Europe hesitates to give Pakistan special trade favours

British PM calls for trade-linked aid to help Pak battle flood devastation.

Last Updated: Sep 16, 2010, 10:27 AM IST

Brussels: EU governments on Wednesday hesitated to back a clarion call by British Prime Minister David Cameron for trade-linked aid to help Pakistan battle flood devastation and fears of rising Islamist extremism.

National leaders will decide at a European Union summit in Brussels on Thursday whether to offer "ambitious trade measures essential for economic recovery and growth," according to newly-adapted conclusions obtained by a news agency.

The floods have turned some 21 million lives upside down and left 1,760 dead.

In a letter to European Union partners, Cameron calls for a "concrete political commitment from the EU to Pakistan to enhance significantly its access to the EU market."

However, a welter of obstacles -- not least the likelihood of a challenge at the World Trade Organisation -- means the bloc was playing it coy amid internal disagreement.

Heads of government and state from the 27 EU members, which represent the world`s biggest border-free trading bloc and home to half a billion consumers, will above all 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”.

Cameron`s push for special status at the WTO looks strewn with obstacles, as he admitted in the letter, but he will pursue what opponents call a liberal free-trade agenda with a drive for "an ambitious new partnership between the EU and Pakistan on serious economic reform and trade."

German Foreign Minister Guido Westerwelle said last week that the move was designed to prevent Pakistan from degenerating into "extremism and fundamentalism”.

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

But the idea of preferential treatment caused consternation within the industry.

The European association of textile producers (Euratex) argued that Islamabad was "using all sorts of excuses to demand free access to the EU market”.

It added that 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.

PTI