Islamabad has been pushing for a policy of Trade First, not Aid first. Pakistan has been asking the EU and the US for tariff free trade for a decade. The EU initially allowed free access to the EU for a couple of years, but after the initial period expired, the EU did not put a new proposal through to allow Pakistan further access. Now the EU has once again made a decision to allow Pakistani goods into the European Union.
The American president when he was in Islamabad announced the establishment of Reconstruction Opportunity Zones. These zones which would help Pakistan export more goods to Pakistan have yet to be established and the ROZ resolutions languish in the US Congress. ROZs face an uphill battle in the US Congress strongly opposed by the Southern states which grow Cotton.
ISLAMABAD (APP) – The European Commission is moving to give Pakistan tariff-free access to European Union for its exports, part of an EU effort to bolster the economy of the strategically important country.
The commission’s proposal, which is still being discussed internally, is part of the EU’s military and diplomatic project for Afghanistan, a private news channel reported.
EU governments, led by the UK, view economic growth and stability in Pakistan, where a number of the militant groups fighting coalition forces in Afghanistan are based as crucial to fighting terrorism and drug smuggling in Afghanistan.
The proposal would change an EU program that gives tariff- free access to EU markets for poorer countries.
Pakistan currently doesn’t qualify for the program, known as the Generalized System of Preferences , because its exports represent too high a proportion of total EU imports.
The commission plan would allow countries that account for up to 1.5pc of total EU imports to qualify for GSP, up from the current threshold of 1pc, EU diplomats say.
Pakistan’s exports, largely textiles, now account for about 1.4pc of imported EU goods that qualify for the GSP program, an EU diplomat said.
Pakistan would also have to agree to sign several international treaties, including one on human rights, to qualify for the program. The EU and Pakistan were supposed to hold a summit this week in Brussels, but the meeting has been postponed due to flight cancellations caused by the volcanic ash cloud. The changes would take effect in 2012 and will need to be approved by EU national govts at the European Council and the European Parliament.