ISLAMABAD - The European Union (EU) Ambassador to Islamabad Lars-Gunnar said here on Sunday that liberalisation of trade with India would bring the prices down in Pakistan and could gradually create conducive ambiance to bilaterally tackle more complex issues like Kashmir.
Billing Prime Minister Mian Muhammad Nawaz Sharif’s initiative to bolster trade with India as ‘very positive,’ the Ambassador told APP in an exclusive interview that there was more ‘scope for regional trade’ for Pakistan than with the outside world and the potential ‘is far greater with India’.
There was ‘a very clear intention by the government and Prime Minister personally to try to move forward on trade liberalisation with India’ which will bring the prices of commodities down and ‘the consumers will benefit,’ from increase in trade relations between the two nuclear capable neighbours, he added.
He said there would be more competition and ‘some companies and industries would feel exposed if they were to open up trade with India’, however, some vulnerable sectors of the Pakistan economy could be given protection by the government.
EU closely follows developments in Pak-India relations and it is welcomed that there has been some progress in improving relations between the two countries in last couple of years, he said.
“It is unfortunate that the composite dialogue is stalled,” said EU envoy and hoped after coming elections in India ‘the common wisdom is that India will review its policies also towards Pakistan.’
“Our experience in the European Union has been to have a gradual process whereby, for instance, start opening up trade, start also opening up possibilities to travel more freely.” said the Ambassador.
“Visa liberalisation, business to business contacts, people to people contacts in general will help to build a greater understanding and also to deal with some of the animosities, prejudices,” between Pakistan and India, he said.
When questioned if an incident on the Line of Control (LoC) could impact trade between Islamabad and New Delhi, the EU Ambassador said ,whenever, there was an incident ‘the whole relationship suffers’.
But there seemed to be a willingness on both sides to overcome this tension, he added. “When it comes to Kashmir issue, I personally think that if you start trying to resolve the whole Kashmir conundrum, this is very difficult.”
“Whenever something goes wrong in Kashmir, India would tend to point the finger to Pakistan and Pakistan would point the finger against India.”
Fielding a question on the EU decision to grant Pakistan almost zero tariff for its exports to EU under the Generalised System of Preferences (GSP) Plus, he said that it “will give better market access to your companies, for your products made in Pakistan to the whole of European Union which has some 500 million inhabitants,” which was the single largest market in the world. EU would like to enhance its trade with Pakistan, he added.
He said GSP Plus would have an overall impact of $800 million trade with Pakistan per year though others have estimated more exports flowing into EU under this scheme.
“It is very much now in the hands of the business community, both here in Pakistan but also in the European Union,” comprising 28 members to utilise this facility available since January for boosting trade between the two sides.
Lars-Gunnar said the current overall trade between the EU and Pakistan was 8.5 billion Euros per year which was slightly surplus in favour of Pakistan and we “would expect that would rise in the coming years to about 10 per cent” in the first year or two.
Emphasising on the new areas of trade , EU Ambassador said it should not only be confined to ‘just bed linen and towels’ but should also include readymade garments of good quality because there was higher profit margin and because Pakistan was better placed in the region as both China and India did not enjoy GSP facility.
Of the 10 countries which were given GSP status, Pakistan was the largest country with the largest economy, he added.
Lars-Gunnar appreciated many initiatives taken by Prime Minister Nawaz Sharif government in creating business-friendly atmosphere by ‘giving special incentives’ like introducing loan schemes for young entrepreneurs.
“All of that is helpful and we see some positive signs already in the economy,” he said referring to Pakistan agreement with International Monetary Fund and overall positive austerity programme of the government.
About govt decision to have dialogue with Tehreek-e-Taliban (TTP), he said it was up to Pakistan “to decide how it wants to proceed with the overall security situation.”
Answering another question, he said “whatever the decision is the EU would support it because it would be a decision by the democratically elected government” following elections last year in which PML-N got an ‘undeniable victory’ in the polls.
On counter terrorism, he said the EU welcomed the Government comprehensive strategy to fight terrorism.
“I think it is very welcome as you know for the first time ever the Government have announced ‘a comprehensive security strategy’. It is a comprehensive document and was something that we have been asking for.”
“We have about 70 million Euros that we are spending on counter-terrorism related programme, under which equipment, vehicles to deal with the explosives, Improvised Explosive Devices were being provided to Pakistan.”
The Prime Minister’s Advisor on National Security and Foreign Affairs Sartaj Aziz would be visiting Brussels in last week of this month to have a second round of strategic dialogue on counter terrorism with the representatives of the European Union. Both sides had held the first round of these talks in Islamabad, he added.
APP
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