News
Friday, September 17, 2010
EU agrees to grant Pakistan trade breaks
* EU summit in Brussels agrees on time-limited trade concession for Pakistan worth $390 million
* Details to be discussed with WTO in coming weeks
* Pakistan to get access to GSP+ programme by 2014
BRUSSELS: European Union leaders agreed on Thursday to grant limited trade concessions to Pakistan to help it overcome the impact of devastating floods and maintain political stability, diplomats said.
Pakistan will receive an “immediate and time-limited reduction” in duties on key exports to the European Union, taking into account industrial sensitivities in the EU, notably on textiles, the diplomats said after leaders of the 27-nation bloc met at a summit in Brussels.
One diplomat said the arrangement would be worth around $390 million to Pakistan over a year.
The details will be worked out by the European Commission, the EU executive, in coordination with the World Trade Organisation (WTO) to avoid the concessions violating international trade rules and aggravating other EU partners such as India, Sri Lanka and Bangladesh.
“There is a deal done,” the diplomat said, adding that it included a commitment to grant Pakistan access to the EU’s enhanced trade programme, known as GSP+, by 2014, provided it meets criteria on good governance and human rights.
“The European Council underlines its firm commitment to grant exclusively to Pakistan increased market access to the EU through the immediate and time-limited reduction of duties on key imports,” a statement by the 27 EU leaders at the end of the summit said.
“The severity of this crisis demands an immediate and substantial response,” the EU said in a declaration.
“A stable, democratic and prosperous Pakistan is key to addressing global issues such as counter-terrorism, nonproliferation or counter-narcotics,” the statement said.
“The European Commission is invited to explore options with WTO partners and present finalised proposals in October, taking into account industrial sensitivities in the EU,” the statement added.
The European Union has been pressing for weeks to try to agree better trade terms for Pakistan to help it overcome the impact of the floods, over and above the emergency food and other aid it has already sent to the country.
Britain and Germany had pushed hard for a deal, but France, Italy and others EU states with domestic industries that compete with Pakistani imports such as linen, garments and ethanol, were reluctant to give too much ground at a time of economic stress.
The deal would result in a trade “waiver” for Pakistan, similar to the one Islamabad received after the September 11, 2001 attacks on the United States in recognition of its role as a frontline ally in the battle against terrorism.
The EU is hoping that by discussing concessions with the WTO and trade partners ahead of time, it will prevent countries such as India filing lawsuits with the WTO against the move.
Since trade disputes take a long time to be settled, time-limited concessions should deter opponents from making legal challenges. agencies
Courtesy www.dailytimes.com.pk