Duty-free access: WTO rejects EU trade concessions to Pakistan

Published: December 4, 2010
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Islamabad decides to launch diplomatic offensive.

Islamabad decides to launch diplomatic offensive.

ISLAMABAD: Pakistan has decided to launch a diplomatic offensive following rejection of a European Union (EU) move by the World Trade Organisation (WTO) to offer concessions under the Generalised System of Preference (GSP) to Pakistan for its export items.  The rejection came following opposition to the EU move by some of the WTO members, including India, sources told Express newspaper.

However, a senior Pakistani official put it the other way. “India did not oppose Pakistan at the WTO meeting rather it opposed the EU move,” he said, adding that the EU would now take up the matter with New Delhi.

The rejection was made at a meeting of the Council for Trade in Goods (CTG) recently held at the WTO headquarters in Geneva.

Sources in Pakistan’s commerce ministry told Express that the European Union Commission had sought WTO’s approval for duty-free access to Pakistani products worth $500 million.

According to the sources, most of the WTO members were in favour of the EU move, but some of them, including India, opposed giving the special trade privilege to Pakistan.

India argued that most of the Pakistani products to be given duty-free access to European markets were not manufactured in the areas devastated by the recent floods.

It said the EU wanted to offer the GSP facility to Pakistan to help tens of thousands of people affected by floods. But since most of the industrial units, where the items are being  produced, are located in the areas unaffected by floods, the move would help industrialists and not the flood survivors.

New Delhi said that the international community should provide more funds for the rehabilitation of the flood survivors instead of offering it the GSP facility.

Pakistan’s Commerce Secretary Zafar Mehmood confirmed that India opposed the EU move at the WTO meeting. He added that since it was the EU move, now the European Union would try to win over India before next WTO meeting.

Sources told Express that the European Union Council had unanimously approved duty-free access to Pakistani items in European markets. And it had mandated the European Union Commission to seek approval for the move from the WTO.

The move was to be implemented from January 1, 2011 after approval from the WTO. However, India’s opposition has put the trade privilege for Pakistan in the doldrums.

Sources told Express that Pakistan was supposed to export $500 million worth of items to European markets under the GSP facility.

It is the first time in the history of European Union that a non-European country would be given duty-free access to European markets. Earlier this facility was extended to Bosnia Herzegovina and Moldova.

Commerce Secretary Mehmood said that Pakistan would automatically get GSP-Plus status following duty-free access to its products in European markets. And under the GSP-Plus facility, Pakistani products would get duty-free access to American markets.

Sources told Express that with the GSP-Plus facility Pakistan would be able to export billions of rupees worth of products to American markets under the Reconstruction Opportunity Zones agreements between Islamabad and Washington.

However, following the rejection of the EU move by the WTO, the future of the GSP-Plus facility for Pakistan also hangs in the balance.

Published in The Express Tribune, December 4th, 2010.

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Reader Comments (12)

  • khan
    Dec 4, 2010 - 2:48PM

    Pakistan should work really hard to convince the EU community about the facility. whatever India is saying but the fact is that all parts of Pakistan have suffered from the floods.they should not make hurdles in the legal demand but it is up to the diplomacy now that how Pakistan tackles with the case. Recommend

  • Du-saan
    Dec 5, 2010 - 3:36AM

    Flood victims need Aid,Food,Shelter, not a company to expand american-european imperialism.Recommend

  • Raqib Ali
    Dec 5, 2010 - 7:13AM

    No Pakistani will ever be surprised by Indian move! We would have been shocked if they had supported us!Recommend

  • Goldsmith
    Dec 5, 2010 - 8:37AM

    The fact that India is trying to stop every major move for Pakistan’s rehabilitation just shows how sinister their regime really is. Even though, the goods for export are not manufactured in the areas affected by the floods, is it not obvious that the money made from these trade agreements would inevitably go to the regions of the flood affected areas?

    This is the method to re-establish their economy and at the same time give to the people before the terrorists do. Hopefully, for the sake of the world, the EU can tell the Indians to either “put up, or shut up”.

    Trade is the best solution for this nation to survive. To be the world’s biggest charity basket would not look good in the eyes of the world for they might find a reason to start a third war in the region.Recommend

  • Cherish Raj
    Dec 6, 2010 - 6:16AM

    If Pakistan opposes India at all international forums, then why should not India. India has a legal point here. Pakistan should get a waiver from the WTO and it is not for the EU to decide on its own.So there is no putting up or shutting up. According to the WTO guidelines, only the least developed countries can get special market access. The Pakistanis claim that their economy is more developed than that of India. So, India should also have got free market access after the Asian tsunami. But we respected the principles of free trade and expect other countries to abide by the same principles rather than manipulate the rules of the international trade regime.Recommend

  • Dec 6, 2010 - 12:08PM

    ???Asian tsunami??? blame ISI and get Free TradeRecommend

  • Kamal
    Dec 6, 2010 - 3:52PM

    Mr Goldsmith..who will tell India to “put up or shut up”??? India is not Maldives or Srilanka..And for your information in last 2 months UK’s PM,US’s President and Franch President has come to India.Not only that Chineese and Russian head of States will visit India next month.They are not coming to India to see TajMahal..they are coming to do business with India.India is having 2nd fastest growing economy in the world.And as they say “its the economy stupid”.Open your eyes..nobody can tell India to “put up or shut up”Recommend

  • Dec 6, 2010 - 7:02PM

    As direct manufacturers in Karachi, GWCC employs around 300 staff at our garment factory in Karachi. Out of 300 staff 122 staff were effected by the floods through their hometowns being flooded. So I dont really see Indias point that it will not help flood victims. Its common sense and you have the media to show that migration from flood effected areas have come to Urban cities i.e. Karachi, Hyderabad, Sukkur etc. There are still millions of flood effected refugees in these cities. Our company has employed over 16 staff from these areas who are desperate to earn bit of living to feed their families who are in camps. From a minor example of our own factory we can calculate that this duty free will benifit the flood victims maybe not directly but through employment etc. It seems that India and pakistan need to improve relationship and learn to live like neighbours rather then carry on with the past.Recommend

  • sandy
    Dec 6, 2010 - 9:09PM

    Its perfectly alright. Pakistan has been opposing every move of India in international forums, be it WTO, UNSC, NSG, Terrorism etc. Its high time it faces the same tactic. Trade concessions are only given to the least developed country like Africa nations. On one hand Pak spends billions on its army and bombs and on other hand it wants trade concessions to boost economy??? What a double game…. but that what it is known for all over the world today. Trade concessions to countries like Pak will open door for many others seeking free gifts, which is the last thing we need during economic recovery. Recommend

  • Tony Singh
    Dec 10, 2010 - 4:56PM

    When US proposed Pakistan aid under Kerry Luger bill for social advancement, Pakistn’s Army opposed it. It has all the money and resources for organisations like LeT, JuD but not a penny for its textile workers. Be honest and analyze how anyone can give concessions to a nation whose Army hogs 30% of budget allocation and another 30% goes to debt servicing of equipment bought by Army to be used against India? And why do you expect India not not to oppose under such circumstances?Recommend

  • Asad
    Jan 26, 2011 - 1:26PM

    I do not understand why India is opposing it.What will they achieve by opposing this concession?
    Inferiority complex and insecurity are hard to get rid of.It takes centuries.Recommend

  • Ravi
    Jan 26, 2011 - 2:07PM

    @Asad:
    Inferiority complex and insecurity are hard to get rid of.It takes centuries.
    wow what does pakis have that india will be feeling inferiority of????
    insecurity is something that has been repeatedly portrayed in pakistan by its paindabad army vis a vis india…
    please reply haan !!!!! Recommend

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