9 Emergency trade preferences for Pakistan
| (32075)
14969/10
COM(10) 552
| Draft Regulation introducing emergency autonomous trade preferences for Pakistan
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| Legal base | Article 207(2) TFEU; co-decision; QMV
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| Document originated | 7 October 2010
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| Deposited in Parliament | 18 October 2010
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| Department | Business, Innovation and Skills
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| Basis of consideration | EM of 28 October 2010
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| Previous Committee Report | None
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
9.1 At its meeting of 16 September 2010, the European Council
mandated Ministers to agree urgently a comprehensive package of
short, medium and longer term measures to help underpin Pakistan's
recovery and future development in the light of the devastating
floods which had occurred there. In particular, it specified that
these should include ambitious trade measures granting, exclusively
to Pakistan, increased market access to the EU through the immediate
and time limited reduction of duties on key imports from Pakistan.
The current proposal
9.2 In putting forward this draft Regulation, which would apply
until the end of 2013, the Commission says that any such concession
needs to represent a credible effort by the EU, and to bring about
meaningful economic benefits to Pakistan, whilst taking into account
the sensitivities of EU industries, as well as other members of
the World Trade Organisation (WTO), particularly the least developed
countries. It notes that 60% of Pakistan's exports to the EU are
textiles and clothing, and says that consequently a large number
of the 75 dutiable products proposed for liberalisation are from
these two sectors, although it adds that other industrial and
agricultural products have also been included in order not to
undermine Pakistan's efforts to diversify its industries and exports
base. It says that the selected product lines amount to almost
€900 million in import value, accounting for 27% of EU imports
from Pakistan, and it estimates that the proposed liberalisation
would increase EU imports from Pakistan by around €100 million
a year compared with 2009.
9.3 The Commission goes on to note that the direct effect of the
measure on employment will be limited, given that the increase
in imports is equivalent to only about 0.5% of EU production,
and it suggests that there would be gains from lower prices on
imported items. At the same time, however, it notes that the EU
will have to request an exemption from its obligations under the
WTO, as these preferences would not be granted to other WTO Members.
The Government's view
9.4 In his Explanatory Memorandum of 28 October 2010, the Minister
of Employment Relations, Consumer and Postal affairs at the Department
for Business, Innovation and Skills (Mr Edward Davey) says that
the Government is strongly supportive of enhancing Pakistan's
market access to the EU to help its recovery from the floods,
and that Ministers and officials played a leading role in bringing
this action about. He adds that the UK believes that the proposal
represents a well-balanced package which will send a strong signal
of the EU's willingness to help Pakistan and provide international
leadership, as well as helping to provide immediate relief to
the people of Pakistan. He also suggests that the devastating
humanitarian situation in Pakistan fully justifies the granting
of a waiver from the normal WTO rules governing non-discrimination
in trade.
Conclusion
9.5 Although we are happy to clear this document, we think
it right to draw to the attention of the House these measures
which it is proposed the EU should take to help alleviate the
impact of the recent floods in Pakistan.
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