New Delhi has conveyed to Islamabad in plain words that it will not support European Union''s Pakistan specific trade package at the World Trade Organisation (WTO), well-informed sources in Foreign Office told Business Recorder. "India has refused to support EU''s request for waiver on grant of additional autonomous trade preferences to Pakistan in the WTO Council for Trade of Goods," sources added.
Indian Minister for Commerce and Industry, Anand Sharma, stated that if the EU intended to provide financial support to Pakistan''s flood affectees, it should do so directly, sources continued. Last year, EU approved trade concessions to Pakistan in a move to help the country recover from July/August floods which caused nearly $10 billion damage. The EU package, which would have been implemented from January 1, 2011, covered 75 Pakistani export items - from cotton sheets to clothing and ethanol - that would have been allowed to enter the EU free of duty.
After approval from its parliament the EU submitted its trade package to the WTO. This was blocked by Bangladesh and India. Sri Lanka supported the package after Secretary Commerce Zafar Mahmood visited Sri Lanka during which he requested the concerned authorities not to challenge the trade package approved by the EU as this package will not hurt Sri Lankan textile export related interests in the European countries.
The sources said, Commerce Minister, Makhdoom Amin Fahim, wrote a letter to his Indian counterpart, seeking his country''s support on the EU trade package at the WTO Council of Trade and Goods. According to sources, Commerce Minister''s letter dispatched on January 28, 2011 reached the office of Indian Minister for Commerce and Industry on February 21, 2011, three weeks after its departure from Islamabad. Probably, Pakistan Ministry of Foreign Affairs and Indian Ministry of External Affairs are responsible for this delay.
Sharma, sources said, argues that India is deeply conscious of the widespread destruction caused by the unprecedented floods in Pakistan and the need for immediate relief and assistance to the people in re-building their lost economic assets. However, he did not favour trade incentives to Pakistan meant to support flood affectees.
"Pakistan is an important member of our South Asian family and India is committed to a prosperous and peaceful Pakistan. This is why we have impressed upon EU to provide direct, immediate and effective assistance to the flood affected people in Pakistan. A trade related measure which is unprecedented in the WTO and also does not ensure that the assistance directly reaches the intended beneficiaries may perhaps not be the best way to reach goals," the sources quoted Anand Sharma as saying in his letter to his Pakistani counterpart.
Sharma also argues that there is the attendant difficulty that the measures have not yet found the necessary consensus among the WTO membership. Secretary Commerce, Zafar Mahmood, also met Indian ambassador and Lesotho ambassador to WTO so that they might not create any problem in the passage of EU trade package. However, his efforts remained unsuccessful as India was not willing to support Pakistan at the WTO.
Last month Commerce Ministry took credit for its following achievements: (i) unilateral concessions on 75 items by European Union; and (ii) 284 item tariff lines with China and (iii) inclusion of more areas of Pakistan and more tariff lines in RoZs (Reconstruction Opportunity Zones -USA). All three claims of Commerce Ministry are inaccurate and there is no progress on either of the three so far.
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