Documents considered by the Committee on 3 November 2010, including the following recommendations for debate: Financial Management - European Scrutiny Committee Contents

9 Emergency trade preferences for Pakistan



COM(10) 552

Draft Regulation introducing emergency autonomous trade preferences for Pakistan

Legal baseArticle 207(2) TFEU; co-decision; QMV
Document originated7 October 2010
Deposited in Parliament18 October 2010
DepartmentBusiness, Innovation and Skills
Basis of considerationEM of 28 October 2010
Previous Committee ReportNone
To be discussed in CouncilNo date set
Committee's assessmentPolitically important
Committee's decisionCleared


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.


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.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2010
Prepared 12 November 2010