India Sees Red as EU Allows Duty-Free Access to Pak Textiles.

NEW DELHI: India will oppose preferential access given to Pakistan’s textile industry by the European Union as a relief measure against the devastating floods, a move that could render India’s exports to the region uncompetitive.

The three-year favourable access to the 27-country strong market will begin from January next year, giving duty-free access to a number of textile products from Pakistan.

“This measure clearly violates the principle of General Most Favoured Nation Treatment (of the WTO),” DK Nair, secretary general of the Confederation of Indian Textile Industry , wrote to the textiles ministry. “The ministry has not given any assurance, but said it will oppose the proposal ,” Mr Nair said.

Some officials, however, feel that India may not have a strong case. “The WTO actually has nothing substantial against preferential tariffs. Moreover, the EU has expressed its intention to ask for relevant waivers,” an official said.

“The WTO cannot interfere till a country imposes a measure, say a quota on imports , which allow imports from only some countries while preventing others,” said Ajay Sahai , secretary of exporters’ body Fieo.

The only way in which India could challenge the move is to expedite conclusion of its freetrade agreement with the European Union so that it too gets preferential access, he added.

The EU had, in October, introduced emergency autonomous trade preferences for Pakistan to help it recover from the devastating floods earlier this year. It decided to allow duty-free import 75 products from the country, 64 of them textiles, amounting to almost €900 million in import value.

The move would put India’s textile exports to the EU at a serious disadvantage as its products would continue to face 6- 12% import duty. India exported textiles and clothing worth $5.9 billion to the EU in 2009 while Pakistan’s exports totalled $2.2 billion.

Source : economictimes.indiatimes.com