The European Union (EU) Ambassador to Islamabad Lars-Gunnar Wigemark said Sunday that liberalisation of trade with India would bring the prices down in Pakistan and could gradually create conducive ambiance to bilaterally tackle more complex issues like Kashmir.
The ambassador said that Prime Minister Nawaz Sharif’s initiative to bolster trade with India was ‘very positive’ and that there was more ‘scope for regional trade’ for Pakistan than with the outside world and the potential ‘is far greater with India’.
There was a very clear intension by the government and the prime minister personally to try to move forward on trade liberalization with India’ which would bring the prices of commodities down and the consumers will benefit from increase in trading relations between the two nuclear capable neighbors.
He said there would be more competition and some companies and industries would feel exposed if they were to open up trade with India, however, some vulnerable sectors of the Pakistan economy could be given protection by the government.
The EU closely followed developments in Pak-India relations and it was welcomed that there had been some progress in improving relations between the two countries during the last couple of years.
“It is unfortunate that the composite dialogue is stalled,” said the EU envoy and hoped that after the coming elections in India, she would review its policies also towards Pakistan.”
“Our experience in the European Union has been to have a gradual process whereby, for instance, start opening up trade, opening up possibilities to travel more freely,” said the ambassador.
“Visa liberalisation, business-to-business contacts, people-to-people contacts in general will help build a greater understanding and also to deal with some of the animosities, prejudices between Pakistan and India,” he said.
When questioned if an incident on the Line of Control (LoC) could impact trade between Islamabad and New Delhi, the EU ambassador said whenever there was an incident ‘the whole relationship suffers’. But there seemed to be a willingness on both sides to overcome this tension.
“When it comes to Kashmir issue, I personally think that if you start trying to resolve the whole Kashmir conundrum, this is very difficult.”
“Whenever something goes wrong in Kashmir, India would tend to point the finger to Pakistan and Pakistan would point the finger at India.”
Fielding a question on the EU decision to grant Pakistan almost zero tariff for its exports to EU under the Generalized System of Preferences (GSP) Plus, he said it would give better market access to your companies and products made in Pakistan to the whole of European Union which had some 500 million inhabitants. The EU would like to enhance its trade with Pakistan, he added.
He said GSP Plus would have an overall impact of $800 million trade with Pakistan per year though others had estimated more exports flowing into the EU under this scheme.
“It is very much now in the hands of the business community, both here in Pakistan and the European Union to utilise this facility available since January for boosting trade between the two sides.
Lars-Gunnar said the current overall trade between the EU and Pakistan was 8.5 billion Euros per year which was slightly surplus in favour of Pakistan and they would expect that would rise in the coming years to about 10 per cent in the first year or two.
Emphasising on the new areas of trade, the EU ambassador said it should not only be confined to ‘just bed linen and towels’ but should also include readymade garments of good quality because there was higher profit margin and because Pakistan was better placed in the region as both China and India did not enjoy GSP facility. Of the 10 countries which were given GSP status, Pakistan was the largest country with the largest economy, he added.
Lars-Gunnar appreciated many initiatives taken by Prime Minister Nawaz Sharif government in creating business-friendly atmosphere by ‘giving special incentives’ like introducing loan schemes for young entrepreneurs.
“All of that is helpful and we see some positive signs already in the economy,” he said referring to Pakistan agreement with International Monetary Fund and overall positive austerity programmes of the government, he said.
On government decision to have dialogue with the Tehreek-e-Taliban (TTP), he said it was up to Pakistan to decide how it wanted to proceed with the overall security situation. Answering another question, the ambassador said whatever the decision it made, the EU would support it because it would be a decision by democratically-elected government.
On counter terrorism, he said the EU welcomed the government’s comprehensive strategy to fight terrorism.
“I think it is very welcomed as you know for the first time ever the government has announced a comprehensive security strategy.”
“We have about 70 million Euros that we are spending on counter-terrorism related programme under which equipment, vehicles to deal with explosives and improvised explosive devices were being provided to Pakistan, he added.
The Prime Minister’s advisor on National Security and Foreign Affairs, Sartaj Aziz, will visit Brussels in last week of this month to have a second round of strategic dialogue on counter-terrorism with the representatives of the European Union. Both the sides had held the first round of these talks in Islamabad.