October 22, 2010Print : Business
STRASBOURG: Euro MPs called on Thursday for extra protection for European businesses in trade concessions the European Union wants to give Pakistan to help the country recover from devastating floods.
Nuno Melo, a conservative Portuguese lawmaker, warned that the proposal to lift import duties on 75 Pakistani products would be a “tragic decision for Europe.”
Melo called for forms of compensation to be installed such as quotas on textile products, a vital industry in Portugal, Greece and Spain, countries he said were already enduring a “serious crisis.”
The impact “may not be great” for the 27-nation bloc as a whole, “but for us it would be huge,” he stressed. Italian Liberal lawmaker, Niccolo Rinaldi, also urged the European Commission, the EU’s executive arm, to take measures to “avoid creating a precedent” for other countries and “worsen the crisis” in the European textile industry.
EU Trade Commissioner, Karel De Gucht, sought to reassure the 736-member legislature in Strasbourg, insisting that an analysis showed that the impact on European products would likely be “modest.”
The trade advantages, which must still be approved by the World Trade Organisation, will have a lifespan of three years, De Gucht said. He also dismissed fears that the measures would exacerbate unemployment in Europe, calling such talk “not serious.” — AFP
Our correspondent adds: Earlier this month, the EU announced to suspend tariffs on 75 types of Pakistani-made goods which account for 27 percent of exports to the EU. The plan foresee suspending tariffs for up to three years, and will include monitoring to ensure that exporters from other states do not try to smuggle their wares into Europe via Pakistan to avoid duties.
However, many textile manufacturers in Pakistan term the package unimpressive as it mainly focuses on raw materials without including the country’s main textile items like bed linen and knitwear.
Traders complain that the package will offer little to create employment besides depriving industries of raw materials due to its export to the EU. The government has prepared a “wish list” of 15 items, in addition to the 75-item package.
“The EU will benefit more from the (existing) package than Pakistan,” said Pakistan’s commerce secretary, Zafar Mahmood, in a meeting with stakeholders last Friday.
The package needs clearance from the EU governments, the European Parliament and members of the World Trade Organisation (WTO), including India, Sri Lanka and Bangladesh, which compete with Pakistan for textile sales to Europe.
The WTO is likely to give a green signal to the package on Nov 22, after which Pakistan will start availing its benefits from Jan 2011.
Pakistan’s total textile exports stood at ovr $10 billion in 2009/10 (July-June), of which about $6 billion worth of textile products went to the United States and the EU. Total exports to the EU totalled $4.4 billion in 2008/09, according to official statistics.