European parliament on Thursday approved a regulation to import more duty-free goods from Pakistan, to aid recovery from floods. Sources said the EU Autonomous Trade Preferences (ATPs) for 75 goods will apply from the date when the measure is published in the EU official journal until 31 December 2013. This "trade aid" was first proposed two years ago when the flooding caused massive losses in Pakistan.
However, to grant autonomous trade preferences for a single country, the EU had to obtain a special waiver from the World Trade Organisation (WTO). This waiver was blocked by WTO members, such as India and Bangladesh which were worried about its possible impact on their own markets and finally granted it at the start of 2012.
Sources said in this regard an official announcement has also been issued by EU on Thursday night. According to the announcement, Pakistan will be allowed temporarily to export more goods duty-free to the EU, so as to help the economic recovery of its flood-devastated regions, under a regulation approved by the parliament on Thursday. This exceptional measure, to apply until the end of 2013, will include fabrics, garments, linen, ethanol, leather and several other goods.
The measure, intended to help the regions of Pakistan worst hit by the 2010 floods, will give preferential (duty-free) EU market access to 75 types of goods, although tonnages of some of the more commercially sensitive ones will be capped, it added. The vote was 342 in favour, and 97 against, with 165 abstentions. A significant minority of Members of European Parliament (MEPs) abstained on the grounds that the EU trade policy should not be used as a humanitarian aid tool.
Sources said that European Parliament has also inserted safeguard clauses to protect EU industry and jobs in the textiles, garments, ethanol and leather sectors, which are sensitive for some member states, against surges in cheap imports. These clauses stipulate that the Commission may reintroduce duties if EU imports the products concerned grow by 25 percent or more, the announcement said.
The parliament also inserted amendments to enable the EU to withdraw the trade preferences should Pakistan impose restrictions on exports of raw materials used to produce goods covered by the regulation (such as animal hide). MEPs also inserted a statement that the measure is strictly a response to the specific situation in Pakistan and "should not constitute a precedent for the Union's trade policy."
Some clauses have also been added to protect human rights and MEPs also tied the trade concessions to Pakistan's human rights performance, by inserting a requirement that preferences be immediately suspended "if Pakistan adopts measures restricting human rights and workers' rights, gender equality or religious rights or if it provides terrorist organisations of any kind with backing or support."