INTERNATIONAL
Market access and the
rehabilitation of flood victims
Dr Manzoor Ahmad
T
here is a growing
realisation in the West
and particularly in
Europe that its response to
devastating floods in Pakistan
has not been adequate. Many
observers are making
comparisons with the EU's
response to the tsunami where
the European Union and its
member states immediately
pledged more than A2 billion
as compared to a vastly lower
funds made available in
response to the current flood
disaster. According to the UN
Office for the Coordination of
Humanitarian Affairs (OCHA)
"this disaster is worse than the
tsunami, the 2005 Pakistan
earthquake and the Haiti
earthquake," as the 20 million
affected outstripped the more
than 3 million hit by the 2005
earthquake, 5 million in the
tsunami and the 3 million
affected by the Haiti
earthquake, all combined. The
UN Secretary General has
called the flood disaster a slow
tsunami.
After the tsunami, the EU
not only provided huge
funding, but also moved
quickly to give additional
market access to the affected
countries. This was done
through various trade
measures including
accelerating the entry to the
EU Generalized System of
Preferences (GSP) scheme for
tsunami-affected countries,
simplifying the preferential
rules of origin,
review/suspension of cases of
companies subject to EU trade
defence measures, increasing
trade-related assistance to
help businesses in the affected
countries boost their exports.
In order for Pakistan to
recover from its worst ever
disaster it will need to move
on many fronts. It needs to
boost exports so that some of
the economic losses caused by Appellate Body and that
the floods are offset, resulted in the exclusion of
additional employment is Pakistan. On the contrary, the
created and resources found WTO Appellate Body had ruled
for the rehabilitation of flood that the EU could provide such
victims. This will need both concessions provided it has an
immediate action and a objective criterion. While
medium to long-term plan. developing criteria, EU made
Immediately, Pakistan sure that Pakistan was
needs to refocus on the excluded and the scheme
following two issues: remained intact. In fact, if
First, get the EU's GSP plus Pakistan was to pluck up the
facility for duty-free imports of courage and challenge this
goods from Pakistan; and unfairness in the WTO, there is
secondly, get the US to pass little doubt that it would win its
through the Congress the case.
pending bill on duty-free Besides the GSP plus
treatment of goods from scheme, EU currently provides
Reconstruction Opportunity duty free access to a large
Zones (ROZ). A case should be number of countries as part of
made to amend the proposed many other schemes that are
bill to include the flood- in force. For example, its
affected areas. Everything But
Pakistan fully meets the Arms (EBA) scheme allows
EU's criteria for the GSP plus duty-free imports from 50
scheme, but unfortunately we Least Developed Countries
have failed to pursue the case (including Bangladesh) and its
properly. The scheme is Economic Partnership
intended for those countries Agreements allows duty-free
whose economies are poorly access to a large number of
diversified and thus are ACP countries. In addition, it
dependent and vulnerable. In has many other agreements to
addition, the EU's intention is allow duty-free imports from a
to promote implementation of number of developing
certain core labour and human countries. Pakistan is allowed
rights conventions. GSP scheme but its coverage
Pakistan's economy is less and its impact is very limited.
diversified and more As a result Pakistani exporters
vulnerable than several of the pay on average more than 3
14 countries considered times the duties than most
eligible for the scheme. other countries pay.
Pakistan has also ratified and In addition, EU always
implemented the core targets any emerging imports
international conventions on from Pakistan through trade
labour and human rights. At defence measures. When
the time that Pakistan was Pakistan's ethanol exports
excluded from this scheme in were making good headway,
2005, the EU had informally EU started antidumping
indicated that when civilian investigations and managed to
rule is restored, the country kill many units that were in the
would again be made eligible process of setting up
for this scheme. It was distillation units for conversion
apparent that Pakistan's of molasses to value added
exclusion was on political ethanol. Currently it is
grounds and not on merit. An targeting pet resin, one of the
impression was also created very few chemicals that
that the GSP plus scheme had Pakistan has been able to
been ruled illegal by the WTO export to the EU.
For a while, it also
established a new benchmark
for bas- mati rice, so as to
label Pakistani basmati rice as
non-basmati and thus liable to
higher tariff. Of course, our
fisheries are often banned for
entry into the EU on sanitary
measures.
As for the Americans, it is
unfortunate that they do not
realise the price Pakistan is
paying because of its
partnership with them in the
"war on terror". When Pakistan
formally joined the alliance in
2002, its exports to the US
were 23.5% of its total
exports.
This share has been falling
ever since and now it is less
than 18% a fall of about 25%.
During these years, US
allowed duty free imports from
a large number of well-off
countries either as a part of
some scheme or because it
signed bilateral free trade
agreements with them. It kept
promising Pakistan a fig leaf in
the form of allowing duty free
imports for some goods from
the "Reconstruction
Opportunity Zones" for the
next 15 years. These zones
were to cover Khyber
Pakhtunkhwa; Federally
Administered Tribal Areas
(FATA); Balochistan; areas
within 100 miles of Pakistan's
border with Afghanistan; and
earthquake-affected areas. US
carefully selected those areas
where there is hardly any
industrial activity. Even from
these areas important textiles
and clothing goods were
excluded. So far, not much
progress has been made on
the process for the last 6
years.
The legislation is currently
pending in the US Senate and
it is-time for Pakistan to put
pressure for the passage of
the bill. This will not be enough
in the long-term but at least it
can be a beginning.
 One of the reasons for services of Pakistani status. At the time the also important that the policy
Pakistan's failure to get expatriates who enjoy some Pakistan government was not makers do not impose any
preferential market access to influence with the legislative able to follow it up with the EU new flood surcharge on
these two major markets has bodies of the countries Commission who managed to imports as it would further
been the disjointed and half- concerned. For example, an overrule the EU Parliament's hurt domestic economic
hearted approach. There was EU member of parliament of resolution. activity and further hamper
very little coordination Pakistani origin managed to The flood disaster calls for our exports.
between the two concerned get a unanimous resolution quick and coordinated efforts. The writer is former
ministries, Commerce and passed by the European Sympathy wears out quickly, Ambassador of Pakistan to the
Foreign Affairs. Also, we failed Parliament that would have and it is important that WTO.
to adequately mobilise the qualified Pakistan for GSP plus immediate action is taken. It is manzoor_ahmad@yahoo.com