December 16, 2006	Saturday	Ziqa'ad 24, 1427

ISLAMABAD, Dec 15: The European Union (EU) has officially conveyed to Pakistan their unwillingness to start negotiations on a free trade agreement (FTA), Dawn has learnt.

The denial from the 25-member EU block came at a time when it has already offered India to start negotiations on the FTA. India is Pakistan’s traditional competitor in the EU market in a range of products, from textile to primary commodities.

“We have received information from Brussels through official channels that the EU has shown reluctance to go for an FTA with Pakistan,” a well-placed source in the foreign office told Dawn on condition of anonymity.

The message has already been conveyed to relevant ministry, the source claimed, and added that the issue might be now floated at a higher level.

The source said it would be very difficult for Pakistan to convince every member country of the EU for starting negotiations on the FTA. Pakistan had already made failed attempt to seek EU members’ help in getting votes for inclusion in the EU GSP plus scheme — zero rate of duty.

Pakistan, the source said, had requested the EU that their proposed move to have an FTA with India would hurt Pakistan’s market share, as goods coming from India would be cleared at preferential duty. Islamabad demanded a similar arrangement to have a level-playing field for its goods, the source added.

Reacting to the cold response from the EU on FTA, the source said that Islamabad had directed its mission in Geneva to start bilateral consultations on the EU-generalised system of preferences (GSP) plus scheme and anti-dumping duty on Pakistani bedlinen.

“If the EU fails to respond favourably to Pakistan’s request, Pakistan will request the WTO to set up a dispute panel on these cases,” the source said.

An official source in the commerce ministry told Dawn that exports of bedlinen and other products had witnessed negative growth to the EU following the implementation of the EU GSP plus scheme. The GSP scheme had almost given similar treatment to both India and Pakistan despite a huge difference in their economies.

The official said the proposed EU-India FTA would further squeeze market access for Pakistani products.

According to the official, the EU was obliged to make available identical tariff preferences to all similarly-situated countries on the basis of objective criteria.