ISLAMABAD, April 18: The Indian government has filed a complaint with the World Trade Organization (WTO) panel against the European Commission (EC) facility of granting tariff preferences on textiles products to Pakistan.
Well-placed sources told Dawn on Thursday that New Delhi had challenged the EC tariff preferences in the WTO appellate body on the pretext that the relief should also be given to India.
The EC has allowed tariff preferences on clothing to Pakistan in December 2001 under the EC’s programme of special arrangements to combat drug production and trafficking. The scheme was for three years’ period and was scheduled to be renewed by end of 2004.
The sources said that although this programme has been a part of the EC’s General System of Preferences (GSP) since 1990 and several Latin American countries were benefiting from this scheme, Pakistan only started benefiting from this scheme since December 2001.
“The scheme has been in existence for over 13 years, but India never challenged it. Grant of this concession to Pakistan has irked India and, therefore, it is trying to put pressure on the EU to either withdraw it from Pakistan or to allow some benefit to India,” said the sources.
India is a major beneficiary of GSP scheme and has recently approached the US to include several more items for her under this scheme. Furthermore, India also enjoys special preference for export of many commodities.
Citing an example, the sources said that India has a special quota of 20,000 tons of sugar to export to European Union (EU) at the EU’s internal inflated price. Similarly it has the special quota for US where it exports over 10,000 tons of sugar initially.
The sources said that India’s claim was that the drug arrangements were discriminatory and the preferences should be available to all developing countries under the Most Favoured Nation (MFN) principle.
During the recent visit of the EU’s director general trade, Pascal Lamy to India, sources said that Indian government has also made a similar request for getting the GSP scheme on their textile products following making the pledge of buying the Boeing aeroplanes from the EU.
“This is yet another tactics of putting pressure on EU to withdraw the facility from Pakistan,” said the sources.
The WTO panel has six months to decide on India’s complaint, said the sources and added that the EU along with beneficiary countries including Pakistan were putting up a joint defence.
They felt that the 1979 decision relating to GSP (the enabling clause) clearly allows such market access benefits for related countries affected by their fight against proliferation of illegal drugs.
This preference has been given on the basis of an over all assessment of the gravity of the drug problem in each beneficiary country. Pakistan was one of the drug producing countries and it has successfully been combating the growth and trafficking of drugs.
Considering Pakistan’s record, the sources said, the benefit has been correctly provided.
India, on the other hand, was arguing that it was for political reasons relating to September 11 incident and not for the drug arrangement that Pakistan has been given this benefit. Since this case relates to grant of whole GSP scheme, it has aroused a lot of interest and many countries were closely watching the developments taking place, added the sources.
