Editorial

EU trade concessions

The concessionary period, though not ideal, is a significant enough time to have a positive impact on the economy.

Editorial October 08, 2010

One had been sceptical of the European Union’s move to provide trade concessions to Pakistan in order to help the country’s economy recover from the devastation wrought by the floods. And while the full list of items subject to the tariff concessions has not yet been released, we are pleasantly surprised that the duration set for the concessionary period to last is three years, which, though not ideal, is a significant enough time to have a measurable positive impact on the economy.

There is, however, still cause for concern. The government of Pakistan had asked for 200 items to be included on the list for tariff reductions and the Europeans have agreed to only 75. It is also somewhat unnerving as to why the list has not yet been made public. Are we to assume that the EU wanted at least a day of good press in Pakistan before letting the country know whether the economy actually gets something out of the deal? If that is the case, and it turns out that the actual concessions are relatively minor, then we will be disappointed by the cynicism of the EU. We hope to be proven wrong on this point.

The actions of the government of Pakistan in this matter, however, are commendable. They have represented the long term interests of the country well, certainly to the best of their capabilities. While one hopes that they are able to extract a more beneficial trading partnership with the European Union, it is good to see that Pakistan’s foreign policy includes more than just pleading for the political cause of the Kashmiris and asking for more aid.

While aid in a time of such crisis is certainly welcome, the country must learn to stand on its own two feet and the ability to earn its way out of poverty through increased trade is an important step in that direction. Given that the EU is the single largest market for Pakistani exports, it is all the more important to make trade the focus of the country’s relationship with the world’s largest economic bloc.

Published in The Express Tribune, October 9^th, 2010.

COMMENTS (2)

abc | 14 years ago | Reply There's a report in Dawn that says that EU is allowing for mostly raw or semi finished items, especially in the textile sector, thats bound to hurt the domestic economy more than the claimed benefits. By creating a competition of much needed raw material in the domestic and international market, EU will be further aggravating the situation. We need to export finished value added goods, not semi finished to have the maximum positive impact. What EU's doing seems to be a farce. i hope I am proved wrong. We really need this! Pakistan needs to be an export oriented country, high time!

Meekal Ahmed | 14 years ago | Reply I think the impact will be modest but not insignificant. And, yes, it is high time that Pakistan launched a sustained export drive that puts exports at the forefront of its growth strategy. We have never done that for reasons which I cannot fathom given the structural disequilibrium between our exports and imports. For the past 62 years our export-to-GDP ratio is flat at best -- or declining.

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