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EU leaders eye S-Korea, Pakistan trade deals

farmer PakistanBRUSSELS: European leaders scrambled Thursday to break an impasse on giving Pakistan trade-linked aid and to convince Italian Prime Minister Silvio Berlusconi to unblock a trade pact with South Korea.

Britain and Germany were pushing the 27-nation European Union at a summit in Brussels to offer Pakistan trade advantages to help the country battle flood devastation and fears of rising Islamist extremism.

In a letter to EU partners, British Prime Minister David Cameron called for a “concrete political commitment from the EU to Pakistan to enhance significantly its access to the EU market.”

The deal, however, faces a welter of obstacles, including concerns that it would be challenged at the World Trade Organization and fears in the European textile industry.

EU chief diplomat Catherine Ashton called for a “comprehensive approach on how we can support Pakistan.”

The floods in Pakistan have affected some 21 million people and left 1,760 dead. The country is also battling extremists at its western border with Afghanistan.

EU leaders will decide whether to offer Pakistan “ambitious trade measures essential for economic recovery and growth,” according to newly-adapted conclusions obtained by AFP.

The heads of government and state of the EU, which represent the world’s biggest border-free trading bloc and home to half a billion consumers, will be asked to agree “in principle” to grant “significantly increased market access… through the immediate reduction of duties on key imports.”

Nevertheless, illustrating the depth of feeling among opponents, a watered-down version calls only on the European Commission, the EU’s day-to-day executive, to “come forward with proposals including increased market access.”

“It’s very important that we provide aid and help to Pakistan by all means possible,” said Finnish Foreign Minister Alexander Stubb. “To me it means humanitarian aid, development aid and trade.”

“It’s a question about the stability of the region and all instruments should be used,” he said.

Stubb also said he was “convinced” that a deal would be reached on South Korea and that the free trade pact would be “up and running within a few months.”

The South Korea trade deal was forced onto the summit agenda after Italy used its veto power to stall the agreement over concerns that it would damage its auto industry, dominated by car giant Fiat.

“I think the free-trade agreement with South Korea could be announced some time today,” said Belgian Prime Minister Yves Leterme, whose country holds the EU’s rotating presidency.

Italian premier Silvio Berlusconi is struggling on the domestic political front and Rome has warned that it could veto the deal, which requires ratification by all 27 EU member states and the European parliament.

Diplomats have suggested that Berlusconi wanted to bring home a victory by securing compromises in Brussels.

Rome fears its auto sector – particularly Fiat’s range of small cars threatened by the lowering of tariffs on rival Hyundai models – would suffer badly under the planned accord with Seoul.

Italy wanted to delay the deal’s implementation until the middle of next year, instead of January. – AFP

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