Indian opposition scuttles EU trade deal

[ares]

Indian opposition scuttles EU trade deal

By Shahbaz Rana
Published: March 22, 2011

WTO panel rules against concessions being offered to Pakistan by Europe.

ISLAMABAD: Pakistan appears to have lost a five-year fight to gain preferential access to European markets after the World Trade Organisation (WTO) ruled on Monday that the European Union’s (EU) tariff concessions offer to Islamabad violated international trade agreements.

The WTO’s committee on customs valuation of the Council for Trade in Goods, known as the CGT, on Monday took up the matter of the EU giving Pakistan a limited 3-year tariff concession on 75 items. The committee did not approve the concessions after the EU disclosed that the con sultation process with countries that oppose the trade deal for Pakistan was incomplete.

Despite stiff opposition from India, the EU is still hopeful that a solution can be found in time for the WTO General Council meeting.
“It is, of course, disappointing that some members of the WTO still oppose the trade concessions for Pakistan,“ said Lars-Gunner Wigemark, the head of the EU delegation to Pakistan. “Consultations are ongoing with all countries concerned, in particular India, and we are hopeful that the systemic and economic issues involved can be addressed in a satisfactory manner.“

The EU had offered those concessions to Pakistan in the aftermath of the 2010 floods, which devastated large parts of the country. Under the global trade rules, the package had to be endorsed by the WTO. The rules bound the CGT to make a decision on the matter within 90 days. The committee convened three meetings within the stipulated time.
The EU did not formally put the deal forward for a vote, as its rejection would have closed the doors on the deal permanently.

The matter has now been referred to the WTO’s General Council that will tentatively meet on May 3, ten months after the July 2010 floods. For the last six years, Pakistan has been striving for tariff-free access to European markets, but its efforts had been rebuffed by the EU.
Islamabad’s chances for succeeding in securing a deal with the EU increases after the 2010 floods, which created a sympathetic atmosphere in Brussels.
In September 2010, the European Council approved tariff concessions on 75 items.

The total worth of the items exported under these tariff lines is $1.03 billion and the average tariff on these items is 8.86 per cent. Under the EU proposal, the tariff would be reduced to zero for a period of three years.

If the WTO approves the package, and it also gets endorsed by the European Parliament, it will increase Pakistan’s exports to the EU by $350 million over three years.
Published in The Express Tribune, March 22nd, 2011

Indian opposition scuttles EU trade deal – The Express Tribune

 

[Tin Man]

This has a potential to evolve into major troll war.....anyway...why preferential treatement?

 

[ares]

This has a potential to evolve into major troll war.....anyway...why preferential treatement?

We would have had no objections, had this been just been preferential treatment and European Union which was eager to aid Pakistan, was doing it out its own pockets ..but this kind deal would have meant that Pakistani traders are being given more business at the cost of EU's other trading partners.

 

[ameer219]

We would have had no objections, had this been just been preferential treatment and European Union which was eager to aid Pakistan, was doing it out its own pockets ..but this kind deal would have meant that Pakistani traders are being given more business at the cost of EU's other trading partners.

Deat Ares

What are the other solutions you think would be good so as to allow minimising the the impact other trading partners will be dealt with as well as to provide Pakistan some sort of trade?

I am all for a deal, as long as it doesn't seriously damage trade relations EU has with other nations.

 

[ares]

Deat Ares

What are the other solutions you think would be good so as to allow minimising the the impact other trading partners will be dealt with as well as to provide Pakistan some sort of trade?

I am all for a deal, as long as it doesn't seriously damage trade relations EU has with other nations.

EU wants to help Pakistan, but this way it is not directly paying for it ..there is limited demand for goods in EU market and if they give tax concessions to certain country's goods ..they are just asking other countries to foot the bill, of its own desire to aid.

What EU wants, is to aid Pakistan(as its is passing through a bad phase), then it should directly aid Pakistan as rest of the countries are ..I understand there is lot skepticism regarding direct aid not reaching the needy..but it can be distributed through NGO's to see to that.

Alternately EU can directly invest in Pakistan(FDI) in trading sector like textiles, which would increase the competitiveness of Pakistani goods in the international market, thereby increasing its share in global market. But that wold involve long term presence of Europeans in Pakistan,.

 

[Kinetic]

Its not just India but Bangladesh and other RMG exporting countries protested against proposed concession given to Pakistan. Even China remained silent about the matter. This would give Pakistani exporter an edge over other countries who will not be able to compete with them.

 

[Capt.Popeye]

Its not just India but Bangladesh and other RMG exporting countries protested against proposed concession given to Pakistan. Even China remained silent about the matter. This would give Pakistani exporter an edge over other countries who will not be able to compete with them.

In the South Asian region, the objections to this deal were from Bangladesh and Srilanka apart from India. The commodity sector that would be majorly impacted was the RMG sector and the greatest effect would have been on Bangladesh first and Srilanka later. Bangladesh is very heavily on this sector and is pushing hard to build up exports with a lot of investments. That would be greatly threatened. So far as India's RMG exports are concerned, exports to the Euro-Zone has plateaued for some time and is indeed likely to yield ground to Bangladesh and to some extent Srilanka over time. So all three countries took a somewhat congruent stand with the EU on this proposal.