The top bureaucracy at Prime Minister's Secretariat, Commerce Ministry and in Geneva is reportedly responsible for an 'embarrassing situation' that developed recently at the World Trade Organisation (WTO), and India and Bangladesh moved to block the European Union's trade package designed to provide relief to Pakistan's flood affectees.
"EU's trade package has been delayed for six months, at least, because Pakistan failed to pursue both countries diplomatically," commented an official privy to this development. The government dispatched Commerce Secretary Zafar Mahmood to Sri Lanka where he convinced Sri Lanka authorities that trade incentives, extended by the EU for Pakistan, would not affect their exports.
The Prime Minister had rejected a summary submitted by Commerce Minister Amin Fahim to undertake a scheduled visit to Bangladesh in an effort to convince officials there that the EU trade package to Pakistan would have no impact on BD. "Fahim's meetings with the Bangladesh President and Commerce Minister were confirmed, but at the eleventh hour the summary about his visit was rejected, without any reason," sources said.
Another official told this scribe that the Ministry was apprised by phone that the Prime Minister desired the Commerce Minister to stay in the country. However, this information was not confirmed by any other source. "India is Pakistan's rival, and this treatment was expected from New Delhi; but Bangladesh understandably may have reacted over the cancellation of Commerce Minister's visit," the official added.
Recently, European Union's Ambassador in Pakistan, Jan De Kok, had warned Pakistan that opposition from India, Bangladesh and Sri Lanka might put the trade package in doldrums. The EU governments approved trade concessions to Pakistan, a move to help the country rebound from July/August floods which caused nearly $10 billion damage.
The final package, which was to be implemented from January 1, 2011, is now delayed for six months, and is less extensive than the EU had originally hoped, but still covers 75 Pakistani exports--from cotton sheets to clothing and ethanol--that will be allowed to enter the EU free of duty. The EU has not accepted Pakistan's request for replacement of 15 tariff lines, which, according to the Textile Ministry, would benefit Pakistan's textile industry. The duty waiver now needs approval from the WTO and the European Parliament.
EU industries, that feared losing market share to cheaper Pakistani imports, led to the decision to suspend tariffs for two years, with a third year granted after an assessment, EU diplomats said. The compromise envisaged setting a duty-free quota on the most sensitive products on the list--some fabrics, towels, women's jeans and socks that would lose their duty-free status if exports to Europe rose by more than 20 percent per year.
All remaining items would also lose their tariff suspension if there is a surge in their exports to Europe, under a safeguard mechanism whose method is yet to be agreed, diplomats said. Finally, the compromise has cut the duty-free allowance of ethanol imports from Pakistan to 80,000 tons, from the originally proposed 100,000 tons.
"Now we have to review our diplomatic efforts to convince India and Pakistan that Pakistan's exports to EU would not hurt their exports," the official added.
Comments
Comments are closed.