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Confusion persists over EU package for Pakistan

Publication Date : 18-05-2012


Confusion prevails over the fate of European Union preferential package for import of 75 items from Pakistan after the lapse of three-and-a-half months and officials in the commerce ministry are still clueless about the time that Brussels will take to complete the so-called formalities for its implementation.

The Geneva-based World Trade Organisation had on February 2 approved the much-awaited waiver on customs duties for these products from Pakistan, which was originally projected to become effective retrospectively from January to December 31, 2012.

A diplomatic source told Dawn yesterday that Brussels got an open waiver from the World Trade Organization which would give more space and cushion to the EU-member countries to make changes in the list of duty-free items.

“The EU parliament can make changes in the scheme on pressure from the member countries,” the source explained.

It has been informed unofficially to Islamabad that the European Commission/council is considering reducing the number of duty-free items from the existing 75 items. The commission is also considering to further restricting the facility by limiting its imports to please some of the EU members, especially Greece.

Already the scope of the package has limited impact on Pakistan’s export to the EU countries because it has been delayed for the one-and-a-half years. The scheme was originally meant to be implemented from January 2011.

Opposition from leading textile countries — India, Brazil and Bangladesh — and textile lobbies within the 27-member EU delayed not only the implementation of the package but also its effectiveness.

To please these countries, the EU had amended the original scheme to use tariff rate quotas on 20 products rather than full liberalisation in its revised draft submitted on Jan 20 with the WTO secretariat.

But now, the source said, Brussels was working on further amendments to please some of its textile producing members.

The EU’s imports of 75 products from Pakistan are worth almost 900 million euros.

The EU had announced the preferential package to help Pakistan recover from the devastated floods in 2010, but Brussels now appeared to have backtracked from its earlier commitment to implement the package in its original shape without making any further change.

Commerce Secretary Zaffar Mehmood was asked to explain the reasons for delay in implementation of the package for Pakistan.

“I don’t want to comment on the issue whether on record or off the record,” said the secretary, who jubilantly celebrated the waiver granted by WTO members to the EU on the package.

Zaffar was also one of the people who claimed that India had withdrawn its objection to the package following Islamabad’s commitment to move from positive to negative list. However, he said he was optimistic about the implementation of the package without giving any details and timeframe.

Pakistan did whatever Brussels demand to reduce opposition to the package. It announced moving from positive to negative list for trade with India and phasing out of the negative list by the end of this year.

The EU plenary of parliament had on May 10 last year cleared the package, but linked harsh clauses with its implementation, saying Pakistan would have to improve its human rights and gender records.

To woo the EU for getting the package, Pakistan has withdrawn its reservations about some controversial clauses of the International Covenant on Civil and Political Rights and UN Convention against Torture as demanded by the EU to qualify for market access to European markets.

The EU had linked Pakistan’s reservations about the two conventions with the later ineligibility to be also considered for the next Generalized System of Preferences Plus status that could lead to bringing down tariff to zero per cent on most of Pakistan’s exportable products to the European market.

But the diplomatic source said Islamabad had been pressurised unreasonably to do all those measures which had nothing to do with trade and the package that Brussels announced was humanitarian ground to the floods-affected people to recover from the damages.

An official told Dawn that the trade package issue had been poorly managed by the government, especially commerce ministry. There was no coordination between the textile and commerce ministries, the official added. At the same time, the government appointed Ayesha Saeed, a daughter of Senator Gulshan Saeed of the Pakistan Muslim League (Quaid-e-Azam), as commercial secretary in Brussels on Feb 15, 2010, when the EU was considering the package for Pakistan.

Despite written complains from Pakistan’s ambassador to the EU to remove her because of her incompetence to deal with trade issues, the prime minister recently extended her tenure for another one year.

At the same time, no proper working is being made for the package at the Geneva-based Pakistan’s staff to the WTO. Even Ambassador to the WTO Shahid Bashir is working without any extension for the past few months.

“All these issues have further complicated the implementation of the package,” the official added.


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