Moth-eaten deal: EU trade concessions to transfer little benefit
The European Union (EU) Parliament will vote in two months to approve a limited trade concessions package for Pakistan. “The EU Parliament is scheduled to vote in September on duty-free trade concessions for Pakistan,” Lars Gunner Wigemark, the EU’s Ambassador to Islamabad, told The Express Tribune. He said it was expected that the deal will be effective from October this year.
Meanwhile, observers say the deal will be nothing more than a symbolic gesture: offering less than 100 million Euros in benefits to Pakistan through duty waivers.
In a bid to help compensate for losses caused by the 2010 floods, the EU had proposed to waive duties on 75 dutiable products exported by Pakistan. However, during the process of reaching a consensus on the proposal – first in the World Trade Organization (WTO), and then among EU members – the time span for the period of the amenity was reduced from the proposed three years to only 15 months.
Furthermore, EU members have expanded quantitative quotas to cover more products, according to commerce ministry officials. Against 75 items’ duty-free import, the WTO placed quantitative quotas on 20 textile products. The EU members have so for also imposed quantitative quotas on six additional items, and some more products are likely to be added in the limited-access list, said the officials.
Initially, Pakistan had hoped to gain up to 300 million Euros in benefits through duties waivers, but actual benefits will now be far below 100 million Euros, they added. The officials further added that the crisis in EU member states will make it harder to realise even these benefits; orders have already started thinning out.
In such a limited time period and reduced duty waivers, Pakistani exporters will not be able to gain the sort of advantages they were expecting in 2010; aimed at edging out Indian and Bangladeshi competitors; they added.
European Parliament member Jean Lambert, who was in Islamabad to discuss political and economic issues, including the trade concessions, said that certain members of the EU Parliament have raised a voice against granting the concessions to Pakistan. Her comments suggest that the EU had offered the deal in 2010 without doing proper homework.
To a question, Lambert agreed that due to the lapse of a considerable amount of time, the deal now carries symbolic importance only. “It is symbolic, but is still extremely important; Pakistan will be the only country for which we have done this, and people do not want to see it becoming a precedent,” she said, defending the Union.
She said both the WTO and the EU Parliament took a longer time than stakeholders had hoped for, partly because it took a lot of work to get India and Bangladesh agree to the trade waivers extended to Pakistan.
Lambert said that within the EU Parliament, there was a feeling that if the EU really wanted to do something to help, humanitarian aid was the perfect way to do it. She maintained that EU member states are facing economic difficulties; and some of them are textile producers.
Lambert said despite bottlenecks, the EU has not stepped away; and “the EU Parliament will approve the deal in September, barring something terrible happens that none of us can foresee.”
Published in The Express Tribune, July 20th, 2012.
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If Pakistan does not want it just say NO THANK YOU. Simple as that.
Pakistan will also be required to amend its law regarding capital punishment, if it wants greater EU facilitations in trade etc......because the EU claims it to be a human rights issue.
@Asma Tanoli: You may be right, however one also has to take into account the current ecomomic climate in EU. It is a farce and to be honest there are lot of lot of people like me, who simply never believed in Euro and we know that its demise is coming pretty soon too !
I think we are to blame for not knowing how to go about this process. It should have never gone to WTO. EU could have given these concessions unilaterally as they did for Tsunami-affected countries. If not, we should have insisted on an immediate negotiation of a FTA as EU has done with dozens of other countries including Egypt, South Africa and many other countries like Pakistan. If EU was finding it difficult to do that, they could have given extended bilateral partnership agreement as they have done with ACP members. In fact, EU was not sincere and Pakistanis were incompetent to have stuck to this deal.
@khan: " This is sad. First we begged hard "
Its not just about how hard an act you put on ! There are lot of factors at work here and frankly the way EU functions is beyond even our understanding here in UK ! This is one big Bureaucratic Organisation, hence the machinary does not always work !
Pakistani exporters will not be able to gain the sort of advantages they were expecting in 2010; aimed at edging out Indian and Bangladeshi competitors
Are you saying that Pakistan cannot compete with India or even Bangladesh without concessions?
This is sad. First we begged hard to get this concession, and many thanks to India to who withdrew their opposition. Never in history has WTO given such unilateral concessions that defies rules of economy and trade. And why do we think that EU owns us to pay 300 million ??? We should be grateful to our heart, that their citizens are paying us 100 million. We are becoming a bunch of greedy and ungrateful lot, who thinks the world owns us for all problems which are 99% created because of our own mismanagement.
Leh maal NML.