 
  WORLD TRADE  
ORGANIZATION  G/C/W/487 
16 April 2004 
 (04-1728) 
Council for Trade in Goods Original:   English 
  
 
REPLIES FROM PAKISTAN TO QUESTIONS FROM THE UNITED STATES
1 ON 
PAKISTAN'S REQUEST (G/C/W/478) FOR EX TENSION 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.  
_______________ 
 
 
1. Pakistan's request appears to suggest that me asures inconsistent with the TRIMs Agreement 
have been eliminated in all but 16 area s or programmes in the automobile sector. 
 1.a Is this reading of the request correct? 
 Reply
:  
  It is correct that Pakistan has phased out a ll the deletion programmes of the engineering sector 
except the automobile sector.  2. We would like to understand better the charac ter 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 Pr ogrammes 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 fu ll capacities but in most of the 
cases the capacities have been almost doubled.  Th e new entrant as an assembler, however, has the 
                                                     
 
1 G/C/W/480. G/C/W/487 
Page 2  
 
 incentive to begin the assembly at the deletion leve l already achieved two years earlier by the industry 
and catch up to the industry level within two year s from the date of participation in the programme. 
 
2.b How do these programmes work, and in what respec ts 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 th e individual units draw their Unit Specific Deletion 
Programs (USDP) as per thei r convenience with adherence to the speci fied targets. It entails a basket 
concept which allows the Original Equipment Manufacturers (OEM)s to select the parts for 
indigenization keeping in view the ava ilable 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 de letion’, i.e. the local content requirements, which 
perhaps may appear to be in-consistent with the TRIMs Agreement. As expl ained above the deletion 
policy has built in phase out mechanism.  
2.c Which domestic and foreign producers are aff ected 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 pa rts have not been developed much.  A few joint 
ventures (Annex C) have however brought in so me 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 re gard is indeed substantial. So far, among the 
four major players, Indus Motors is producin g about 740 parts, Pak Suzuki is producing 
approximately 1794, Honda Atlas Cars has localiz ed about 699 parts and Dewan Farooq Motors Ltd. 
has commenced the assembly of Kia/ Hyundi vehi cles at the same deletion threshold as others. 
Similar is the case of Motorcycles and other commercial vehicles. 
 
 Auto Assembly units and Vendors assembling/manu facturing 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 requireme nt at this stage may not only mean loss of jobs 
to 171,000 families but also putting at risk investment s 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.   G/C/W/487 
 Page 3 
 
 
 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 current ly 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-criti cal) manufactured out of local/imported inputs 
selected by OEMs/vendors depending on their indi genization 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 natu re and are available to both domestic and 
foreign investors in the automobile sector engage d in the manufacture and supply of auto components 
and parts. Importers or any non-auto businesses ar e not involved in this programme and are free to 
import the goods of their choice at normal Custom s 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 d ifficulties it had encountered in implementing the 
TRIMs Agreement. These included International s anctions, reduced foreign investment inflows and a 
general economic slowdown.  Since that time, th e sanctions have been removed, foreign investment 
inflows have increased; Pakistan’s economy has reco rded excellent growth, and, according to 
Pakistan’s request, the auto sector has grow n 49.8 percent during the 2002-2003 periods. 
 G/C/W/487 
Page 4  
 
 Reply
: 
 
The above position is largely factual. Pakistan’s GDP has recorded a mod est 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 eco nomic 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 increas ed 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 i nvestments and newly provided employment will 
be in jeopardy.    4.a Please describe the "particular difficulties" t hat currently prevent the go vernment 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 au tomobile industry too depends on consistent 
government policies. Any sudden change in the o fficial priorities certainly affects the long-
term investment patterns. Inconsistent government polic ies 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 Estab lishment of Engineering Development Board. 
However, the volume of production remains ve ry 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 sch emes such as Yellow Cab Scheme, the Green 
Tractor Scheme etc. and  import of old automob ile 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 e xperienced some respite through increased volumes. 
  The particular difficulties and some adverse consequences are enumerated below;  
(i)  Closure or substantial reduction in act ual 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 proj ected growth to make the supply of auto 
component and parts to be cost effective a nd 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 .  G/C/W/487 
 Page 5 
 
 
 Now, with the increased capac ities when these vendors start catering for the replacement 
market there is every likelihood that the lo cal 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 auto motive 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 th e 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 wo rkforce, which is capable of managing the 
latest in automotive technology. 
• A strong influence of Japanese Best practices. 
• Partnering linkages with global supply chai n with efficient Tier 2/3 suppliers. 
• Elimination of fully documented sector of the economy.  
• A potential synergy in IT/Software/ Em bedded software and auto components. 
• Steady growth in terms of installed cap acity, 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 Pr ojects (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 Inv estment 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 sect or 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 cap acity through horizontal transfer of technology 
which is being modified to suit local circumst ances and is being adopted and refined with 
each passing year.  
 
(v)  All the stakeholders, the Vendors and Assemb lers have invested a large amount of $ 2.5 
Billion (Foreign and Local) to make the indigenization program of the government a success. G/C/W/487 
Page 6  
 
 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 Parliamentar ians 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 termin ation 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 sever al 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 confid ence 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. Th ey apply updated production and quality control 
theories like Quality Circles, 5-S theory, QCD Th eory 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 ha ving 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 describ e the relevant procedures and their difficulty. 
 
Reply
: 
 
 The request for extension and all actions in pe rusal 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 Parliamentaria ns, 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 meas ures over the course of the three-year period, or  G/C/W/487 
 Page 7 
 
 
 would the government plan to eliminate all of th e 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 pert inent to mention that there is no hard and fast 
demarcation between these vendors.  Invariably a ve ndor may be supplying to more than one sector. It 
would therefore create administrative proble ms 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 th e 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 chang es once the industry has been  prepared to adopt the 
changed scenario. 
 
8.  Prior to submitting this request, had the releva nt 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 te rminated 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 au tomotive parts imports. An importer may import  
any amount of parts he wishes.  (iii)  The EDB, the vendors and OEMs are involve d in regular consultation process to enable a 
system that ensures a smooth change over fro m 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 perf ormance requirements (PR in Mexico and USA  
prior to NAFTA
2) as given below.  All that GOP is asking for is some more time for a smooth 
transition so that the sector may become self-s ustaining and internat ionally 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. G/C/W/487 
Page 8  
 
  
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 technolo gy 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 investme nt 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 a nd 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 whic h it has highlighted tangible gains of the 
automobile industry. Resultantly to-date the auto mobile 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. Sanpa k (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 Engineer ing (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 Industri es Ltd. Richard Klinger, UK 
• Camshafts. Agriauto Industries Ltd. Zephyrs Cams/Camtec, UK 
• Gabriel Shock Absorbers. Agriauto Indust ries 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 Pr oducts Limited Raba PLC, Hungary 
• Wire Harness. Thal Engineering Ltd. Furukawa, Japan  G/C/W/487 
 Page 9 
 
 
 • 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 closel y following the Japanese. 
  At this stage when we have traveled a l ong way to promote the products and technologies of 
the technologically advanced world, thinking a bout 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 knowl edge acquired in the development of the parts 
locally.  This disruption will surely cause a huge fina ncial and technological loss to the private sector 
Vendor units as well to the GOP.  
10. Pakistan's April 1995 TRIMs notification (G/TRI MS/N/I/PAK/1) stated that participants in 
the indigenization/deletion progra mme benefited from "concessionary ra tes 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 indigeniza tion 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 
kits under Deletion 
Program Involuntary Tariff payable on 
CBU under the Custom Tariff 
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. 
 G/C/W/487 
Page 10  
 
 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 TR IMs 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 un it 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.  Ther e has been a temporary halt in the exports 
due to sudden increase in the local requirement s. Now that capaciti es 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 dat a 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 reporte d 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 implementi ng agency the EDB still remain the agency for 
notifying the TRIMs.   G/C/W/487 
 Page 11 
 
 
 13.b Are any other government entities or persons responsible for implementing or supervising the 
measures? 
 
Reply :  
 
 The implementation/monitoring of the progra mme 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 trans ition 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 w ould 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 ra ting (Annex E) compared 
to other countries in the region and the request be ing backed by all the stake holders, the requested 
extension appears imperative to stabilize the industry.  G/C/W/487 
Page 12  
 
 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 
3 Cat. 3, above 1200 cc  
 
31-60 
 Tractors 
4 Cat. 2, above 40 and up to 55 HP (2x2) 
5 Cat. 3, above 55 and up to 80 HP (2x2) 
6 Cat. 4, above 55 and up to 80 HP (4x4)  
 
47-78 
 Motorcycles 
7 Cat. 1, up to 100 cc 
8 Cat. 2, above 100 and up to 175 cc  
79-83 
 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 
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  
  
36-59 
 Buses 
15 Cat. 1, Minibus up to 30 passengers 
16 Cat. 2, above 75 passengers  
39-41 
  G/C/W/487 
 Page 13 
 
 
 ANNEX B  
 
 
O E M       P r o d u c t  
 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  
 G/C/W/487 
Page 14  
 
 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  
  G/C/W/487 
 Page 15 
 
 
 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 G/C/W/487 
Page 16  
 
 Commodity description 
Timming gears/transmission 
Tractors wheels rims 
Pistons/cylinder liners 
Radiators cop assy 
Handbrakes 
 
  G/C/W/487 
 Page 17 
 
 
 ANNEX E  
 
Pakistan's compliance with WTO and its ranking in Globalization Index 
http://www.foreignpolicy.com/i ssue_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 G/C/W/487 
Page 18  
 
 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   G/C/W/487 
 Page 19 
 
 
 Country:  Pakistan  
The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 
variables grouped in four baskets:  economic inte gration, personal contact, technological connectivity 
and political engagement.  
Overall Ranking:  46 
Change from 2003:  Up 6 
 
Economic Ranking Personal Ranking Technological 
Ranking 
 Political Ranking 
55 
 36 59 34 
Trade 
56 Telephone 
54 Internet Users 
59 International 
Organizations 
27 
 
Portfolio 
48 
 Travel 
62 Internet Hosts 
55 UN Peacekeeping 
30 
FDI 
46 
 Remittances and 
Personal Transfers 
8 Secure Internet Servers 
54 Treaties 
44 
Investment Income 
43   Government Transfers 
15 
 
 Country:  India  
The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 
variables grouped in four baskets:  economic inte gration, personal contact, technological connectivity 
and political engagement.  
Overall Ranking:  61 
Change from 2003:  Down 4 
 
Economic Ranking Personal Ranking Technological 
Ranking 
 Political Ranking 
61 
 53 55 57 
Trade 
59 Telephone 
58 Internet Users 
55 International 
Organizations 
28 
 
Portfolio 
56 
 Travel 
61 Internet Hosts 
57 UN Peacekeeping 
58 
FDI 
55 
 Remittances and 
Personal Transfers 
30 Secure Internet Servers 
53 Treaties 
53 
Investment Income 
60   Government Transfers 
51 G/C/W/487 
Page 20  
 
 Country:  Sri Lanka  
The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 
variables grouped in four baskets:  economic inte gration, personal contact, technological connectivity 
and political engagement.  
Overall Ranking:  51 
Change from 2003:  Down 6 
 
Economic Ranking Personal Ranking Technological 
Ranking 
 Political Ranking 
41 
 34 56 60 
Trade 
22 Telephone 
49 Internet Users 
58 International 
Organizations 
51 
 
Portfolio 
54 
 Travel 
52 Internet Hosts 
50 UN Peacekeeping 
55 
FDI 
43 
 Remittances and 
Personal Transfers 
7 Secure Internet Servers 
47 Treaties 
44 
Investment Income 
53   Government Transfers 
49 
 
 Country:  Brazil  
The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 
variables grouped in four baskets:  economic inte gration, personal contact, technological connectivity 
and political engagement.  
Overall Ranking:  53 
Change from 2003:  Up 5 
 
Economic Ranking Personal Ranking Technological 
Ranking 
 Political Ranking 
40 
 60 34 45 
Trade 
60 Telephone 
52 Internet Users 
35 International 
Organizations 
31 
 
Portfolio 
46 
 Travel 
54 Internet Hosts 
29 UN Peacekeeping 
39 
FDI 
21 
 Remittances and 
Personal Transfers 
55 Secure Internet Servers 
33 Treaties 
30 
Investment Income 
33   Government Transfers 
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 inte gration, personal contact, technological connectivity 
and political engagement.  
Overall Ranking:  48 
Change from 2003:  Up 1 
 
Economic Ranking Personal Ranking Technological 
Ranking 
 Political Ranking 
28 
 48 40 58 
Trade 
8 Telephone 
53 Internet Users 
37 International 
Organizations 
45 
 
Portfolio 
44 
 Travel 
42 Internet Hosts 
41 UN Peacekeeping 
45 
FDI 
53 
 Remittances and 
Personal Transfers 
32 Secure Internet Servers 
42 Treaties 
53 
Investment Income 
37   Government Transfers 
52 
 
 Country:  Romania  
The AT Kearney/FOREIGN POLICY Globalization Index includes rankings of 62 countries for 14 
variables grouped in four baskets:  economic inte gration, personal contact, technological connectivity 
and political engagement.  
Overall Ranking:  39 
Change from 2003:  Up 1 
 
Economic Ranking Personal Ranking Technological 
Ranking 
 Political Ranking 
38 
 37 41 30 
Trade 
26 Telephone 
36 Internet Users 
36 International 
Organizations 
32 
 
Portfolio 
49 
 Travel 
31 Internet Hosts 
40 UN Peacekeeping 
44 
FDI 
32 
 Remittances and 
Personal Transfers 
20 Secure Internet Servers 
45 Treaties 
1 
Investment Income 
56   Government Transfers 
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 inte gration, personal contact, technological connectivity 
and political engagement. 
 
Overall Ranking:  50 
Change from 2003:  Up 6 
 
Economic Ranking Personal Ranking Technological 
Ranking 
 Political Ranking 
36 
 46 44 50 
Trade 
54 Telephone 
47 Internet Users 
47 International 
Organizations 
37 
 
Portfolio 
25 
 Travel 
53 Internet Hosts 
43 UN Peacekeeping 
49 
FDI 
23 
 Remittances and 
Personal Transfers 
23 Secure Internet Servers 
41 Treaties 
30 
Investment Income 
28   Government Transfers 
35 
 
__________ 