EU trade concessions: Govt quells objections raised at WTO

Sri Lankan officials say they will withdraw objections to proposal, reveals commerce secretary.

KARACHI: Sri Lanka has assured Pakistan that it will withdraw objections to the trade concessions offered by the European Union (EU) to Pakistan.

Federal Commerce Secretary Zafar Mahmood revealed that “our delegates have met with Sri Lankan officials and they have assured us that they will withdraw objections to the proposal.”

Speaking at a seminar entitled ‘EU trade concessions to the textile industry of Pakistan’ at the Institute of Business Management on Saturday, Mahmood expressed hope that India and Bangladesh will also understand Pakistan’s plight.

In the wake of the recent floods, the EU had announced concessional customs duty for 75 products exported to the bloc from Pakistan. However, the offer is yet to be approved by the European Parliament and it also faces opposition at the World Trade Organisation (WTO).

India, Sri Lanka and Bangladesh had objected to the concessions citing WTO regulations against favourable trade conditions for any country.

The federal secretary explained that next hearing of the issue at the WTO will be held on January 31, adding that the government has stepped up efforts to plead the country’s case.

Mahmood highlighted that Pakistan has paid a heavy price as a frontline state in the war against terror and said that the ongoing fight has taken a toll on the economy and the recent floods added to the quagmire faced by businesses.

The secretary stressed that any facility offered to Pakistan should be sufficiently long-term to encourage investments in export-oriented sectors. “Previously, businesses were offered concessions by the EU from 2002 to 2004 but these were stopped abruptly,” said Mahmood, adding that “during those three years, our exports to the EU increased by an average of 18 per cent per annum.”

He said that business owners committed hefty investments to the textile sector, following impressive growth, but lamented that the sudden end to the special treatment scuttled the recovery of investment.

“The trade concessions offer vast opportunities to the exporters,” said TDAP Chairman Tariq Puri, but stressed that the only sustainable solution for increasing exports is improved competitiveness of industries.

He urged both the private sector and the government to work towards enhancing energy efficiency and improving supply chain of industries.

German Consul General Dieter Fruend said that Germany would do its best for securing trade concessions for Pakistan. However, he highlighted the surveys that showed that Pakistan’s textile factories can cut energy costs by up to 300 per cent by improving efficiency.

Fruend said that Germany will continue to play a role in the responsible and sustainable development of Pakistan’s industries.

Participants at the seminar stressed the need of dispelling the perception that exports can only survive under concessionary arrangements.

Published in The Express Tribune, January 23^rd,  2011.