KARACHI – India, while opposing the trade concession to Pakistan granted by European Union (EU) in the World Trade Organisation (WTO) is in a weaker position to oppose the draft bill. According to experts, India which has shown serious reservations over the draft bill forwarded by EU for unilateral market access to Pakistan citing the contravention of World Trade Organization’s (WTO) rules, could not muster adequate points to back up its position in the first session of WTO. Given India’s diversified exports and limited dependence on textile exports, the limited concession to Pakistan would not realistically affect the overall export scenario of the neighbouring country, they said.
As the textile sector has a share of only four to five percent in the total Indian export base, the EU countries including other powers are in a position to convince Delhi to back down on its opposition to the bill in the WTO during the next session, experts opined. Referring to the points raised by India in the Council for Trade in Goods of WTO, they said, that it had mostly highlighted common concerns regarding the change of rules to a particular country and was unable to show any negative impact of the concession on the Indian economy.
The Indian ambassador, who had shown concerns in a previous meeting of WTO over the “waiver from GATT Articles I and XIII”, concerning autonomous preferences for Pakistan, had said that temporary tariff concessions could not improve the lives of the people. He also claimed that FDI to Pakistan would be unchanged after the waiver. In one of the weaker arguments raised by the Indians, it said that the tariff concessions would not benefit the actual affectees while the gainers would be existing producers and their employees due to greater number of contracts.
The ambassador said that the flood affected areas are far from industrial centers and the victims of floods would not benefit from the concessions. Another objection raised by the ambassador, referring to Pakistani newspapers, said that, “since the cotton crop is also badly affected and its price in the international market has risen to unprecedented level, the manufacturers and exporters of downstream products in Pakistan have rejected the package.” Experts noted that this could be addressed by Pakistan through focusing on the exporters’ concerns.
While asking for more concessions from the EU prior to approval through the WTO, India has voiced its concerns that the waiver from MFN obligations went against the cardinal principles of multilateral trade under both the GATT and WTO. Accordingly, a well meaning gesture by the EU would also cause heavy damage through trade divergence and impact on poor workers in less developed countries (LDC) and developing countries.
It is worth mentioning that the Indian ambassador, however, had recognised the devastation caused by floods in terms of damaged crops, loss of infrastructure and human misery, saying that “my heart goes out to the people of Pakistan”. “India considers EU’s proposal indeed a noble gesture. Though concerns were also voiced by Bangladesh and Peru; they had not opposed the draft bill in the WTO meeting held on November 30. According to sources, with the next meeting likely to be held by March 2011, the government should try to make a concerted effort to win over India before the next meeting.
