Awaz Apni Report: (Maryum Razzaq)
Pakistan could win trade concessions from the EU to help it's economy recover from devastating floods that have displaced millions of people and devastated the cotton crop.
Momentum for a package of reduced tariffs to help the Pakistani economy is building in Brussels after senior officials in Islamabad asked western nations for preferential access for its textile exports.
"This is really the time for market access that will provide employment from Pakistan's textile sector and put people back to work" Waqar Masood Khan, secretary of the federal ministry of textile industry told the FT. "Given how our economic situation is right now, more market access is highly desirable".
The EU's effort is being spearheaded by Lady Ashton, the EU's high representative, who is expected to raise the matter at a meeting of European foreign ministers next week.
Lady Ashton is keen to demonstrate the effectiveness of the EU's new External Action Service diplomatic corps after she faced accusations of a feeble response to January's earthquake relief effort in Haiti.
The trade debate in Brussels reveals a tension between the EU's ambition to play a bigger role on the world stage – as embodied by the new EAS – and protection of domestic industries weakened by the global financial crisis.
Some EU states, particularly those with significant textile industries, have resisted Pakistan's requests in the past.
Some diplomats say the scale of the disaster and Pakistan's strategic importance could now alter the debate. "This is the time for the EU to raise its game," said one diplomat.
The UK and Germany are backing a plan to ease standards for the EU's GSP+ programme, which eliminates tariffs for poor countries that implement international conventions on human rights reforms, labour standards sustainable development and good governance.
Pakistan fails to qualify because its industrial base is slightly too large, and it has yet to fully implement UN conventions on human rights.
A UK-led effort to change the rules was resisted earlier this year by several member states, including Portugal, Italy and Poland, who feared their textile industries could be harmed by increased imports.
And some EU trade officials say the humanitarian response should remain primary and are uncomfortable about using trade policy.
Pakistan had sought a GSP+ status from the EU before the floods. Mr Khan said: "The destruction from the floods and our overall economic situation makes immediate connections hugely necessary".
Another possibility under consideration would be for the EU to waive tariffs on an list of Pakistani imports. Such a move, however, could be blocked at the World Trade Organisation by competitors, such as India and Bangladesh.
The most realistic option, according to some diplomats, would be for the EU to identify a list of products beneficial to Pakistan and then unilaterally reduce the so-called "most-favoured nation" tariffs it charges trading partners. Depending on the products and the tariff reductions, such a move could result in €100m to €150m in additional annual exports for Pakistan, according to preliminary calculations.
One challenge in devising a list, say people familiar with the matter, would be to help Pakistani exporters without providing unintended benefits to their Chinese rivals.
"Only incentives from importing countries will help lift our textile exports and also give profits to textile manufacturers which will be enough for them to expand their labour force, said a leading cotton trader in Karachi. "There are plenty of unemployed people in Pakistan but they need to be put to work".
"There is an urgent need to consider ways of putting people back to work, to avoid an absolute chaos," said Hafeez Pasha, former commerce minister and head of the Lahore based institute of public policy.
