Indian opposition scuttles EU trade deal

WTO panel rules against concessions being offered to Pakistan by Europe.


Shahbaz Rana March 22, 2011

ISLAMABAD: Pakistan appears to have lost a five-year fight to gain preferential access to European markets after the World Trade Organisation (WTO) ruled on Monday that the European Union's (EU) tariff concessions offer to Islamabad violated international trade agreements.

The WTO's committee on customs valuation of the Council for Trade in Goods, known as the CGT, on Monday took up the matter of the EU giving Pakistan a limited 3-year tariff concession on 75 items. The committee did not approve the concessions after the EU disclosed that the con sultation process with countries that oppose the trade deal for Pakistan was incomplete.

Despite stiff opposition from India, the EU is still hopeful that a solution can be found in time for the WTO General Council meeting.

“It is, of course, disappointing that some members of the WTO still oppose the trade concessions for Pakistan,“ said Lars-Gunner Wigemark, the head of the EU delegation to Pakistan. “Consultations are ongoing with all countries concerned, in particular India, and we are hopeful that the systemic and economic issues involved can be addressed in a satisfactory manner.“

The EU had offered those concessions to Pakistan in the aftermath of the 2010 floods, which devastated large parts of the country. Under the global trade rules, the package had to be endorsed by the WTO. The rules bound the CGT to make a decision on the matter within 90 days. The committee convened three meetings within the stipulated time.

The EU did not formally put the deal forward for a vote, as its rejection would have closed the doors on the deal permanently.
The matter has now been referred to the WTO's General Council that will tentatively meet on May 3, ten months after the July 2010 floods. For the last six years, Pakistan has been striving for tariff-free access to European markets, but its efforts had been rebuffed by the EU.
Islamabad's chances for succeeding in securing a deal with the EU increases after the 2010 floods, which created a sympathetic atmosphere in Brussels.

In September 2010, the European Council approved tariff concessions on 75 items.
The total worth of the items exported under these tariff lines is $1.03 billion and the average tariff on these items is 8.86 per cent. Under the EU proposal, the tariff would be reduced to zero for a period of three years.

If the WTO approves the package, and it also gets endorsed by the European Parliament, it will increase Pakistan's exports to the EU by $350 million over three years.

Published in The Express Tribune, March 22nd, 2011.

COMMENTS (44)

Omer Khalid | 10 years ago | Reply This might be a setback but not necessarily bad. WTO is an international organization with Pakistan as its signatory, and its members have the right to protest/challenge deals which they perceive breaking international rules. Any ways, its not clear how this deal would have affected the flood victims but of course it would have benefited the business class of Pakistan which is already very rich. Now asking for concessions using natural disaster as an excuse is a not good idea in the long term. Rather then asking for aid and concessions, Pakistani business needs to learn to compete by innovating and developing quality products. Then EU will buy our products. Secondly, textile exporters have too much influence on the government and in various chambers of commerces; we need to move towards more service oriented economy where most of the value lies in product-chain.
Raja | 10 years ago | Reply @khan I was saying the same thing. Since Indias popupation is large Percentage poor in India out of total world population is less impressive. English or Math classes wouldn't help pakis like you. Brain transplant might:-)
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