WTO approves duty-free export of Pakistani textiles to EU
The Council for Trade in Goods of the World Trade Organization (WTO) has approved tariff-free export of 75 Pakistani products to the EU market until the end of 2013.
The two-year tariff reductions will come into effect once approved by the WTO General Council and subsequent internal EU procedures are completed.
The purpose of the EU policy is to support the South Asian country in coping with the economic losses caused by major floods in 2010.
Pakistan’s textile exports are expected to increase significantly, accounting for more than 70% of Pakistan’s total exports to EU countries, approximately 3 billion euros ($3.9 billion).
Pakistan is the EU’s largest trading partner, accounting for nearly 30% of all EU imports.
Seventy-five products will be exempted from tariffs, amounting to approximately 900 million euros, or approximately 27% of Pakistan’s overall exports to the EU.
The WTO approved this unique trade provision for one of its member states at the request of the European Union because of the unique circumstances faced by Pakistan following devastating floods in 2010.
After nearly 18 months of discussion, the WTO approved this request, and Pakistan’s total exports are expected to increase by 15% to 20%.
Several countries opposed the EU’s proposal to exempt Pakistan from tariffs ahead of WTO approval, including India, Bangladesh, Indonesia, Brazil and Argentina.
Due to the fears of these countries, tariff quotas will be implemented on 20 Pakistani products instead of all tariffs being removed.
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