The European Union will consider giving Pakistan trade concessions under its GSP (generalized system of preferences) Plus trade scheme, officials from the European Commission and Council revealed on Thursday.
The EU and Pakistan will hold a high-level summit in Brussels tomorrow, their second in less than a year. Prime Minister Syed Yousuf Raza Gilani will represent Pakistan, while the EU will be led by European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso.
Although Pakistan is not a “strategic partner” of the EU (unlike India) and nor is EU-Pakistan trade (at ¤7 billion) of much significance, Brussels is seeking to raise its engagement with Islamabad. According to Shada Islam, a senior executive with the European Policy Centre (EPC), a Brussels-based think tank, security concerns, in particular counter-terrorism, are driving this new momentum towards engagement.
Gilles de Kerchove, the EU Counter-Terrorism Coordinator, noted recently that the security threat posed by Pakistan to Europe “is obvious.” “We had many cases in the recent past where either Pakistanis were coming to Europe or young EU citizens were going to Pakistan for training and being brainwashed in madrassas,” he said.
The summit will see the announcement of a new five-year engagement plan between the EU and Pakistan, which will set up a dialogue structure on counter-terrorism and non-proliferation amongst other issues.
EPC’s Islam is however, dismissive of these plans. “The fact is there will be no deliverables at this summit,” he says. “The idea of the five-year engagement is just talk. Words with no substance.”
Pakistan’s main aim for the summit is increased duty-free access to European markets. Worried that other Asian countries, including India, are engaged in free trade agreement negotiations with Brussels, Islamabad is pushing for trade concessions in Europe. It is also Pakistan’s contention that as a western ally and “frontline state” against terrorism, its economy has suffered disproportionately in recent years and therefore deserves special compensations.
Currently, 80 per cent of Pakistani exports to Europe (over two-thirds of which comprise textiles) enjoy zero or reduced tariffs.
A European Commission official said the EU would look into whether or not Pakistan could benefit from GSP Plus arrangements going forward. The GSP Plus is intended as a special incentive arrangement to promote sustainable development and good governance, by offering additional tariff reductions to support vulnerable developing countries in their ratification and implementation of international conventions in the fields of human rights, core labour standards and good governance.
The official also did not rule out the possibility of an FTA negotiation with Islamabad, although he stressed this would be a long-term process with no starting date in mind as yet.
During the summit, Pakistan’s relationship with its neighbours, including India and Afghanistan will be another item on the agenda. Dubbing South Asia “one of the least integrated regions in the world,” the officials said the EU could serve as an example for what South Asian countries stood to gain from better economic integration.
On Kashmir, they reiterated the European position that while happy to play a mediatory role if asked to by both sides, Europe remained “sensitive to the sensitivities” involved.
EU development and cooperation aid to Pakistan will also be increased, from the current ¤50 million per year to ¤75 million per year between 2011 and 2013.
