It is the era of competition and technological advancements. Globalisation has become a reality in the world. Agricultural commodities and industrial products are being traded in a state of stiff competition. World Trade Organisation (WTO) is regulating the world markets through a platform of trade negotiations. Only those products are now acceptable in the international markets, which are good in quality and available at competitive prices.
Pakistan is encountering numerous difficulties in complying with the WTO rules and carrying out structural reforms in the economy to meet the WTO requirements. In this emerging regime, latest technologies, mass communication and market accessibility are the forces, which determine growth pattern of an economy. In these areas, Pakistan is far behind India and China, that is why our growth pattern is jurky, instead of being smooth. This pattern of growth is more evident in our agriculture economy.
In the context of WTO implementations, our agriculture sector is facing a tough time and serious threats. One of the major areas of concern is the Trade Related Aspects of Intellectual Property Rights (TRIPs) Agreement. According to this agreement, the owners of patented products have the exclusive right on the use of their products. Farmers are not allowed to use the patented products like seeds without the consent of the owners. Another instrument causing hindrance in exports is the application of Sanitary and Phytosanitary (SPS) Measures. The export of fisheries sector is being restricted on the pretext of health and hygiene. Raw cotton, one of the main exports of Pakistan, is being denied on the charges of excessive use of pesticides.
Furthermore, the pesticide application on exportable fruits and vegetables is threatening the exports of citrus, mangoes, dates, banana and potato. Another cause of concern is the increasing use of non-trade barriers by developed nations. They invoke environment, labour and Human rights issues to restrict our exports.
In addition to the above concerns, the trade potential of Pakistan is severely limited by low level of production capacity. That is, even when all trade barriers are properly addressed and markets made available, even then a number of other factors will continue to limit our trade.
First, there is issue of poor quality of products caused by low level of technology and lack of quality control. Clearly, the problem of quality of agricultural products begins at the farm level, where much intervention is required, ranging from selection of seed variety to farming methods and management practices. Furthermore, traders are not used to trading on standards as most of them sell their products in the domestic markets, where the standards are not applied as a norm.
Second, production capacity is restricted by high production costs, which escalates as a consequence of high energy cost, poor infrastructure, transportation, transaction, storage facilities, inefficient bureaucracy, red tapism and costly loans. Third, low level of marketability of agro-products arises from the lack of sophisticated preservation and storage equipments and technology, poor processing and packaging skills.
In spite of the above weakness, the WTO regime offers a number of opportunities to expand our export base and diversify our export markets. The most rewarding opportunities for Pakistan are likely to come in those products where it enjoys a comparative advantage. Pakistan is unique in producing Super Basmati, Sahiwal cow, Nili Ravi buffalo and medicinal herbs, etc. Pakistan can exploit this advantage by getting these products registered under Geographical Indications (GIs) , a part of TRIPs Agreement. However, some difficulties can arise when the developing countries will translate their commitments into concrete trading opportunities. Even then, the agreements leave a margin of interpretation that allows the introduction of protectionist measures to the developing countries, which Pakistan can use to its advantage by preparing a team of technical experts.
Policy options: Pakistan should effectively implement the WTO agreements and should try to reap maximum benefits from the new trade regime. The following actions can further strengthen the current initiatives taken by the government to meet the global challenges.
-- Awareness is the first thing to reap the maximum benefits. Awareness campaigns/programmes should be designed for all types of stakeholders.
-- The government should invest more on research and development activities for the development of new varieties and efficient production systems. There is an urgent need of the establishment of standardised high-tech laboratories for testing the quality of inputs and outputs.
-- Timely and cheap access of farmers to various agricultural inputs like improved seed and fertilisers should be ensured. Seed storage infrastructure should be developed for the easy access of seeds to the farmers.
-- Improve standards to avoid action under Sanitary and Phytosanitary (SPS) Measures (SPS), Technical Barriers to Trade (TBT), etc by improving and upgrading quality of products.
-- Upgrading of storage, packaging, grading, procurement and delivery systems and entrepreneurial capabilities of stakeholders at all levels of the economy. This will help to comply with international standards.
-- Pertaining to TRIPs, different varieties of plants and animal species and traditional pharmaceutical and herbal knowledge need to be registered to take full advantage of them. All valuable export brands like Basmati rice, varieties of mangoes, oranges, etc need to be protected under different provisions of TRIPs Agreement.
-- Market information system should be strengthened in order to provide information to all stakeholders and bring co-ordination in agricultural markets.
-- Appropriate policies are required to keep our costs of production at competitive level. This is essential for reaping maximum benefit from those products where we enjoy comparative advantage in world markets.
(The writers a lecturer WTO Cell, University of Agriculture Faisalabad, and an internee WTO Cell, University of Agriculture Faisalabad.)
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