EU to import more duty-free goods from Pakistan, to aid recovery from floods

Pakistan will be allowed temporarily to export more goods duty free to the EU, so as to help the economic recovery of its flood-devastated regions, under a regulation approved by Parliament on Thursday. This exceptional measure, to apply until the end of 2013, will include fabrics, garments, linen, ethanol and leather.

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2012-09-16

The measure, intended to help the regions of Pakistan worst hit by the 2010 floods, will give preferential (duty-free) EU market access to 75 types of goods, although tonnages of some of the more commercially sensitive ones will be capped..

The vote was 342 in favour, and 97 against, with 165 abstentions. A significant minority of MEPs abstained on the grounds that EU trade policy should not be used as a humanitarian aid tool.

Safeguards for the EU textiles market

Parliament inserted safeguard clauses to protect EU industry and jobs in the textiles, garments, ethanol and leather sectors, which are sensitive for some member states, against surges in cheap imports. These clauses stipulate that the Commission may reintroduce duties if EU imports of the products concerned grow by 25% or more.

Parliament also inserted amendments to enable the EU to withdraw the trade preferences should Pakistan impose restrictions on exports of raw materials used to produce goods covered by the regulation (such as animal hide).

MEPs also inserted a statement that the measure is strictly a response to the specific situation in Pakistan and "should not constitute a precedent for the Union's trade policy".

Protecting human rights

MEPs also tied the trade concession to Pakistan's human rights performance, by inserting a requirement that preferences be immediately suspended "if Pakistan adopts measures restricting human rights and workers' rights, gender equality or religious rights or if it provides terrorist organisations of any kind with backing or support".

WTO waiver

EU trade preferences for the 75 goods will apply from the date when the measure is published in the EU Official Journal until 31 December 2013. This "trade aid" was first proposed two years ago when the flooding caused massive losses in Pakistan.

However, to grant autonomous trade preferences for a single country, the EU had to obtain a special waiver from the World Trade Organization. This waiver was blocked by WTO members, such as India and Bangladesh which were worried about its possible impact on their own markets and finally granted at the start of 2012.

Source: European Parliament

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