'EU will help Pakistan utilise the full potential of GSP+,' Jean-François Cautain, Ambassador of the EU to Pakistan

Jean-François Cautain has been serving within European Union (EU) institutions since 2001, mainly in the field of EU external relations. His main areas of expertise include: international cooperation and assistance to developing countries, political analysis and dialogue, post-conflict situations and civil society. He has previously served as the Head of Operations of the European Commission Delegation to Afghanistan (2001-05) and as Head of Political, Press and Information Section of the European Commission Delegation to Thailand (2005-09). He has also served as the EU's Team Leader in Policy Co-ordination Division, Brussels. In November 2011 he was appointed as the first resident European Union Ambassador to the Kingdom of Cambodia. In October 2014, he became the Dean of the Diplomatic Corps. He left Cambodia in summer 2015 after being appointed as Ambassador to Pakistan.

Jean-François Cautain holds a Masters in Development Management from the London School of Economics and a Doctorate in Veterinary Medicine. BR Research sat down with the EU Ambassador earlier this week for a wide-ranging discussion on trade, development, and regional connectivity. Edited excerpts are produced below:

<B>BR Research: What is the main role of the EU delegation in Pakistan?</B>

<B>Jean-François Cautain:</B> The European Union is a rather complex organisation. Whereas we have a similar mandate as all other embassies, there are two fields where we are different. First one is consular - we don't deliver visas, which are the EU member states' responsibility. Second one is trade - we don't engage in trade promotion, which again is the responsibility of individual member states.

Our responsibility is to ensure that regulatory framework of Pakistan is respecting the "rules of the game" of international trade. That is, we deal with Pakistan on behalf of the EU member states on issues such as trade policies. That is the case all around the world.

<B>BRR: What about development? Other EU member states such as United Kingdom and Germany are running their development cooperation programs in Pakistan; and so does the EU mission.</B>

<B>JC:</B> We have, since 2009, a new European Treaty, the Lisbon Treaty, which gives the EU a larger mandate when it comes to external relations. Part of it is related to development cooperation. It means that besides bilateral development cooperation that the EU mission has with Pakistan, the EU mission also has the mandate to foster co-ordination of all EU assistance, including that of EU member states, in Pakistan. It is what we call in our jargon Joint Programming. We are at an infant stage in Pakistan yet but the plan is that EU member states and the EU work through the same framework. We have regular monthly meetings at development consular level where we discuss all aspects of development cooperation with Pakistan. Same is the case all around the world where we have cooperation programmes.

<B>BRR: What is the geographical distribution of EU's projects in Pakistan?</B>

<B>JC:</B> Since we have started the EU-Pakistan Multi-annual Indicative Programme (2014-2020), we have about 50 percent of projects in Sindh, roughly 30 percent in Khyber Pakhtunkhwa (KP), about 10 percent in Balochistan, and the rest in Punjab or at national level. Our focus is to work more in Balochistan and Sindh due to development situation in those provinces but also because other large development partners are very much involved in the other provinces. We are also working work with the Government of Pakistan to support FATA reforms, and also support any merger of FATA with KP, which is politically really important.

<B>BRR: Let's talk about trade and GSP+. EU is the largest market of Pakistani exports - about 35 percent Pakistan's exports go to the continent. That share has come up from 27 percent in 2013, so there has been growth. But it has been noticed that despite GSP+, Pakistan has been losing share in the garments and apparel market due to other low-cost countries such as Bangladesh, Turkey, and India. What, aside from lower cost, differentiates other major exporters to the EU from Pakistan?</B>

<B>JC:</B> As you know, global exports of Pakistan are declining, which is clearly an issue. I would put that issue in parallel to the difficulty Pakistan has in attracting FDI. It seems to me that the buyers of exports not only look at quality and price, but also where they are sourcing their products from. It is valid also for FDI. While there are issues such as cost of doing business, I think Pakistan is particularly suffering from a bad image. That is something Pakistan should work on. We know that Pakistan has had difficulties over the last decade, mainly linked to instability within the country itself. I think it has given Pakistan a reputation of a difficult country. Buyers and investors want to be in confidence. Dealing with a country that has instability is not attractive for them.

I think Pakistan has put that difficult period behind. There are still issues, but there is more stability, and democracy has come back to the country. We have also seen bold steps being taken in fighting militancy. Pakistan needs to reinforce the message of positive things happening in the country. I think that Pakistan is not heard enough for the time being. It's also our work, as diplomats, to pass out message to our capitals that Pakistan is emerging and is a place to invest and source from.

<B>BRR: To what extent do you think there are non-tariff barriers that hamper Pakistan's exports to the EU?</B>

<B>JC:</B> Well, there are standards and certifications that are not easy to reach if you want to export products like fish, meat, fruits, etc. But there are exporters who manage to do it. We have had a very successful program, called Trade Related Technical Assistance (TRTA). The TRTA was implemented by UNIDO where we now have Pakistani companies improving their capabilities to comply with the EU norms.

I am very clear that the EU has to help Pakistan in using the full potential of GSP+, which is currently not the case. Textile, footwear, and leather, shouldn't be the beginning and the end of Pakistan's exports to the EU. Next year we are launching a rather large programme, focusing Balochistan and Sindh, to see how we can help SMEs there, mostly in agriculture sector, to become champions in exports.

From our side, perhaps we need to be more proactive in spreading the word about of GSP+, not only to the big guys but also more at the grassroots level to SMEs. We have an example in Chitral where we are helping small-scale gemstone makers who are now linking up with the international markets.

<B>BRR: Out of the 27 GSP+ conventions, how many is Pakistan in violation of? And is it the case that some conventions are more important than the others?</B>

<B>JC:</B>First of all, we need to keep in mind that all those 27 conventions are UN conventions, not EU conventions, and they are convention which Pakistan has voluntarily decided to be part of. We are obviously looking at some of those conventions that are not well-implemented compared to other conventions. Earlier this year, the EU released a GSP+ Review report for Pakistan, which showed that Pakistan has actually done better on labour-related conventions. It is not perfect, but it is better than compliance on human rights conventions, where we are now putting more emphasis. Also, on environment-related conventions, Pakistan is not doing too badly.

This report, covering the period 2014-2015, was described as a balanced report. It shows that Pakistan has complied with all the requirements in terms of reporting to the UN bodies for the 27 conventions - which was not the case before. All the conventions have been signed and ratified and all the reports have been submitted to the relevant UN bodies.

Now, we are expecting Pakistan to have concrete achievements on those conventions in terms of implementation - that is what matters and what will bring benefit to citizens of Pakistan. Now a GSP Monitoring Mission is here this week to discuss the issues with the Government of Pakistan. After more deliberations, the next review report will be issued in 2018.

We have other opportunities as well to discuss the implementation with the Government of Pakistan. We have an EU Pakistan Joint Commission where we meet every year, where we have different groups, including on human rights and good governance.

We are putting our efforts with the Government of Pakistan where situation needs improvements, such as conventions on torture, women's rights, rights of children, etc.

<B>BRR: What about the issue of death penalty?</B>

<B>JC:</B> The abolition of death penalty is, per se, not in any UN convention. There is no international convention banning death penalty. Unfortunately! What you have is ICCPR - International Convention on Civil and Political Rights - where there is a reference to death penalty being limited to exceptional cases and resulting from due judicial process. What we are telling Pakistan is that when it comes to this convention, we are not sure that the way that death penalty is currently being applied in Pakistan is compliant with the ICCPR convention. We don't feel that death penalty is being applied only in exceptional cases. And we have examples showing that it is not always a result of a fair judicial process.

Then, we have our principled stance on death penalty with Pakistan - as EU, we are against death penalty, by principle. It is not that because the EU is against death penalty we will stop GSP+. Again, the link to GSP+ is the proper implementation of the ICCPR. We are discussing this issue with Pakistan.

<B>BRR: Does your office also offer technical capacity building vis-à-vis those conventions?</B>

<B>JC:</B> We do. We have just decided to allocate Euro9.6 million for human rights program, with a strong focus to help the Government of Pakistan on implementing these 27 conventions. When GSP+ was granted to Pakistan, a treaty implementation cell (TIC) was set up by the Pakistani PM for GSP+ related implementation - now the TIC is part of the Cabinet Secretariat. As soon as this programme will be signed, it will help the TIC both at federal level and provincial levels for implementation.

<B>BRR: UK, which is one of Pakistan's major trading partners within the EU, may soon be leaving the EU. How will that impact the GSP+ deal?</B>

<B>JC:</B> Firstly, the UK has not left the EU. The people of the UK have expressed their wish to leave the EU through a referendum. So far, it is a UK issue, until it comes to the EU after the triggering of Article 50 of the EU Treaty. I cannot go further than that. As an EU Ambassador, I cannot speculate as to what would be the situation if Article 50 is activated and what would be the deal.

<B>BRR: We understand that it is not your office's job to facilitate investment, but what is your take on this perception that European investors were caught sitting on the fence while CPEC became a reality? Besides, EU's global FDI outflows are falling but in Pakistan their trend in far steeper, even though Pakistan is a big market.</B>

<B>JC:</B> I would go back to the image problem. People see Pakistan where terrorism is present. I think that is a deterrent for many investors. But some of our member states are large investors in Pakistan. Take the UK, for instance. It is clear that it has to do with historical links. Other EU member states are more present in some African countries where the political situation is difficult. There also, it is the result of history. Networks, when present, can help guide investors in post-conflict situations.

<B>BRR: But terrorism is mostly present in north-west of Pakistan, not where the bulk of industry and consumer population resides.</B>

<B>JC:</B> I agree. But that distinction is only apparent to those who give a closer look to Pakistan. And I am not sure that they do that. As the EU diplomat here, I feel it is my job to help changing the narrative on Pakistan. I feel that it is unfair to Pakistan, despite having been through difficult times, to continue being seen in a negative light. In the context of investment, what I am exploring with the Commerce Minister is to offer him a platform in Brussels in the frame of the European Business Forum some time soon.

<B>BRR: Terrorism in this region apparently has a lot to do with geopolitics. What is your take on the future of regional cooperation in South Asia, especially in relation to the recent Indo-Pak tensions, and the rising role of China in the region?</B>

<B>JC:</B> Saarc has had difficulties as a regional body to integrate member states. I have been told that intra-Saarc trade is five percent - in the EU, intra-continental trade is 80 percent! China is a major power, and it has likely filled the trade gaps in South Asia that Saarc nations couldn't fill among themselves.

Countries in the region need to work together. The China-Pakistan Economic Corridor (CPEC) could be a game-changer not only for Pakistan but also for region if it is well-played, if different regional players accept one day to put aside political issues to start working on trade issues. CPEC should not become a big motorway from Karakoram Highway to Gwadar only. But if CPEC takes into account Pakistan's western side, it can benefit not only Pakistan but also Afghanistan and other central Asian countries.

<B>BRR: You are no stranger to Pakistan and this region. Do you think that an East-West corridor is critical for the success of this North-South corridor within Pakistan?</B>

<B>JC:</B> I would say yes. India is planning to link up with Central Asia, and experts think that the link will be through Chabahar. But if you look at the map, that route looks absurd. We have what 350-400 kilometers between Wagah and Torkham. Definitely, an East-West corridor is critical.

<B>BRR: What could be areas of cooperation among Pakistan, Afghanistan and India to start talking about an East-West corridor?</B>

<B>JC:</B> I was in Brussels three weeks ago for a conference on Afghanistan, where the international community renewed its commitment to Afghanistan. More interesting for me was that Pakistan announced during the conference an additional $500 million for the development of Afghanistan - it was a strong, positive message to Afghanistan. My point is that Afghanistan wants to remain the crossroad that it has always been for the region for centuries. It means that Pakistan has to find a way to work with Afghanistan on issues of trade. Pakistan has interests to reach CARs, and the best way to do it is to go through Afghanistan. Afghanistan has interests in goods transiting to and from their country. There is no other option for Afghanistan and Pakistan but to work together on trade and economic development.