The European parliament has introduced amendments to the initial flood-related trade concession package, restricting the incentives and tying them up with human rights record and treatment of terrorist organisations.
The move suggests that Pakistan is fast losing sympathies it won after last summer floods. It seems that the commerce ministry too has lost interest in it, implying that the matter was initiated by the European Union and Pakistan is the beneficiary whatever it gets.
The amendments to the original preferential trade draft offered to Pakistan in October last year are yet another headache, as the concessions package is already struggling in the World Trade Organisation where India and some other countries have opposed the deal terming it against the spirit of free trade.
The European parliament has completed the first phase of voting and deferred the final vote in order to give time to parliament to negotiate with the EU General Council on new regulations introduced in the limited trade concessions package. The process of negotiations may take few months.
On the other hand, the EU General Council that could not convince India in the May 3 meeting will take up the issue again on May 27-28.
EU had offered Pakistan duty-free access for 75 items for a period of three years. The selected product lines have almost 900 million euros in import value, accounting for about 27 per cent of EU imports from Pakistan.
Members of the European parliament voted to introduce a clause in the regulation that would tie the preferential trade rules to Pakistan’s human rights record. The new clause says, “If Pakistan adopts measures restricting human rights and workers’ rights, gender equality or religious rights or if it provides terrorist organisations any kind of backing or support, the Commission shall immediately propose to repeal” the regulation.
The insertion of words about treatment of “terrorist organisations” highlights the challenges Pakistan is likely to face on the international front after the killing of Osama bin Laden in Abbottabad.
The EU parliament supported the idea to offer a preferential trade deal to Pakistan but for a very limited period and with the option to review it any time. The members added a clause that stipulated that any trade preferences that would seriously threaten a European producer could be revoked.
Moreover, parliament backed proposals to cut import duties for around 75 different Pakistani import products for a period of one year, which could be extended for one more year. Initially, the offer was made for three years with an aim to bridge it with the Generalised System of Preferences-plus regime that ensures duty-free access for all products.
The GSP-plus scheme would become effective from 2013 but Pakistan’s qualification is linked with the human rights record. An EU parliamentary delegation, during its recent visit to Pakistan, asked the government to come clear on the issue of commitment to human and political rights.
Commerce ministry sources, privy to the negotiations, said that the delegation found that there had been a lack of commitment on the part of Pakistan’s leadership to address EU concerns.
The EU parliament also voted for an increase in annual duty-free quota for several textile products, instead of simply doing away with the duties completely. However, it also inserted a safeguard clause to allow for important market disruptions to be dealt with.
Published in The Express Tribune, May 12th, 2011.