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Goods Council Approves EU Trade Concessions for Pakistan - Salman - 02-09-2012 12:37 PM
Goods Council Approves EU Trade Concessions for Pakistan
Pakistan is set to receive a package of trade concessions from the EU, over a year after Brussels initially tabled its request for a WTO waiver. The flood-battered Asian country will receive preferential treatment for 75 tariff lines, though not all of those will receive full liberalisation. The granting of the WTO waiver follows a politically fraught process that saw the original trade package altered in response to concerns from some members.
The WTO Council for Trade in Goods, meeting on 1 February, approved Brussels’ request to temporarily waive tariffs on imports from Pakistan. The agreed waiver will allow Brussels to temporarily discriminate in favour of Islamabad, in an effort to help Pakistan’s economy to recover from the devastating floods of July 2010.
Under WTO rules, members are required to secure a waiver from all other WTO members if they wish to deviate from the ‘most favoured nation’ obligation.
The package of trade concessions has been forwarded to the WTO General Council for adoption at their meeting on 14 and 15 February. The measures, if adopted, would be in effect from 1 January 2012 to 31 December 2013.
The approval comes over a year after the EU initially tabled a request to grant Pakistan tariff preferences for textiles, ethanol, and other goods.
Pakistan currently benefits from the EU’s Generalised System of Preferences (GSP), which provides Pakistan with preferential access to the EU market. The GSP allows Pakistan to export to the EU more than 3,000 tariff lines duty free; Islamabad is also granted reduced duties on another 3000 tariff lines under the scheme.
The two trading partners also have a Cooperation Agreement that entered into force in September 2004, with the objective to promote the increase and development of two-way trade between them.
“Under normal circumstances, the combined effects of the Cooperation Agreement and the GSP preferences would allow to generate trade and to support the objective of a harmonious economic growth in Pakistan in respect of the WTO obligations,” the final waiver request reads.
“However, the EU considers that, as a consequence of the [2010 floods], an emergency response is required.”
The waiver’s approval was lauded by Pakistani government officials, with Foreign Office Spokesperson Abdul Basit telling The Dawn - a leading Pakistani newspaper - that the government “particularly appreciates the European Union and its member states for their commitment to help Pakistan revive and stabilise its economy through trade.”
“I’m very happy. It was a long drawn out exercise, and something of a success for diplomacy,” Pakistan’s ambassador to the WTO, Shahid Bashir, told Reuters.
The EU is Pakistan’s largest trading partner, receiving nearly 30 percent of Pakistan’s exports - worth nearly €3 billion. Pakistan’s trade with EU is primarily composed of textiles - 70 percent of exports to EU - followed by leather products, which make up 13 percent of exports.