Italian Foreign Minister Franco Frattini warned on Friday that Italy's support for special trade favours to Pakistan is conditional on "regional" rivals being denied similar concessions. Italy is the country in the European Union holding up a British proposal to open up access to the world's biggest trading bloc for Pakistani textile exports, but there are fears in Rome that up to 40,000 jobs could be lost among the EU's main textile producers.
The European Commission has since offered to lift nearly all tariffs on 75 separate product lines, but the deal requires the approval of such a waiver in the World Trade Organisation, and Italy is concerned about Indian demands for equal treatment. Frattini said that "under certain circumstances," Italy could allow a deal to pass EU hurdles.
"My country believes that it can be done," he said. "Of course it depends on the list of products and on the guarantee that any kind of offer will not be extended to any other country in the region except Pakistan. "Under certain limitations we can go ahead," he underlined.
"I'll be visiting Pakistan very soon," Frattini added on the sidelines of a meeting of world nations aimed at helping Pakistan deal with flood devastation and nudging it forward on democratic reform. Prime Minister Silvio Berlusconi threatened to take the last summit of EU leaders hostage on the issue, and another summit at the end of this month could see difficult.
The unilateral suspension of EU duties, available for the next three years, is intended to be applied as of January 1 next year, subject to approval by EU states, the European parliament and, crucially, the WTO. An EU official admitted on Friday that "getting this through the WTO is already going to be a challenge." Italian textile manufacturers have suggested that tens of thousands of European jobs could be at risk in Europe.