India, Bugladesh and Peru Oppose EU Aid For Pakistan

India, Bangladesh and Peru have opposed the European Union’s proposal to give duty free access to Pakistani textiles as a flood relief measure. The countries have informed the World Trade Organisation (WTO) that trade concession was not the right option as it harmed interests of the competitors, a government official said.
A decision on EU’s proposal to allow duty free import of 75 items including 64 textiles items from Pakistan was deferred at a recent meeting of the WTO Committee on Trade in Goods after the three countries raised objections. It will be taken up in the next meeting scheduled for late January, according to Economic Times.
“India fully supports EU’s intention of helping Pakistan in its time of need, but assistance should be given directly in cash or kind and not by bending trade rules,” a commerce department official told ET. EU can give concessions to Pakistan only if the WTO gives it a waiver from its obligation of treating all member countries the same way, under a provision known as the Most Favoured Nation clause. “The EU is appearing to be helping Pakistan, but in reality the bill is being transferred to competing countries that would lose market share,” said DK Nair, secretary general of industry body Confederation of Indian Textiles Industries.
According to EU’s plans, it would allow duty free import of 75 items for three years starting January 2011, amounting to almost euro 900 million in import value. Although India’s garment and textile exports to the EU in 2009 at $5.9 billion was more than double Pakistan’s $2.2 billion, it could lose a market share to its neighbour if duty free access is allowed as import duties range between 6 per cent and 12 per cent.
Bangladesh has said that it should be compensated the trade loss if the EU is allowed to implement its proposal, the official said. It is not just competing countries that are opposed to the proposal. A number of textile producing countries within the EU such as Portugal, Spain and Italy have also expressed unhappiness. “Euro textiles, which is the apex textiles industry body in Europe, has said that it does not favor the move,” the official said. With opposition from within and outside to the zero-duty proposal, the EU may be forced to look at other options to help out Pakistan.