The Council for Trade in Goods of the World Trade Organisation at its meeting in Geneva on Wednesday unanimously approved a Pakistan-specific EU trade package (Autonomous Trade Preferences) which would allow tariff-free export of 75 Pakistani products to European Union markets over the next two years. The long awaited trade deal between Pakistan and the European Union has faced delays over objections raised by India and Bangladesh among other countries.
A foreign office statement said the package will enter into force after it is formally approved by the WTO General Council in March this year.
In recognition of Pakistan’s sacrifices against extremism and Al-Qaeda, taking into account the economic losses suffered due to terrorism and devastating floods in 2010 the EU leadership decided to give Pakistan specific tariff concessions in the form of autonomous trade preferences under which 75 Pakistani products would benefit from duty free access to the European Markets. These Trade Concessions however required a WTO waiver. The EU applied for the WTO waiver in January 2011. The waiver request enjoyed the support of 150 of the 152 members of WTO. India out rightly opposed it and Bangladesh expressed certain reservations demanding compensation.
“This is wonderful news for Pakistan and will augur well for the country. The approval of the Pak-EU trade deal demonstrates the growing Pak-EU relations and is evidence of EU support for the economy. This trade facility will have a long term positive impact on trade between Pakistan and the EU,” Pakistan’s ambassador to Belgium, Luxembourg and the European Union, Jalil Abbas Jillani said while exclusively talking to Profit.
This trade deal would help boost exports by $300 million. The foreign office and the government had been working towards creasing out differences to secure the EU preferential trade deal. In an earlier exclusive report by Pakistan Today, sources pointed out that “the issue of the removal of Indian objection from the EU unilateral trade concession was first taken up by Prime Minister Yousaf Raza Gilani at Mohali, in his meeting with the Indian Prime Minister Manmohan Singh during the ICC World Cup Semi Final.” In the last meeting of the WTO committee for trade in goods, Bangladesh had objected to the deal however upon investigation in an exclusive report filed earlier, sources pointed out that it was a ‘miscommunication’ and the trade package would certainly go through in February.
Official sources in the Ministry of Commerce while talking to Profit have revealed that on the 14th of this month, the matter would be discussed at the General Council of the WTO that will approve the package. After that, the matter will be discussed involving a trialogue of the EU Commission, the EU council and the EU parliament to discuss the implementation process. Jillani explained that the European Union member states following an internal debate gave their collective approval for this trade package last year. It was only after the approval that a European commission was authorised to apply to the WTO for a waiver. In the WTO, all 27 EU member states speak with one voice represented by a single EU ambassador he said. In reply to whether these concessions were being sought in a permanent capacity or if there was a timeline for these concessions, Ambassador Jillani said that these concessions would only be temporary and are intended for a 2-3 year period as a bridging mechanism till 2014. This is due to the fact that in 2014 a new GSP scheme would come into effect where Pakistan would be well placed to benefit from duty free treatment under GSP Plus for a much larger number of products.
While talking about how the recession in Europe would affect Pakistan’s exports to Europe after the duty free access for 75 products, Ambassador Jilani said there is little likelihood of such an impact. This is because the maximum impact of European austerity would naturally be on the consumption and import of luxury and higher end products. Since the imports from Pakistan do not fall in this category therefore Pakistan’s exports to the EU are not expected to be adversely affected. “Pakistan is thankful to all WTO member countries for their support. The government of Pakistan particularly appreciates the European Union and its member states for their commitment to help Pakistan revive and stabilise its economy through trade,” the foreign office said in a statement.
