Verbatim report of proceedings

Wednesday, 20 October 2010 - Strasbourg

14. Aid for Pakistan and possible implication for the European industrial sector (debate)

  President. – The next item is the Commission statement on aid for Pakistan and possible implication for the European industrial sector.

  Karel De Gucht, Member of the Commission. – Madam President, honourable Members of Parliament, Europe is very concerned at the devastating impact of the floods in Pakistan, which destroyed livelihoods and communities throughout the country.

The scale of the disaster is unprecedented in Pakistan’s history. The cost in humanitarian needs, and to its already fragile economy, is immense. The severity of this crisis demands an immediate and substantial response, also taking into account the strategic importance of Pakistan’s development, security and stability in the region.

The European Council on 16 September called for a comprehensive package of short-, medium- and longer-term measures that will help underpin Pakistan’s recovery and future development. The initial EU response to the floods was swift and generous. Our common contribution to the humanitarian aid efforts presently stands at more than EUR 320 million from Member States and the European Commission in cash and in kind. This alone represents more than 60% of the global initial UN appeal.

The European Council recognised that, in addition to the immediate and significant humanitarian aid and development assistance, ambitious trade measures are essential for economic recovery and growth. Trade is therefore part of the long-term response to the ongoing crisis. To this end, the Commission adopted on 7 October a proposal for unilateral suspension of import duties on a number of important export items from Pakistan. This proposal is now submitted to Member States and the European Parliament.

The Commission is proposing to liberalise 75 tariff lines on imports from Pakistan, accounting for 27% of Pakistan’s current imports to the EU and almost EUR 900 million. This would yield an increase in EU imports from Pakistan of about EUR 100 million.

The objective of this measure is to support Pakistan’s reconstruction efforts in the medium term. Consequently, the special concessions will be limited in time – the Commission is proposing three years. Given the nature of Pakistan’s industrial base and export basket, where textiles account for more than 60%, a large number of products for which we propose liberalisation are textile products. Other industrial products such as ethanol are also included.

If Parliament and the Council can act quickly on this, we hope to have the measure in place on 1 January 2011. In parallel, we are working with other members of the World Trade Organisation to obtain the necessary permission – a WTO waiver – which has to be granted before the measure takes effect.

The trade concessions should be economically meaningful for Pakistan but, at the same time, take account of industrial sensitivities in the European Union. Therefore, in drawing up this proposal, we have tried to take into account industrial sensitivities in the EU, especially as regards textiles. Our analysis has shown that the impact on EU production is likely to be modest.

The potential increase in EU imports from Pakistan (EUR 100 million) corresponds to less than 0.5% of EU production value of the liberalised items, which, in fact, account for EUR 24 billion. The European Parliament’s support in helping this proposal come to fruition is essential to the presentation of a complete picture of EU solidarity in times of unprecedented needs.

Trade can be an important part of a long-term economic solution for Pakistan. We have a tight calendar to work to. You can count on me and my staff to explain our approach and reduce any lingering concerns you may have.

  Nuno Melo, on behalf of the PPE Group. – (PT) Madam President, I must say that I fully understand what they are going through in Pakistan, but I would also say that this decision is tragic for Europe and, particularly, for some countries that are already experiencing serious difficulties, such as Portugal, Spain and Greece.

For example, the textiles and clothing industry represents 11% of Portugal’s total exports, 22% of the manufacturing industry; 80% of production for some products even takes place in Portugal. Perhaps, then, this 80% spread across the 27 Member States means little to the European Commission, but it means an enormous amount to Portugal.

Europe cannot demand extremely damaging – but understandable – measures to control public audits and to fight the deficit, and, at the same time, take decisions that hurt the productive heartlands and capacities for wealth and job creation of those very same countries.

I must say too that this decision is also an incomprehensible attack on the normal market rules. I do not advocate any form of market protectionism, but I demand the strict defence of its proper rules: the rules of a market that is healthy and fair.

Please understand that this decision will make it possible for products manufactured in Pakistan to come on to the European market, and with production costs below those possible for our companies simply because the same conditions are not required of them during production; humble apologies, but I call that unfair competition. It is unfair competition because Pakistani companies do not have social costs relating to their workers, they do not have environmental costs, they are not particularly concerned with combating the child labour that goes on there, and they do not have equivalent restrictions on the use of primary materials for reasons of public health.

I would even ask: how is such a radical decision possible without a report being tabled first that exactly details its negative impact on the various Member States?

Nevertheless, I could venture some consequences right now, and those consequences are the closure and collapse of companies in the European Union, particularly in Portugal, and increased numbers of unemployed. It is good for you to fully understand this, because there will come a time when someone has to be responsible for it.

If, in the end, we can assume – as some surely will – that this proposal is inevitable, please at least give a bit of forethought to some things that are not yet under consideration. For example, the establishment of a tariff rate quota, which is provided for in the case of ethanol, but not in that of textiles. The waiver should be for a maximum of one year because aid is temporary. Believe me; no European company will survive three years in direct competition with Pakistani companies.

Madam President, I am finishing now: lastly, a provision is needed on primary materials, so that Pakistan does not block European companies’ access to such materials to benefit from this production itself.

  David Martin, on behalf of the S&D Group. – Madam President, I understand what Mr Melo is saying but I cannot agree with it. I welcome the Commission’s proposal to suspend import duties on key Pakistan imports into the European Union.

Firstly, the common ground between us is that Pakistan, which has not had an easy history since its birth as a nation, is going through its worst possible period. It is in the frontline of the war against terrorism, costing it so far, it is reckoned, USD 40 billion. We are all very well aware of the floods, the combined impact of which is worse than the Asian tsunami of 2004 and the Haitian floods of earlier this year. That is a significant blow to any country.

What I welcome about the Commission proposal is that we give Pakistan the opportunity to trade its way out of some of its difficulties. It is an intelligent proposal. Firstly, as the Commissioner has said, the 75 tariff lines that would help boost Pakistan’s trade by an estimated EUR 100 million a year do little harm to EU investment. This will not significantly damage any European Union industry and, equally importantly – in fact, quite possibly even more importantly – it will not harm the developing countries which are on a par with Pakistan, because none of the tariff lines affect products on the DDA preference erosion list. That is very positive.

The second thing that is sensible about the Commission proposal is that it is time-limited and does not unilaterally attempt to alter the GSP resolution. I welcome that because it still gives an incentive to Pakistan to come into line with social and human rights standards between now and 2014 in order to qualify for GSP+ in 2014. So it gives the emergency aid we need now but, at the same time, does not give carte blanche to the Pakistan Government. It says ‘you have a duty yourself to put your country in order if you want to continue to qualify for these benefits’.

This is a real test of Europe’s generosity and I hope that we, in this Parliament, will be prepared to meet it.

  Niccolò Rinaldi, on behalf of the ALDE Group. – (IT) Madam President, Commissioner, ladies and gentlemen, our debate today marks a fork in the road between two crucial principles. On the one hand, there is the duty of solidarity towards a country that has been hit by natural disasters, bringing its society, which already has structural problems, to its knees. On the other hand, there is the necessity for a balanced trade policy. With the European Commission’s proposal to suspend duties for Pakistan, the European Union is rightly avoiding a policy of mere humanitarian aid, allowing Pakistan to strengthen its economy and therefore its society.

The fact that all 74 of the tariff lines involved relate to the textile and clothing sector is almost inevitable for a country that can export only products within this sector. We liberal democrats definitely prefer recourse to this kind of measure, rather than agreeing on humanitarian aid which is incapable of giving the country a genuine boost. However, as Mr Melo reiterated a short while ago, we must not be naive and we ask the Commission – above all – not to make the mistake of naivety.

The Commissioner is well aware of the critical situation in which some textile districts, such as Prato, find themselves. Prato is a special case: The situation there has gone out of the control of the national authorities and there is widespread illegality, which is also exacerbated by the crisis in the European textiles sector.

Since we believe that it cannot be just the European textiles sector that pays for our rightful humanitarian solidarity with Pakistan, we ask for three things to be done: 1) To set up regulatory instruments to avoid all possible triangulation with other countries that could profit from the duties from which Pakistan is benefiting; 2) Not to aggravate the crisis in the European textile sector, by implementing measures that could instead support it, such as a reduction in the cost of electricity; and 3) To avoid creating a precedent for other countries that suffer such natural disasters. By working in this way, I think the aid for Pakistan is shared and sustainable, including in the long term, and that is what that country needs.

  Jacek Włosowicz, on behalf of the ECR Group. – (PL) We have met this evening to discuss the Commission’s proposal to help Pakistan in the aftermath of the flooding. We should bear in mind that almost 14 million people suffered from the flooding in Pakistan, which was of truly biblical dimensions. It caused unimaginable destruction in Pakistan itself, and the results will soon be felt all over the world. Why? Cotton, which is also referred to as white gold, and of which Pakistan is one of the main producers, grew poorly this year, and on top of that, has been largely destroyed in the country. Clothes manufacturers and leading global brands are already forecasting an increase in the price of cotton products. Cotton is a raw material we come across all the time, and which is used to manufacture clothes, banknotes, coffee filters, tents and fishing nets, as well as even being found in book bindings and many other everyday products. It is used for a huge number of purposes. We are in a time of crisis, and increases in the price of daily necessities are forecast. This makes the scale of the problem huge.

  Miguel Portas, on behalf of the GUE/NGL Group. – (PT) On the one hand, we have large-scale European importers, which will gain from Pakistani products coming into Europe. On the other hand, we have another small number of large Pakistani textile factories, which are actually outside the areas affected by the disaster, and which will also gain enormously from the Commission’s proposal.

That is the reality. The winners are not the ill, not the displaced, not the children, not the elderly whose homes were destroyed: the winners are wealthy businesspeople. What is happening here is that the disaster is being put to use: extreme climate phenomena are being made to serve the interests of big business.

That is what is absolutely intolerable about the proposal that the Commission is making. They would do well to backtrack.

  William (The Earl of) Dartmouth, on behalf of the EFD Group. – Madam President, in the past, I have often been sharply critical of British Prime Minister Cameron. However, Prime Minister Cameron was absolutely correct to ask for trade preferences to be granted to Pakistan. Now I use the word ‘ask’ with some care. Asking is exactly what the British Prime Minister has had to do.

Since joining the EU, the United Kingdom, the world’s fifth largest economy, does not have the autonomy to determine trade policy even with a Commonwealth country. Nevertheless, it is in the UK’s national interest that Pakistan should now get trade preferences. I rarely agree with David Martin but I do on this. Pakistan is not only a developing country with 170 million inhabitants and strategic borders with Afghanistan; it is also a country which has some thirty nuclear warheads.

The security implications of a collapse of the Pakistan State would be devastating to the security of the entire developed world. Trade preferences for Pakistan at this time may perhaps help stop that happening.

  Daniel Caspary (PPE). – (DE) Madam President, ladies and gentlemen, I think we should all recall, once again, how dramatic the situation was in Pakistan a couple of weeks ago and indeed still is in many places. Whole regions have been flooded, regions that are bigger than many of our Member States. Tens, in fact hundreds, of thousands of people are in major need. The infrastructure has been destroyed: roads, hospitals, universities, nurseries, schools, businesses. Many people’s livelihoods have been destroyed. I do not think we can even imagine what that is like. We all agree that we have to help. The problem, though, as we would say in German, is ‘wash me, but do not get me wet’. What do I mean by that? Well, direct financial aid costs money, which, of course, has to be taken from elsewhere in our budget. Indirect aid – trade facilitation – is what the Commission is now proposing, and there, too, there are, of course, concerns from those who may be affected. That is why we are quite rightly having this debate on this topic today.

The Commission has not proposed using the Generalised System of Preferences. That is a good thing, I feel. Fundamentally, I think the current solution of doing this via the WTO, taking this route and really trying to help people help themselves, is a prudent one. There are many unanswered questions, however, such as what will the impact on industries in the European Union really be? When I look at the Commission’s document, the proposal for a regulation, I see that it states in the explanatory memorandum right at the beginning that the working premise is that net imports into the EU would rise by EUR 100 million per year. Is that really major, durable aid to Pakistan? Will it really help to move the major sums that we are actually talking about here? On the other hand, the proposal will entail tariff revenue losses of EUR 80 million from our budget. Does this ratio add up, too? Does it make sense to do without EUR 80 million in customs revenue in order to receive EUR 100 million in increased imports? Are these figures correct? I would like some really head-on information from the Commission on this whole issue.

I am firmly convinced that we have to help Pakistan. I am also prepared to explain to the citizens of the European Union, and to those of my electoral district, that we have to do something and that aid for others always has to be paid for by someone. However, I am firmly convinced, Commissioner, that you should use the opportunity this evening and over the coming days and weeks to really convince the 736 Members of the European Parliament that your measures are the right ones to take, that they are sensible. You should also use the opportunity, above all, to highlight ways in which the workers of companies that may be affected in countries like Portugal, Italy and Spain, and in the European Union as a whole, can also find routes forward and prospects for themselves. I believe that these are truly the tasks to be performed in order to achieve a majority for your proposal in this House in a few weeks’ or months’ time. I believe there is a lot of work to be done by all those involved in connection with convincing people and providing information.

  Gianluca Susta (S&D). – (IT) Madam President, ladies and gentlemen, I think we have to be mindful of the crisis that the European Union and its Member States are experiencing on a global level. With a crisis that is hitting work, employment and growth, I wonder about the logic inspiring some European countries but, above all, the European Commission, in terms of international relations. The Commission proposal under discussion today will heavily penalise some industrial sectors, particularly textiles and, in a situation like the present one, we must ask ourselves whether it is reasonable.

Some people fear that these decisions are borne from the desire for Europe to take a leading role on the world stage. In reality, we know that this is not so and that the attempt to reduce the pressure, including terrorist pressure, within or related to some political and institutional systems, has even less to do with it. The truth is that not even the recent flood has anything to do with this proposal, since the main concentration of the Pakistani textiles industry is not based in the regions hit by the disaster.

The actual reason is that once more, the aim is to penalise a sector in favour of financing the European economy and to favour large-scale retail, rather than the interests of the manufacturing industry located in some European countries. This is profoundly mistaken in terms of growth, work and employment in a time of serious economic crisis and the need for real EU growth on global markets, in terms of its exports and its capacity for innovation and quality.

  Sajjad Karim (ECR). – Madam President, may I firstly thank the Commissioner and colleagues Martin and Caspary for their very helpful comments. Following the floods which took place, I actually have travelled to Pakistan to see for myself the extent of the devastation. The devastation caused by the floods is the biggest natural disaster in Pakistan’s history. It is certainly beyond anything that I could have imagined or expected to see.

Certainly, when I met with the Prime Minister of Pakistan on 22 September, he was very appreciative of the EU’s response to date and he believed it to be a very courageous response; courageous in the way that Commissioner De Gucht has described it. We have to be absolutely sure that we continue to react in an appropriate way. The Commission has now come forward with a legislative proposal to cut the tariff to zero on 75 tariff lines covering 27% of Pakistan’s exports to the EU, which would boost Pakistan’s exports by about EUR 100 million a year. This really is now a test of the EU’s credibility.

We must ensure that we translate the political agreement reached by EU leaders into action that will make a real difference and give the Pakistani economy a lifeline at this desperate time of need. We are, after all, their largest trading partner. I hear the concerns made by colleagues in this Chamber and it is only right that we are fair in our response; fair but ambitious. The trade concession to be offered to Pakistan needs to represent a credible effort by the EU and bring about meaningful economic benefits to Pakistan, whilst taking into account sensitivities of our own industries as well as other WTO members – in particular, those of least-developed countries.

I believe through this proposal we are being ambitious, we are being courageous, but, above all, we are being fair to ourselves, as well as to the people of Pakistan.

  Joe Higgins (GUE/NGL). – Madam President, clearly the 20 million people hit by the recent disastrous flooding in Pakistan need immediate and substantial assistance, especially the 100 000 children left homeless by the flood and in danger of dying simply because of a lack of food.

Critical to food production at affordable prices are the millions of small farmers and landless farmers now at the mercy of the landlord class. The distribution of free seeds, fertilisers that are environmentally compatible and other utilities could lay the basis for a rapid recovery of food supplies, but the liquidation of landlordism in Pakistan and the distribution of land to the landless is a key to food sustainability.

It was 140 years ago that the Irish peasantry conducted a major struggle for an end to landlordism, so it is long overdue here. Tariff reductions must go to the workers and the poor and not to the landlords, corrupt state officials or the profits of industrialists. Small farmers in Pakistan should benefit from just prices for their agricultural products on the world market, rather than callous speculators on the commodity markets.

  Cristiana Muscardini (PPE). – (IT) Madam President, Commissioner, ladies and gentlemen, we are all concerned about the floods that have devastated Pakistan and for the serious effects on the economy, but we are also concerned about the European Commission’s proposal, even if it was brought up on the initiative of the Heads of State or Government.

The regulation proposed by the Commission concentrates, above all, on the suspension of duties in the textile and leather goods sectors – which represent 60% of Pakistani exports with a turnover of almost EUR 200 million for textiles and EUR 510 million for the leather industry, both of which are characterised by production located in neighbouring areas that are not clearly affected by the floods.

It seemed to us that the political indications were instead directed at choosing an aid policy that did not damage structural sectors for the European economy. The suspension of duties will have a serious effect on European textiles and leather industries, with a potential loss of thousands of jobs over the planned three years of the regulation. These measures will be integrated and aggravated by the Generalised System of Preferences which, in 2013, will be extended to Pakistan as well.

Commissioner, we are all aware that exceptional and unilateral measures are being adopted because we want to help a large, poor country that is in trouble due to the disaster that has hit it and is further aggravated by the economic crisis and the failure to adjust the World Trade Organisation’s rules. Indeed, the current rules favour countries that are already developed, such as China and India, rather than poorer countries. Exceptional measures in favour of one country should not, however, cause a crisis in other countries.

The Commission proposal therefore requires significant corrections to diversify the sectors involved, including the production and exports of Pakistan, accepting a different vision and a serious reflection on the respect for human rights and the fight against terrorism. Pakistan must be helped, but through clear agreements, including those with regard to the political situation in the region.

  Josefa Andrés Barea (S&D). – (ES) Madam President, Commissioner, the floods in July and August of this year caused 1 800 deaths in Pakistan and affected 20 million people, 12.5 million of whom need humanitarian aid.

The European Union has undertaken a humanitarian effort of EUR 320 million – as you said – and Spain has contributed EUR 11 million. What we are discussing here is not a trade agreement, but supporting the strategic development of Pakistan.

The Commission, with a mandate from the Council, has liberalised 70 products over three years. There is no question that Pakistan’s exports will have varying impacts on the different EU countries, taking into account the specific characteristics of each country. The products that Pakistan may export are ethanol, textiles and leather goods.

The Commission maintains that it cannot amend the lists of products that will clash with textile production. Spain represents 16% of the volume of business from the textiles sector. The Community of Valencia represents 18% of Spanish textile production, and 17% of employment is in the Community of Valencia. The market for the Valencian textile sector is Europe and, within Europe, France, Italy and Germany. Therefore, textile products being imported from Pakistan reduces their market, both in Europe and within Spain.

You said that there is a strategic study, but has Pakistan’s industrial capacity been evaluated? Has consideration been given to reducing the list of textile products? Is there going to be an annual evaluation of the impact of this agreement?

  Christofer Fjellner (PPE). – (SV) Madam President, Commissioner, I would like to say that the abolition of duties and barriers to trade as a step in the provision of aid to Pakistan in connection with this major disaster is extremely welcome. I will say, probably for the first time in this Chamber, that I am impressed by both the Commission’s and the Council’s swift action and resolve on this issue.

It is certainly the case that money is needed. However, what is the point of providing support and money – other than to assuage our own bad conscience – if, at the same time, we make it more difficult, by means of duties and barriers to trade, for people to recover by their own efforts.

What we are doing right now, namely comprehensively and quickly abolishing duties and barriers to trade on all 75 different tariff lines, corresponding to 27% of Pakistan’s exports, is an excellent response to the disaster that this country is facing. However, we in Parliament now have a responsibility. We have a responsibility to act swiftly. In other words, this must not turn into an example of how long the political process can take. Pakistan needs money and aid now – not in a year’s time. We must demonstrate that we understand that.

At the same time, I am disheartened to see how wide the opposition to this is. I received a petition from European textile producers expressing their opposition to this, as they were afraid that Pakistan would export more to Europe, which they did not want.

However, is that not the whole point of it? Is it not the intention that they should be able to trade with us in order to get themselves out of poverty? If European consumers were to get slightly cheaper textiles, would that be a problem?

Free trade and solidarity are often embraced here right up until we are to make a decision on them. Let us here and now demonstrate that these values are most important to us when they are needed the most. There is probably no better opportunity to stand up for both free trade and solidarity than in connection with this proposal.

  Lara Comi (PPE). – (IT) Madam President, ladies and gentlemen, by means of this short speech, I should like to show my disagreement with the possible suspension of duties in favour of Pakistan for some three years and across 74 tariff lines, almost all of them in the textile and clothing sector.

My concerns regard the negative consequences on European industry and particularly Italian industry – and on the loss of jobs in Europe in a sector that has already been sorely tested by the economic crisis. I am referring in particular to the small and medium-sized enterprises in the sector that we are trying to help anyway, and which would suffer considerable damage.

Also, the fact that Pakistan set a 15% duty on its cotton fibre exports at the start of this year in order to discourage the supply of raw materials is not insignificant. It is clear that the aim is to conserve raw materials by seeking to obtain more attractive exchange rates for their export. I fully understand the need to help a country with serious problems, particularly following the serious disasters it has suffered. However, the European aid that I would hope for would be contributions towards the construction of roads and infrastructure using local labour.

  Jörg Leichtfried (S&D). – (DE) Madam President, Commissioner, it is not easy to hold an objective debate when you are talking about 100 000 children being made homeless, millions of farmers on the streets and people living in absolutely truly bitter poverty. I think it is right for the European Union to act quickly and provide help quickly here. The big question that arises for me, when it comes to the measures that you have proposed is, are we giving help in the right place or are we helping the wrong people? That is something that I would like explained in more detail, as it is absolutely justified to say, in relation to the textiles industry, that the aid does help Pakistan overall, but whether it reaches the right people, I am not so sure.

Secondly, I would also like to say that, if this aid helps people to help themselves, obviously you do have to take into account what effect all of this has back in Europe. I think, however, that there is already a drastic situation here, that we need to provide aid, and I hope that the aid does reach the people who really need to be helped.

  Jean Lambert (Verts/ALE). – Madam President, I just want to respond to some of the comments which have been made.

What Pakistan is trying to do at this point is actually to help itself out of the mess that it is in after the devastating floods. If the factories were in flood-hit areas, they would not be able to produce, so it is not surprising that the factories concerned are not in flood-hit areas.

The direct aid that could be put in is miniscule compared to what the need actually is. Distribution of the income from the additional exports is important – we know that for infrastructure, for energy supplies, for schools, for roads, etc. – while there are indeed responsibilities that lie with the democratically elected government of Pakistan in terms of its effectiveness, of income, of tax revenue and so on.

People have also talked about the need for greater diversity. If Pakistan had a greater diversity of industrial sectors, we would not be concentrating so much on textiles. I appeal to Members to offer that country this opportunity to help itself out of this disaster.

  João Ferreira (GUE/NGL). – (PT) Madam President, Commissioner, the tragedy in Pakistan demands that Europe show solidarity, but it cannot be a pretext for putting at risk the textile industry in a number of Member States, such as Portugal. There are other ways of showing solidarity: more effective types of aid that are aimed at the recovery of the affected areas and the improvement of the living conditions of local people, but also fairer types of aid.

Trade concessions are not long-term measures, as I have been saying. This benefits the large European importers above all, as it fulfils their long-held pretensions. However, it damages the textile industry, as well as the countries and regions that are most dependent on it; all this in a context of profound crisis and high unemployment.

While it is true that the measures proposed by the Commission cannot, under any circumstances, be a pretext for more redundancies, we cannot ignore the objective difficulties that these measures are creating. Measures are needed to defend the European textiles sector and the jobs related to it.

At the suggestion of the Confederal Group of the European United Left – Nordic Green Left, the Union budget 2010 provides for a budget heading allocated to creating a Union programme for the textiles and footwear sector. Where is this programme, Commissioner? What are its key elements? I will leave you with these questions.

  Claudio Morganti (EFD). – (IT) Madam President, ladies and gentlemen, I think it is paradoxical that instead of defending our jobs, the European Union puts them at risk by concealing the possible consequences of its actions behind well-meaning rhetoric of humanitarian aid. The possible reduction in duties for the next three years on clothing products from Pakistan risks plunging the manufacturing sector into an even greater crisis than the one we are currently experiencing, with the loss of 120 000 jobs across Europe, and 40 000 in Italy alone.

Pakistan must be helped, but we cannot adopt soft trading measures when my country – Italy – and other Member States are already feeling the effects of counterfeiting of textile products, especially from Asian countries and from China in particular. The Commission cannot give to charity at the expense, above all, of Italy, which represents 30% of the entire European textile sector. I believe that along with Pakistan, our small and medium-sized enterprises must be helped to escape from the crisis by imposing duties and quotas on Asian products. I am from Prato and my fellow citizens and I have had quite enough of measures like these.

  Georgios Papanikolaou (PPE). – (EL) Madam President, as far as manufacturing industry is concerned, I would remind the House that Pakistan is the fourth largest cotton producer in the world, accounting for 9% of global production, with the European Union following with just under 5.5%. Clearly, therefore, this is a very serious issue. Of course, we do not want protectionism, which damages healthy competition; on the contrary, we want free and open international trade. On the other hand, however, members have also raised this point. Mr Melo, who is from Portugal, a country with a fragile economy, was very graphic. Members referred to Italy. I would add Greece; you all know the problems it is facing. Of course, we should support Pakistan, but we should also monitor it and that is want I want to ask the Commission: do we have mechanisms to ensure that the aid we give Pakistan will be channelled in the right direction and not used for other purposes or for certain industries, to the detriment of European companies and European workers?

  Seán Kelly (PPE). – Madam President, I do not claim to be particularly au fait with the intricacies of this situation, but I do recognise the strategic importance of Pakistan. For that reason, I support the point made by Mr Karim, that it is in everybody’s interest to have a stable regime there in a region of great volatility.

I also have to say that a Union which was founded on the principles of peace and prosperity for our citizens should be in the vanguard of bringing peace and prosperity to other parts of the world, so I support the proposals here this evening, but I would like the Commission to answer very fully the points made by Mr Higgins and others on the Left.

Can they guarantee that the aid we would be giving would be going to those who deserve it and not to big traders and landlords? That is the key question this evening.

  Elisabeth Köstinger (PPE). – (DE) Madam President, the flooding disaster in Pakistan has humanitarian consequences on an unimaginable scale. I consider it to be the European Union’s duty to make sure that aid gets to the people of Pakistan quickly. Measures designed to invigorate the economy and employment over the long term are an important contribution for the EU to make in order to help this hard-hit country out of its crisis. However, I question whether a simple reduction in the customs tariff will have the desired effect. We need to clear up whether or not preferences for Pakistan flow into Third countries via indirect channels and thus, whether they have the desired effect. As well as the textiles industry, I am thinking here, above all, about the field of bio-ethanol.

My specific question to the Commission is whether setting up a tariff quota for ethanol is regarded as a truly sustainable and efficient option that will help the people of Pakistan. Can it be assessed whether the necessary sustainability criteria for imports into the EU are also fulfilled in the production of bio-ethanol.

(The speaker agreed to take a blue card question under Rule 149(8))

  William (The Earl of) Dartmouth (EFD). – Madam President, I just wonder if the speaker appreciates that just this one time, we are actually not discussing aid but are actually simply discussing trade preferences. This would give the opportunity for Pakistan to earn its way out of its problems by its own efforts and volition. I wonder if the speaker appreciates that.

  Elisabeth Köstinger (PPE). – (DE) Madam President, I do believe that that is the core element that we are discussing. The measures need to be clearly thought through in order to ensure sustainable assistance. Above all, there is always the question of the extent to which the cost/benefit calculation ultimately adds up for Europe.

  Sergio Paolo Francesco Silvestris (PPE). – (IT) Madam President, ladies and gentlemen, Pakistan must undoubtedly be helped following the floods that have hit it. However, the question we must ask ourselves today is what kind of help this country needs most, and what kind is the European Union best capable of providing. We must act quickly, but also effectively.

Indeed, it is the effectiveness of the European Commission’s proposal which causes me great concern. I find it to be a patchy proposal which, by intervening primarily in the textile and leather sectors, would risk not being effective enough, since this aid could generate fresh tensions due to the new instances of poverty it would generate in Europe and would further hamstring the European textile sector, which is already in serious decline.

Then we must consider the fact that by favouring exports from producer businesses, we are actually helping those areas of Pakistan which have not been flooded, whereas our aid should serve to build competitiveness and development, helping the recovery of production in the areas of the country that have been hit by the catastrophe. For all these reasons, I believe that the path of abolishing duties is absolutely unsuitable and we do not consent to it or support it.

  Karel De Gucht, Member of the Commission. – Madam President, first of all, I would like to present very clearly the figures we are speaking about. We are talking about a trade volume of EUR 900 million. The effect will be EUR 100 million of additional exports to the European market by Pakistan, but the overall balance for the European Union will only be EUR 50 million because, as a result of the more favourable position of Pakistan to export on the European market, there will also be a certain amount of trade diversion, which means that other importers will lose some opportunities on the European markets. So, the overall impact will be about EUR 50 million on a yearly basis.

I am saying this because I heard again in this debate that 120 000 jobs would be lost. Now you all have a calculator tool on your mobile phone; if Europe is to lose 120 000 jobs because of an additional EUR 50 million of imports on the European market, then there is really a serious problem with the European textile industry, regardless of what happens with Pakistan. It is simply not serious to put that argument forward.

That is my first remark. Secondly, we have duly taken into account the sensitivities of the European textile industry and the somewhat difficult position this industry might be in. Bed linen is not part of the tariff lines that we are proposing, and neither are apparel or household linen, which are three of the most sensitive product lines for Europe.

On the contrary, a lot of semi-finished products are included. If they are semi-finished, it means that they will be finished in Europe, which should, in fact, generate cheaper imports for those companies which give the final treatment to such products. So this is not immediately harming us. I would even say the opposite. We have really been studying very carefully what would be a good proposal for Pakistan without harming European industry too much at a time when we are also coming out of an economic crisis that is certainly not easy to manage.

A comment was also raised concerning cotton exports. There is a scarcity on the worldwide cotton market, and it is true that Pakistan is one of the main cotton producers. What I have in mind is that once we have this agreement, once we see that we are really getting somewhere, we should also ask Pakistan to make sure that our own textile industry gets enough cotton to be able to produce what the market is asking for. As there is such a worldwide scarcity of cotton, or at least certain varieties of cotton, you might ask why we do not import those cotton varieties from Africa. Well, because they do not produce the right varieties of cotton we need, and it is not easy to switch to a different kind of cotton production from one day to another, so we will have to pay special attention to that problem.

Let me just conclude by saying that when you look at the situation with respect to Pakistan, what we need is more aid and more trade; we need both. The European Union has contributed EUR 320 million already, 60% of what the United Nations initially asked for. We will continue to do so; that is more aid.

Trade is not aid, as has been said in this plenary. Trade is about giving opportunities to the Pakistani economy to produce and to export and to give jobs to the people that need those jobs. I think it is an essential tool in economic recovery that we should give additional trading opportunities to Pakistan. But it is not about aid, which means that you cannot direct those who will be, let us say, the beneficiaries. It is much easier to direct the process in the case of trade, but we also know that while trade has its frailties we are not going to recover an economy by aid.

I think you need both elements, aid and trade, and that is why we are working on both possibilities. It is true that we should also bear in mind, as I have been saying in this plenary, that we are talking about a region that has been severely devastated. Many Members of Parliament from Italy have spoken, and I understand that the territory of Pakistan which is flooded is about the size of the territory of the whole of Italy. That is what we are talking about, so I think we should help them, but we should also bear in mind that this is a very sensitive region which is geo-strategically very important. It is also very important to us and to our security. It would be very dangerous for Europe if this region became unstable, so we should do everything we can to make sure that the stability of the region is not affected by what happens in Pakistan.

So this is an overall array of measures which we are employing. We have political discussions with Pakistan; we had a summit with them recently, and we will continue to have such discussions. Several EU officials have been going there, as well as Commissioner Georgieva, for example, with respect to humanitarian aid. We have the aid package, which is considerable, and we also have an economic approach in terms of more trade. I think, and I hope, that this will really mean something considerable for Pakistan. I am also convinced that by helping Pakistan, we also, to a certain extent, help ourselves.

  President. – The debate is closed.