ISLAMABAD, Feb 21: Prime Minister Shaukat Aziz has sent letters to his counterparts in European Union (EU) capitals, seeking their support in initiation of negotiations on a free-trade agreement (FTA) with Pakistan.

This was disclosed by Commerce Minister Humayun Akhtar Khan in reply to a question by MNA Nafisa Munawar Raja, who sought clarification from the ministry about the steps, so far, taken to enhance trade with the EU.

Mr Khan said his ministry had formulated a strategy, with the approval of the prime minister, to persuade the European Commission (EC) to initiate FTA negotiations with Pakistan.

The strategy includes lobbying with stakeholders, including EU member governments, members of the EU parliament and trade associations in Europe.

The minister informed the lower house that despite government’s best efforts, Pakistan would not qualify for special incentives arrangement for sustainable development and good governance (GSP) plus scheme of the EU, which grant tariff treatment to imports.

“Pakistan feels that exclusion from the scheme was discriminatory. Therefore, Pakistan has challenged the GSP plus scheme of the EU in the dispute settlement body (DSB) of the WTO,” the minister added.

Regarding levy of anti-dumping duty by the EU on Pakistani bed-linen, Mr Khan said Pakistan was of the view that the causation analysis conducted by EC investigation authorities was faulty.

To avoid further such actions, the ministry of commerce has challenged the imposition of the current anti-dumping duty on bed-linen export from Pakistan to EU in DSB of WTO.

The EU has already conveyed to Pakistan their unwillingness to start negotiations on FTA. The denial from the 25-member EU block came at a time when the EU 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.

Replying to another question, the minister said the trade deficit with Germany has widened by more than 135 per cent to $489.185 million in the year 2005-06 as against $207.994 million in the previous year.

He said Pakistan’s exports to Germany declined by 0.177 per cent to $687.368 million during the year 2005-06 as against $688.588 million. However, imports surged by 31.22 per cent to $1176.553 million during the year under review as against $896.582 million in the previous year.

Pakistan’s major exports to Germany include clothing of textile fabrics, manufactures of leather, cotton fabrics, made-up articles of textile materials, toys, games and sporting goods and synthetic artificial fibre.