Union politics

Spate of European Union's restrictive measures against Pakistani businesses gives critics reason to doubt the motives

By Shahzada Irfan Ahmed

Trade relations between Pakistan and many of the countries, that are now part of the 27-member European Union (EU), have remained ideal for many decades. Apart from other factors, the Pakistani diaspora settled there has been instrumental in winning export business for their countrymen back home. The products exported from Pakistan had always found a ready market in this geographical bloc for their competitive prices and high quality.

However, the last couple of years have seen the trend reverse drastically. There is a common perception that after 9/11, Pakistani products are not being welcomed to EU countries and the US and their way blocked on various pretexts. There are many who smell rat in the repeated EU decisions to impose such bans. To them the imposition of anti-dumping duty on Pakistani bed-linen by EU, preference given to Indian rice over Pakistani Basmati, banning of all aircraft except seven in PIA's fleet from flying to EU countries and the decision to stop importing Pakistan's fishery products after April 12, 2007 hint at a well chalked-out strategy. This strategy, according to them, aims mainly at pressurising the country and forcing it to cooperate with the global powers at various fronts, mostly against the will of its inhabitants.

The other type who reject the thesis and term it nothing more than a 'conspiracy theory' are, however, unable to satisfy the questioners when asked as to why the other backward countries in the region are not facing the axe. It's an established fact that many of these countries are known for extremely unsatisfactory quality of production and services but their trade with the EU has seen a double digit growth over the same period.

In this backdrop, it seems pertinent to discuss the different decisions taken by the EU against Pakistani businesses and leave it to the readers to draw their inferences.

To start with, one can look at the circumstances in which Pakistani authorities received a notification from the European Union (EU) mentioning the impending ban on fishery exports from April 12, 27. Under the notification, all the 11 EU certified seafood processing units based in Karachi have been delisted. This was nothing less than a shock for the industry as the EU imports fishery products worth US$80 million from Pakistan. This makes EU the largest buyer of Pakistan's fishery products in the international market.

The decision has come in the wake of a visit made by the officials of EU's Food and Veterinary Office (FVO) to Karachi Fish Harbour in January 2007. While this decision of EU has sent shockwave down the spine of fishery exporters, our federal commerce minister Humayun Akhtar Khan is suspiciously calm. In a press conference, he hoped that the ban was temporary and would be lifted soon. He also made the ceremonial statement of forming a committee to review the standard of processing and packaging fishery products and ensure its compliance with EU's high quality standards. The minister needs to be checked here and asked as to what was the benefit of earlier committees formed to look into matters related to export of bed-linen and Super Basmati from Pakistan. Secondly, one can ask him as to what makes him say that the ban is temporary. Is there any demand on a part of EU or its global partners which if accepted could make Pakistan a favoured business partner again, and that too overnight?

Sardar Hanif Khan, Chairman Pakistan Seafood Industry Association says the ban would adversely affect Pakistan's fisheries exports and send a negative image among other international buyers of our products. He said the fisheries' exporters hold the federal government for neither being able to lobby with the EU authorities nor ensure the quality standards set by the EU.

The decision on fisheries export comes in quick succession to the one that barred most of the planes of PIA from flying to the EU because of safety concerns. The ban affects 35 aircraft of the airline's fleet of 42 aircraft, with just seven Boeing 777s exempted. The EU had said last year it that would ban flights unless the airline revamped its ageing fleet.

PIA has strongly opposed the ban and does not consider it justified. The airline is considering leasing passenger planes and crew to continue with its operations on this highly profitable route. The ban has badly affected airline's flights to London, Paris, Rome and Amsterdam and other European destinations.

Though hardly any Pakistani who has had the 'privilege' of flying with the national flagcarrier will disagree with EU, there is an official excuse (though off the record) as well. PIA bigwigs say the EU wants to penalise PIA for buying aircraft for its fleet in the past from non-European companies and pressurise it to contract deals with Europeans in the future.

Another front on which Pakistan is fighting its battle is the registration of Super Basmati rice patent. Pakistan alleges India of securing fake registration of this quality of rice which it (Pakistan) claims is produced only in its Punjab province. The EU authorities are not weighing arguments coming from the Pakistani side and there have been talks for joint registration of the patent. But Pakistani growers of Super Basmati want exclusive rights and are raising voice at every available forum.

Last but not the least comes the textile sector. No doubt, Pakistani textile exporters have paid heavily due to the 'discriminatory' treatment at the hands of world powers. The exporters of bed-linen from Pakistan have suffered the most. Except for short periods, Pakistan's bed-linen exports have been subjected to anti-dumping investigations or duties for the last 14 years. The EU first imposed anti-dumping duty on Pakistan's bed-linen in 1997 but it was withdrawn in 2002 when investigations established non-existence of dumping element in bed-linen exports from Pakistan.

In December 2002, the EU again started investigations but even before their completion slapped anti-dumping duty at the rate of 13.1 per cent in March 2004. This makes Pakistani products in-competitive as compared to those imported by EU duty free or at much lesser duty rates.

It is not mere suspicion but a fact that Pakistan has lost on trade front after 9/11, despite being a frontline state in US-led war on terror. Figures show that the US used to receive more than 85 per cent of Pakistani textile exports in the past, but those levels have dropped by 68 per cent since the terrorist attack on twin towers.

The question that arises here is that how can a keen buyer turn indifferent overnight, especially when Pakistan's textile sector has spent billions of rupees on modernisation and up-gradation of their industrial units. But a more pertinent question that comes to one's mind is that of what use the highly paid state advisors, lawyers and officials posted in commerce ministry's WTO cell are if they cannot take up the above-mentioned issues at relevant forums.

Courtesy: The News Pakistan