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Trade-linked aid to Pakistan tops Europe talks

Trade-linked aid to Pakistan tops Europe talks

Brussels: European Union can provide business assistance to help Pakistan combat the devastation of flooding and the fear of extremism is growing at the EU summit next week, diplomatic sources said Saturday.

Hosting a two-day informal parley of foreign ministers from the 27-nation bloc, EU diplomatic supremo Catherine Ashton said Pakistan needed wide support —ranging through aid, institution-building, anti-terror assistance, reconstruction and trade.

“Everyone agrees we have to think comprehensively,” Ashton said.

“If we want to stabilise Pakistan, so that it doesn’t degenerate into extremism and fundamentalism, we have to address the economic consequences of this natural catastrophe,” said German Foreign Minister Guido Westerwelle.

After the floods turned some 21 million lives upside down and left 1,760 dead, Ashton suggested special exemptions from trade tariffs.

“It is in the vital strategic interest of the European Union to help Pakistan in the longterm with trade,” said British Foreign Secretary William Hague as the talks wound down.

“I hope there will be agreement on it” at the September 16 summit, he added.

“There has been really strong support from the foreign ministers for some decisive action to be taken.”

EU leaders will have three options to ease Pakistani goods into Europe —offering duty-free access on some goods, deciding a unilateral waiver with WTO agreement, or lowering Most Favoured Nation tariff on some products.

Most EU nations favoured a waiver for a limited list of products, diplomatic sources said.

The European Commission, which polices EU trade matters, asked ministers to consider ditching tariff barriers on 13 types of textile product, in an effort to kick-start an economic fightback.

“We cannot stand on the sidelines,” said Belgian Foreign Minister Steven Vanackere, after the issue of “how we’ll do it” was passed up from trade to foreign ministers.

The idea of preferential treatment caused consternation within the industry. A European association of textile producers (Euratex) articulated fierce resistance.

Euratex told EU trade commissioner Karel De Gucht last week that the “Pakistani government is (repeatedly) using all sorts of excuses to demand free access to the EU market,” citing the “fight against terrorism, economic crisis and now the floods”.

It said Pakistan is “already a major world player” on a par with India or China, and warned that unilateral EU moves “will certainly be attacked” in the WTO and could “seriously jeopardise” negotiations on a free-trade deal with New Delhi.

According to an EU source, though, the list of product areas qualifying for exemptions was drawn up with likely objections in mind, and aimed at providing some 25 million euros of annual benefits to Pakistan.

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