December 11, 2001	Tuesday	Ramazan 25, 1422

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BRUSSELS, Dec 10: European Union foreign ministers on Monday agreed to give Pakistani garment exporters unhindered access to EU markets in what experts said would give a much-needed 150 million euro boost to the industry.

But in separate moves, the 15-nation group agreed on provisions for first-ever sanctions for developing countries which flout a range of internationally-agreed labour standards.

EU ministers agreed, despite protests from some governments, to include Pakistan on the list of countries entitled to special tariff benefits because of national efforts to combat drugs.

The measures, hitherto reserved for Central American nations, mean that all of Pakistan’s clothing exports to the EU will enter the European market without paying tariffs.

EU Trade Commissioner Pascal Lamy said the concession would eliminate up to 150 million euros worth of duties paid by Pakistani garment exporters. Clothing items represent 60 per cent of Pakistan’s overall textile exports to Europe.

“Pakistan has pursued a vigorous campaign to eradicate the production and transit of drugs in its territory. The Commission considers this should be supported, particularly given the difficulties Pakistan will face in continuing it while a massive influx of refugees arrives from Afghanistan,” said the European Commission.

The EU is in effect eliminating an existing 7% preferential duty rate as of January 1, 2002.

This is expected to make Pakistani garments more competitive in Europe.

In addition, Pakistani exports in all fields will see their level of preferential duty reductions doubled from the proposed 3.5% to 7% across the board.

EU discussions on Lamy’s call for textile quota increases for Pakistan are still under discussion in the Council of Ministers.

Diplomats said opposition from Portugal and Spain was now more muted but there was concern that the Commission could extend similar benefits to India which has also asked for a bilateral market access textile pact with the EU.

Both measures are part of a so-called “trade for peace” package for Pakistan drawn up by the EU.

Separately, EU foreign ministers agreed rules on workers standards which could threaten millions of dollars in EU trade benefits under the bloc’s generalized system of preferences (GSP).

As of January 2002, EU governments agreed that the European Commission will be able to suspend special tariff benefits for developing countries found to be in “systematic and repetitive” violation of workers’ rights.

Lamy told reporters the new rules were needed to satisfy European trade union demands for a greater E.U. focus on labour norms.

But the Commission would implement the rules in an “open and transparent” manner which ensured that they could not be used for protectionist aims, Lamy said.

Under the new GSP rules, developing countries accused of breaching a list of 8 core workers’ standards agreed in the International Labour Organisation (ILO) could lose access to a 3.5 per cent tariff benefit that the EU reserves for poor nations.

ILO standards to be monitored by the EU include the ban on use of child labour and forced labour but also a list of trade union rights, officials said.

The new provisions are much tougher than current GSP rules which focus on incentives rather than sanctions for developing nations seeking to improve labour standards.