Negotiations for Pakistan’s inclusion in EU GSP-plus begin

ISLAMABAD: Pakistan and European Union Joint Commission here on Monday started three-day deliberations to discuss possibility of including Pakistan in EU GSP-Plus arrangement 2009-2011 and initiations of Free Trade Agreement (FTA). The sub-groups namely sub group on trade; sub group on development and economic cooperation, sub group on migration and civil issues and sub group of science and technology started their technical level negotiations to look into the possibilities of further strengthening of bilateral relations. The four sub-groups would present the recommendations to the commission meeting that is scheduled on March 18 at Economic Affair Divisions. Sub-group on trade discussed important issues like Doha Development Agenda, GSP-Plus scheme for 2009, anti-dumping duty on Pakistani bed linen exports, de-listing of fishery export companies of Pakistan, technical assistance and listing of Pakistani Basmati as Pakistani variety. However, during the GSP –Plus arrangement review for 2009-2013 by European Commission, the EC was not able to include Pakistan in the beneficiary countries on technical grounds. Soon after, Pakistan demanded EC to review its decision on GSP + agreement and start Pak-EU FTA dialogue. A joint study has been conducted by the University of Sussex to assess the impact of free trade between Pakistan and the EU member countries. The current round of negotiations between Pakistan and EC findings of the said study would also be analysed to reach at a conclusion. Pakistan EU bilateral trade volume has reached at $10.8 billion during the last fiscal year 2007-08 registering an increase of $1.4 billion as compared with previous fiscal year 2006-07. The EU has tripled development assistance to Pakistan to 200 million Euros for 2008-10 and is engaged in number of projects relating to education, health, environment and trade sector. The main emphasis by Pakistan is to achieve durable, predictable and reciprocal trade relationship with the EU in the form of an FTA. This has also been stressed by the president of Pakistan, Prime Minister of Pakistan and Commerce Minister in their meetings with their counterparts and EC Commissioner, where need for institutional relationship was acknowledged. The EC is of the view that its “Global Europe Strategy” focuses on multilateralism as the preferred option but FTAs are also negotiated based on two-fold criteria i.e. Market size and growth and the level of protection against EU exports. Pakistan argued that it satisfies the criterion of market size and growth of the EU and the current level of protection against EU exports are minimal, which may not be treated as a penalty for Pakistan. Both sides are also exchanging views on further strengthening of trade relations and looked at options for future consideration and are in agreement that the Sub Group on Trade will monitor the impact of EU’s trade policies in the region on Pakistan’s preferential access to EU markets and will identify possible options for improvement in bilateral trade. Pakistan has criticised European Union’s tariff peaks and tariff escalations, especially in textile, clothing and leather products at World Trade Organisation while highlighting the dichotomy in the European trade regime. During the Trade Policy Review of the European Commission Pakistan has questioned EC’s trade regime. Pakistan’s viewpoint is that EC is Pakistan’s single largest trading partner, accounting for 26 percent of its total exports and 17 percent of its total imports. However, more recently its trade with EC has not been keeping pace with its international trade growth.