India to Withdraw Objection Over Pak-EU Trade Deal.

Lahore - According to reliable sources in the Ministry of Commerce, India has decided to withdraw its objections to the unilateral trade concession offered by the EU, after the visit of Hina Rabbani Khar to India where issues of mutual interest and cooperation were discussed. Despite drawing criticism from various quarters, Hina was highly successful in achieving the desired results from the visit. Sources also claimed that an official announcement would likely be made very soon. It is pertinent to mention that this move by India is a major step to improving relations between the two neighbouring states.

Mirza Ikhtiar Baig, a leading textile exporter also claimed in a statement that India is expected to formally announce its decision to remove objections on the Pak-EU trade deal in the forth coming meeting of Commerce Ministers to be held in Delhi on September 28 to 29, 2011. Talking to Profit, Baig said this would be a big development after the commerce secretary level talks that were initiated between the two countries. Secretary Commerce Zafar Mehmood, Foreign Minister Hina Rabbani Khar and Minister for Textile Makhdoom Shahabuddin he said had also played their role to convince the neighbouring country for approving the draft application at WTO forwarded by the EU. This step, he said, would pave the way for duty free export of 65 textile products to EU and boost Pakistani exports worth $300 Million per annum to EU. He further said that the commerce minister’s visit to Delhi would also be accompanied by leading businessmen of the country this month. It is pertinent to note that the European Council in its meeting on September 16, 2010, had decided to grant Pakistan special concessions to support its ailing economy in the wake of devastation caused by unprecedented floods. The total export value of these tariff lines is $1.03 billion and the average tariff on these products is around 8.86 per cent. Pakistan’s global export of these products is about $3.80 billion.

“It is appropriate that India is so forthcoming though we still have some technical difficulties which will have to be addressed. These technical difficulties pertain to a couple of countries who have also earlier made comments at the WTO which works with consensus,” foreign office spokesperson told media personnel in her weekly briefing to the media. The ministry of commerce sources further revealed that India has assured Pakistan that it would not raise any further objections at the World Trade Organisation’s (WTO) Council for Trade in Goods on the time-bound European Union (E.U.) waiver on trade preferences that was offered to Pakistan to facilitate in the recovery from last year’s devastating floods. Sources further said, that despite the assurance of India to not raise objections over the said deal, a number of other countries including Bangladesh have also raised concerns over the preferential trade package. However he said, that these differences are expected to be chalked out by the Pakistani authorities before the next meeting of the Council for Trade in Goods. It is also pertinent to mention that Pakistan’s ambassador to Belgium, Luxembourg and the European Union, Jalil Abbas Jillani has also played a pivotal role in engaging the European Countries for improving bilateral trade. Therefore it can be said that the decision by India to withdraw its objections to the trade deal points out to the collective efforts of the government, foreign office and ministry of commerce to thrash out opposition to the trade deal.

Earlier, India had expressed its reservations over the facility, saying that temporary tariff concessions would not attract foreign direct investment (FDI) or provide employment to those affected by the flood. It had also claimed that the tariff concessions would not benefit those in genuine need, while those who stand to gain will be existing producers and their employees as they may gain in terms of fresh orders and insisted that the flood affected areas were far from the industrial centers. Virtually all members of the WTO except India had indicated support for the waiver whereas India opposed it on grounds that granting of this waiver would set a wrong precedent for the WTO system for the future. Clarifying this previously, Ambassador Jillani had said that the WTO system and law has the provision for a waiver precisely because it was visualised that there would be times when individual member countries would need to be given waivers to cope with extraordinary circumstances and secondly the entire WTO membership did not perceive the so called threat to the WTO system that India had been talking about.

Source : pakistantoday.com.pk