EU yet to finalise trade concessions for Pakistan

ISLAMABAD: European Union member countries have yet to reach a consensus on trade concessions for Pakistan and the delay is giving rise to fears that the final package may not be all that beneficial.

German Ambassador to Pakistan Michael Koch said on Friday “some European countries for legitimate reasons have taken different positions on the limited trade concessions and we are in contact with them to address their grievances.”

The ambassador was addressing a press conference to highlight Germany’s contribution in helping out the flood victims.

Koch said Germany backed the idea of granting an improved market access to support Pakistan’s economy and the “better market access is also a way to help and Pakistan can count on Germany on that front as well.”

On September 16, the EU Council decided in principle that Pakistan would receive an “immediate and time-limited reduction” in duties on key exports to the European Union, taking into account industrial sensitivities in the EU, notably on textiles.

The EU Council left the final decision on the European Commission as France opposed duty concessions on textile products.

The EU, which had earlier rejected a similar Pakistan request in June, softened its stance in the wake of the worst-ever floods. There are apprehensions in government circles that any unwanted delay in finalising the trade concessions may result in an “insignificant relief for a limited time period”.

The EU Council has linked the concessions with the approval of the World Trade Organisation (WTO), a global trade watchdog.

The German ambassador said trade regulations were a legalised field of action, but Pakistan did not seek concessions that violate WTO rules.

“Pakistan is in consultation with the European Union and we hope that it will finalise the package by the first week of October,” said Abdul Basit, the spokesman for the Foreign Office.

This will be the first step towards opening of European markets for Pakistani goods, as the ultimate target is the Generalised System of Preferences (GSP) plus status, a special package of enhanced trade concessions designed for developing countries.

For that, the EU has asked Pakistan to implement 27 conventions till 2014. These conventions pertain to human rights, politics and controlling corruption.

He said both the German government and the public have pledged to provide 196 million euros (Rs20.9 billion) for the relief programme. The entire contribution comprises humanitarian assistance which always goes through the United Nations, he said, adding the money was on top of the EU pledges in which Germany’s contribution was 20 per cent.

“Numbers show it is the largest catastrophe after World War II,” said Koch. To cope with the devastation, the United Nations has launched an appeal for $2 billion for early recovery.

He said Chancellor Angela Merkel-led government has committed 35 million euros or Rs3.7 billion and the German people pledged 161 million euros or Rs17.2 billion. “Only 2004 tsunami and Haiti earthquake received more from the Germans than that to Pakistan’s disaster.”

He dispelled the impression that the international aid was coming in at a snail’s pace. “One has to follow the procedures, it is normal, and I do not see any delay,” he added.

To a question, he said Pakistan’s decision to accept Transparency International’s recommendations would help improve the image deficit. He said this would also result in attracting more financial assistance at the time of reconstruction that primarily would come through the government system.

Published in The Express Tribune, September 25th, 2010.