In his meeting on Tuesday with Jack Straw, Britain's Law and Justice Secretary, who is more familiar with the problems facing Pakistan from his previous stint as foreign secretary, Prime Minister Yousuf Raza Gilani sought London's help for his government's efforts to acquire greater access to the EU market, especially its quest for a free trade agreement (FTA).
Our request for FTA, in fact, has been pending with the EU for a while. The officials concerned seem to be in no hurry, as they should have been in view of Pakistan's peculiar situation, to give it due attention. Meanwhile, Pakistan being a frontline state in the West's war against terrorism, the country's economy has suffered immensely on account of a violent blow-back from Afghanistan.
Investments, both local and foreign, have gone down to a significant extent. An unprecedented increase in the international price of oil has made a bad situation worse, severely impacting our balance of payments. As Pakistan has been telling the Western nations since long what it needs is trade rather than aid to strengthen its economy on a long-term basis.
But EU trade policies seem to favour Pakistan's trading competitors. The Generalised System of Preferences (GSP) extended to it for a while has been withdrawn; and our exports face both tariff and non-tariff barriers. Representatives of our badly hit textile sector have reason to complain that whereas our bed linen exports are subjected to a 5.8 percent anti-dumping duty and 9.6 percent customs duty on all textile exports, our competitors from India and China get preferential treatment as well as free market access.
Then our exporters have to deal with non-tariff barriers such as security situation related travel advisories for importers and travel restrictions for exporters together with certain other conditions. Other regional competitors comprising Bangladesh, Nepal, Sri Lanka, Bhutan and the Maldives are entitled to duty-free access to EU as Least Developed Countries (LDCs).
Pakistan is fortunate enough not be included in the LDC category. Yet it needs some sort of encouragement. After the withdrawal of GSP, it expected to be given GSP Plus status that would have placed it in a better position to deal with its regional rivals, but that move was blocked in the WTO on a member's appeal.
It is obvious enough from these details that Pakistan faces serious difficulties in the EU market, which happens to be its largest trading block. Considering that certain security interests of its Western friends too are tied to its political and economic stability, EU needs to facilitate this country's trade, and bring down the barriers in its way.
Pakistan has already fulfilled almost all of the 27 ratification and promulgation conventions necessary for it to qualify for FTA. It is about time its friends like Britain used their clout within the EU to help Pakistan secure the much-needed FTA.