Business

EU rejects Pakistan’s request for review

EU says package is unilateral and that there is no room for a review.

Kashif Hussain October 14, 2010

KARACHI: The European Union (EU) has rejected Pakistan’s request for a review of the EU’s concessionary package. Secretary for Commerce Zafar Mahmood said that Pakistan’s request for a review of the 75 items included in the concessionary package was rejected as the EU explained that the package was unilateral and there was no room for a review. However, a list of 16 new items has been unofficially handed to the EU.

While addressing a meeting of stakeholders at the Trade Development Authority of Pakistan (TDAP), the secretary said that Pakistani value-added industries have received no benefit from the concessionary package. On the contrary, the EU will manage to import raw materials such as yarn and grey fabric at lower prices, he added.

Mahmood said that Pakistan has no choice but to accept the EU’s offer because in spite of Pakistan’s assistance to the US in the war on terror, the country has received little in way of concessions. The package will prove detrimental to Pakistan’s value-added industries, he said, but added that this package can be used as an example to approach the US, Japan, Australia, Canada and other countries of the Friends of Democratic Pakistan for trade concessions.

He added that acquiring Generalised System of Preferences (GSP) Plus status in 2014 would be a milestone for the country.

Representatives from the value-added sector and the spinning sector also expressed their reservations about the package. The value-added sector expressed the view that the inclusion of yarn and grey fabric in the package will adversely impact raw material costs for the value-added sector. Instead of providing greater economic stability, the package will increase unemployment. Simultaneously, the spinning sector opposed the imposition of any quotas on the export of yarn.

Mahmood said that no sector will be put in hardship in order to reap the benefit of the package. He added that India will oppose the package when it is tabled at the World Trade Organisation (WTO). However, he said that the concessionary package was developed for 27 countries and overcame opposition from five countries within the EU and it is expected that the package will be approved at the WTO as well.

Mahmood said that a special government policy will be developed for the package after a meeting with stakeholders following the WTO meeting on November 22. Special trade promotion committees will be created for this purpose and these committees will also seek assistance from Pakistani commercial counsellors abroad. The committees will chalk up a marketing plan for Pakistani products in the EU, ensure participation in trade fairs and liaison with EU buyers.

Mahmood also issued instructions for the formation of a committee that will investigate the impact of the package on local industry. The committee will present a report on its findings to the ministry of commerce within 20 days.

Adviser to the Ministry of Textile emphasised the need for a monitoring system to maximise gains from the reforms package. He said that a monitoring committee needs to be formed to investigate the effects of these concessions on exports and the industry on a quarterly basis.

TDAP Chief Executive Tariq Iqbal Puri told the stakeholders that TDAP will perform its duty to help gain the utmost advantage from the package. He suggested the formation of a task force to facilitate Pakistani products to compete in European markets.

Published in The Express Tribune, October 15^th, 2010.

COMMENTS (2)

Manzoor Ahmad | 13 years ago | Reply In fact, the EU has managed to block not only seafood exports but all other value-added exports. Our government need to carefully analyze whether it is in their interest to accept this package. All value added items now exported to the EU have been excluded. For ethanol, the original quota of 100,00 tons is being revised downwards so that our exports do not grow. The only other chemical we export is pet resin. Here again a special duty has been levied specifically on Pakistani exports of pet resin. Only yarns and grey fabrics, which are raw materials and where there is very low duty of 4-5% are being duty free access. It would be a shame if our government was to accept this deal. Their claim that they will get GSP plus in 2014 is illogical. What the EU said is that it would then depend on Pakistan meeting the criteria. The EU criteria is specifically meant to exclude Pakistan. So how it expects to meet any criteria that is specifically designed to exclude it. We need to seriously consider this issue and if it is not in our interest, we need to decline it. Our maximum gain would be less than $50 million whereas if we reformed our trade policy, we could gain at least $500 millions.

S. Ali Raza | 13 years ago | Reply Frozen Seafood is banned to export to the EU countries from Pakistan since April 2007 - A annual forex loss to Pakistan exceeding US$ 100 million, is left unattended by TDAP. This is an industry that has a potential to cross US$ 1 Billion if the right steps are taken.

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