Limited access: EU to open gates for Pakistani goods but not for long

Published: May 13, 2012

The bloc decreases special access to 18 months against initial plans of 36 months.

ISLAMABAD: 

After twenty months, the proposed European Union (EU) trade concessions aimed at helping Pakistan’s economy to recover from losses inflicted by floods in 2010, have become political baggage for the 27-member confederation rather than measures meant to lessen Islamabad’s economic woes.

In the latest blow, dashing Pakistani exporters’ hopes of making significant gains from the proposed trade concessions, the EU has decided to cut the waiver period from 36 months to just 18 months. It has also decided to place ceilings on the quantity of duty-free goods being imported from Pakistan.

Earlier, in February this year, the World Trade Organization approved the compromised concessions package by making 20 products subject to quotas and reducing the effective period to two years with an option to extend it to the third year. In September 2010, the EU had announced that it would waive duties on import of 75 items from Pakistan for a period of three years. These 75 products’ imports are worth almost $1.2 billion, or about 5% of Pakistan’s overall exports.

The decision has been taken by the Permanent Representatives Committee, known as Coreper. The committee is responsible for preparing the work of the Council of the EU and occupies a pivotal position in the decision-making system. The forum keeps political control over the work of the expert groups.

“It is not just trade measures but an issue of political credibility for the union, therefore we will not go back on our commitments,” said EU Ambassador to Pakistan Lars-Gunnar Wigemark while talking to The Express Tribune.

Wigemark rejected that the trade concessions proposal has been shelved. “It is alive, kicking and going into the final phase,” he declared.

Without disclosing details since the deal is not formally approved, Wigemark said that some conditions of the package have been changed, which should not surprise people due to economic situations in some of the member countries. “It is not uncommon having concessions with limitations,” he added.

A Pakistani diplomat working in Brussels said the “economic benefits of the package have almost eroded and the only importance of the concessions, for both Pakistan and EU, is claiming political victory. According to initial estimates, the waiver could increase exports to $300 million and with the latest proposed changes the benefit would be less than $100 million, or just 0.3% of last year’s total exports.

The EU reduced the time period and made five more products subject to tariff rates quotas after some member states refused to sanction the concession package following deepening economic crisis in their states. They also questioned whether Pakistan’s industry will be able to deliver amid the prolonged power outages.

During discussions the members states were largely divided into two groups, one advocating shelving the deal due to economic difficulties while the others arguing to honour the political commitment.

With EU stepping back from its promises, the chances of getting Generalized System of Preferences (GSP) plus status by 2014 have also diminished. The GSP plus promises general duty waiver on all products imported from selected developing countries.

Published in The Express Tribune, May 13th, 2012.

Reader Comments (10)

  • khan
    May 13, 2012 - 3:13AM

    beggars cant be choosers.. we are getting some sort of concession and we should be thankful for that. There are numerous natural disasters in developing countries worldwide, but no one has shamelessly begged for such unilateral concessions before. Also given the extreme poor situation at home with electricity, shut factories, labor unrest, depreciating currency, wonder how much can we even fulfill trade commitments?

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  • khan
    May 13, 2012 - 6:53AM

    Pakistani exporters are doing really well. London’s East End and many big cities have large Asian population.
    .
    Apart from regular exports, Pakistani exporters use other countries (such as brother Turkey) and gain unlimited access!
    .
    This 18 months relaxation will further improve that & encourage them to have more customers who get used to our product.
    .
    Even Polish people are taking Pakistani rice/garments back to Poland from London and are planning direct imports.They say that Pakistani imports in London are 4 times cheaper than the price of goods in Poland.

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  • sohail hussain
    May 13, 2012 - 8:59AM

    EU is playing games as we have stopped nato supply.

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  • Big Rizvi
    May 13, 2012 - 10:08AM

    Not to mention our quality. We do not use genetic engineering and artificial means of processing foods, that makes them much healthier than what you find in the west. When EU opens the gates for export, they can not just reject our goods. They will love them and want to permanently open the gates for our exports. They are of one of the best qualities and much cheaper. Here’s food for thought: Sialkot makes the world’s best sporting goods and their footballs were used in the FIFA world cup.

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  • Omar
    May 13, 2012 - 10:29AM

    Europe should realize that the trade concessions are helping the common man in Pakistan. If ordinary people are unemployed and dont have money what do they do? They become misguided and indulge in terrorism which ultimately affects Europe. They are investing in their future by preventing poor Pakistanis from becoming extremists by reducing trade barriers.

    Also Pakistan is a nuclear armed country.Recommend

  • Ohoo
    May 13, 2012 - 2:15PM

    Time to open NATO supply routes. @omar wow your comment is a joke.

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  • pankaj
    May 13, 2012 - 2:35PM

    @omar….don’t start blackmailing Europeans….

    I’m stunned by the argument that pakistanis produce best quality and still they need preferential trade… You people need to understand that Europeans are doing charity on the cost of other exporting countries like India, bangladesh etc…

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  • May 13, 2012 - 5:53PM

    Why does’t Pakistan nrgotiate an FTA with EU as India is doing.

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  • gp65
    May 13, 2012 - 8:28PM

    @Omar: “Europe should realize that the trade concessions are helping the common man in Pakistan. If ordinary people are unemployed and dont have money what do they do? They become misguided and indulge in terrorism which ultimately affects Europe. “

    This is called blackmail. Give us money or we will cause terror attacks in your country. Bangladesh also has far more poor people than Pakistan. Same is true with India and NEpal. But they do not make such threats.

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  • khan
    May 14, 2012 - 4:56AM

    To all anti Pakistanis above:
    .
    This concession was decided because of massive floods in 2010 which was the biggest disaster in UN history (as per UNO).
    .
    Many countries were supported because of Tsunami in 2005. This concession is no different, in fact it is over due. And it is meant to be temporary.
    .
    God forbid if India has biggest disaster like we had, Pakistanis should support India in that too!

    Recommend

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