WTO on Jan 1, 1995 (Pakistan joined WTO in 1995 and China in 2001).
In China and Pakistan, both SPS and TBT agreements have common obligations of non-discrimination for the rest of WTO member countries. The agreements are related to international as well as domestic quality and standards.
According to WTO statistics, China initiated and enforced 87 TBT cases on exports from Pakistan in 2016. Vegetable products faced 4 TBT cases.
China initiated and enforced 12 SPS cases including oil seeds and oleaginous fruits, miscellaneous grains, seeds and fruit, industrial or medicinal plants straw and fodder.
Although the quality and standard are restricting Pakistan’s exports for a period, they can be increased in the long run by adopting such standards. Under the SPS agreement,
As far as implications of the WTO are concerned, TBT and SPS have a significant impact on Pakistan’s ability to increase the agro-based exports to China.
In 2015, Pakistan received 17 WTO notifications from other countries under SPS and TBT agreement. Considering China’s expertise on SPS and TBT, cooperation between NTBs-related organisations should be strong enough to benefit from each other’s expertise and thus boost bilateral trade in the wake of the CPEC.
The organisations on NTBs publicise the effective use and enforcement of standards. Pakistan’s exports are largely affected by TBT and SPS, because of lack of technical knowledge and modern requisite infrastructure. Joint trade-related programmes between China and Pakistan will lessen NTBs and boost export volumes.
Source: dawn.com
