WRITTEN QUESTION E-3701/01

by Jonas Sjöstedt (GUE/NGL) to the Commission

(17 January 2002)

Subject: Renewal of the EU-Pakistan cooperation agreement

Chancellor Schröder of Germany visited Pakistan at the end of October 2001, when he is said to have promised that the cooperation agreement with Pakistan would be renewed (it had been frozen when President Musharraf seized power). Pursuant to one proposal, Pakistan is clearly already to be allowed to start exporting textile goods to the European Union without quotas.

Can the Commission explain what the current situation is with regard to the cooperation agreement with Pakistan and what changes are to be made as regards trade between the Union and Pakistan?

Answer given by Mr Lamy on behalf of the Commission

(15 February 2002)

A 3rd generation Co-operation Agreement between the Community and the Islamic Republic of Pakistan was signed in Islamabad on 24 November 2001 by President Musharraf, Prime Minister Verhofstadt and the President of the Commission. The new Agreement substantially enlarges the scope for co-operation between the two Parties, not only in the traditional areas of commercial, economic and development co-operation, but for new important fields, including the environment, industry and services, science and technology, regional co-operation, as well as drugs and money laundering. The Agreement is not linked with a financing protocol.

It will still take a few more weeks before the Agreement enters into force, as the two Parties have to complete some necessary procedures. There is no direct link between signature of the Agreement and the trade measures which the Honourable Member is referring to. The latter were proposed by the Commission and agreed by the Council in response to the crisis in the region surrounding Afghanistan.

The need to help Pakistan was discussed at the General Affairs Council of 8 October 2001. It was promptly taken up by the Commission which has proposed trade measures on two fronts: tariffs [zero duty for clothing by adding Pakistan to the list of countries benefiting from the drug regime under the Generalised tariff preferences (GSP) as of 1 January 2002] and quotas [15 % increase under the bilateral agreement initialled on 15 October 2001].

The drug regime provides duty free access for all industrial products included in the GSP general arrangements(1), and for many agricultural products, some of which are not included in the general arrangements. However, preferential treatment does not apply to sectors which are graduated. Pakistan is presently graduated in leather and textiles, but not in clothing.

In accordance with the agreement(2), the Community increased all Pakistani quotas for the year 2001 by 15 %. Following this increase the quota levels for the years 2002 to 2004 will be calculated on this new base level for 2001. On its side, Pakistan bound its tariffs on textiles and clothing on 17 December 2001 in the World Trade Organisation (WTO) at a level that is 10 %-points lower across the board in comparison to tariffs applied at the beginning of 2001 when negotiations started. They also have given commitments not to implement non-tariff barriers.

(1) Council Regulation (EC) No 2501/2001 of 10 December 2001 applying a scheme of generalised tariff preferences for the period from 1 January 2002 to 31 December 2004, OJ L 346, 31.12.2001.

(2) Council Decision 2001/935/EC of 17 December 2001 on the signing, on behalf of the Community, and provisional application of an Agreement in the form of a Memorandum of Understanding between the European Community and the Islamic Republic of Pakistan on transitional arrangements in the field of market access for textile and clothing products, OJ L 345, 29.12.2001.