Pursuing narrow trade diplomacy, Pakistan expect Brussels will give final nod to its one-time tariff waiver pact shortly that would help boost proceeds from Pakistan's exports to EU to $900 million, reveals talk with economic experts on Tuesday.
Some economists, however, warned policy makers that seeking EU market access without improving the quality and capacity of manufacturing units would yield no tangible results in enhancing export proceeds creating more employment for the job starved youth especially in areas devastated by the recent unprecedented floods.
However, an official of ministry of commerce told this scribe that this one-time window of opportunity would help in giving the booster dose to the overall economy even if its impact did not reach directly to the floods affected people. An economist N. Fatima suggested that Pakistan should revisit its trade diplomacy by seeking market access from the major allies in war-on-terror ie, Japan, Australia, Canada, South Korea and United States.
"The proposed EU concession offer could be a solid base for negotiating similar arrangements with other allies," she said.European Union has decided in principle last month to offer one time tariff holiday to Pakistan on selected products to support the crisis-hit economy of the country, as it is struggling for survival after the devastating floods.
The official said that EU is in the process of internal consultation and would hopefully share their consensus offer in two weeks with Islamabad. He said that exports could only increase to EU countries in case zero duty is offered to Pakistan, as compared to other regional competitors like India, China etc. India, Pakistan's main competitor, would enter into a free trade arrangement with EU by end of this year. Therefore, a nominal concession to Pakistan in this agreement would not be enough to steer the country out of the quagmire.
Currently, EU members will develop consensus on three points: list of products on which tariff concessions will be offered; the extent of tariff concession and the duration of concessionary arrangements. At the same time, though Pakistan would be the main beneficiary of the move, the EU decision will be on the basis of "Most Favoured Nation" clause, as per the WTO, which will also allow India and China to boost their exports to the EU.
N. Fatima suggested Pakistan's diplomats to utilise all their energies in seeking zero duty and its early implementation, which will definitely increase exports to EU market. It has been reported that commerce ministry has handed over a wish list of items to the EU authorities for seeking reduction in duty. This list has been finalised in consultation with the relevant stakeholders, which includes among other textile and clothing sectors.
According to sources, the EU countries are divided on the duration of the concessions to be offered to Pakistan. The French support offering this wavier just for one year, while the British backs a proposal until 2014. Pakistan is an exporter of low value-added textile and clothing products. The tariff concessions would kick off exports of these products in the EU markets.
Statistics shows that few products from Pakistan enter the EU duty-free or at a reduced rate of duty, but textile and clothing products such as bed linen and towels, which account for around 65 per cent of its exports to the EU, still face nine to 12 per cent tariff.
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