Plans to grant emergency trade preferences to Pakistan, as a response to the country's humanitarian and economic disaster caused by floods in the summer of 2010, were supported by the European Parliament on Tuesday. However, MEPs insisted on adding a safeguard clause to ensure that any trade preferences that would seriously threaten a European producer could be revoked. Negotiations for an agreement with Council can now begin.
Parliament backed proposals to drop import duties for around 75 different Pakistani imports for a period of one year, which could be extended for a further year. MEPs voted to increase the annual duty-free quota for several textile products, instead of simply doing away with these duties completely. However, the EP also inserted a safeguard clause into the regulation, to allow for important market disruptions to be dealt with.
Members also voted to introduce a clause into the regulation that would tie the preferential trade rules to Pakistan's human rights record. Parliament's amendment states that "if Pakistan adopts measures restricting human rights and workers' rights, gender equality or religious rights or if it provides terrorist organisations of any kind with backing or support, the Commission shall immediately propose to repeal" the regulation.
MEPs voted on all of the amendments to the regulation, but decided to postpone the final vote, and refer the report back to committee. This gives the Parliament a chance to start negotiations with the Council to reach a first-reading agreement in the next few months.
In addition, these emergency trade preferences also require a waiver from the World Trade Organization (WTO). While a month ago this step seemed quite improbable, there has recently been more optimism about the possibility of India and Pakistan coming to an understanding in Geneva to allow for the EU's planned trade preferences to come into effect.
Procedure: Co-decision (1st reading)