January 10, 2003	Friday	Ziqa’ad 6, 1423

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BRUSSELS, Jan 9: Pakistan’s new government is determined to forge closer political and business links with the European Union, recognising the 15-nation bloc’s increasing global clout and rising role in world trade, Pakistan’s Commerce Minister Humayun Akhtar Khan said on Thursday.

“The EU is a major trading partner for Pakistan — both currently and in the future,” Khan told Dawn following talks with European Trade Commissioner Pascal Lamy. “We want to work with the EU,” he said.

Already a major outlet for Pakistani exports, the EU’s trade significance was set to rise following the entry of 10 new members in 2004 and the planned removal of international textile quotas in 2005, said Khan.

Also, as a new democracy and a frontline state in the combat against terrorism, Pakistan needed continued EU help, he insisted.

Mr Khan, the first minister from the new Pakistani government to meet senior European Union officials, said he had assured Commissioner Lamy that Pakistan had successfully made the transition from military to civilian rule and that Islamabad was determined to continue efforts at economic deregulation and liberalization.

The government also believed there was “room for more growth-oriented policies,” Mr Khan said.

Striving to remove recent strains in relations between Islamabad and Brussels, the minister said he hoped for an early ratification of a new EU-Pakistan agreement by the European Parliament.

Parliament put its endorsement of the pact on hold last year after an EU election monitoring mission identified “serious flaws” in the October polls.

Parliamentary sources told Dawn the agreement was likely to remain on ice for several months, given opposition to the deal from several leading deputies.

“If we put the agreement to a vote at this stage, it could mean rejection — and that would not be a very useful political move,” said one parliamentary insider.

Another irritant in EU-Pakistan relations which is unlikely to disappear any time soon is a recently-opened EU anti-dumping investigation into Pakistan’s exports of bed linen.

“In our view the procedure should be terminated quickly and without duties,” Mr Khan underlined.

Mr Khan said: He had “vociferously explained” to Commissioner Lamy that Islamabad viewed the new inquiry as a move which was against the “spirit of Doha,” a reference to a commitment made at the World Trade Organisation (WTO) meeting in Qatar in 2001 to use anti-dumping provisions with restraint.

WTO ministers also promised not to encourage so-called “chain complaints” under which the termination of one anti-dumping inquiry is quickly followed up with another investigation.

Pakistan argues that by opening the new inquiry into its bed linen exports only months after its exporters stopped paying penalties following a previous investigation, means that the

EU is going back on its WTO pledge.

But EU officials insisted this was not the case. “We do not see the new investigation against Pakistan as a chain complaint it is based on new data,” a spokeswoman for Lamy insisted. The commission also had little power over anti-dumping complaints made by industry, she said.

The Commissioner had assured Pakistan, however, that the procedure would be conducted in “full transparency and not in a political manner.”

Mr Khan reiterated Pakistan’s demands for “exceptional flexibility” in using EU textile quotas, including the right to switch products from slow-moving categories to those which sell faster and better in Europe.

The Commission — after some initial hesitation — put the request to EU member governments last December but the proposals has run into trouble with Spain, Portugal and Italy. “This is a very sensitive issue for EU countries which also produce textiles,” said an EU official.

However Mr Khan said he was “confident” that Pakistan’s request would be met.

European Union officials said Lamy had in turn asked Pakistan to lower its “too high” import tariffs on automobiles and voiced concern at “certain discriminatory practices” in Pakistan against the EU in the banking sector.

Mr Khan insisted that recent strains in EU-Pakistan relations triggered by PIA’s decision to buy America’s Boeing aircraft rather than European Airbus were “no longer on the EU radar screen.”

“This issue is behind us,” the minister stressed, adding that he had explained to Pascal Lamy that there had been no government interference in the PIA decision.

European Union officials, however, admitted that the incident had not been very helpful. “Obviously this has not made our relations easier,” said one diplomat.

But an EU spokeswoman said Lamy wanted closer relations with Islamabad and was counting on Pakistan for help in moving forward the current round of WTO trade talks.