Before Musharraf's imminent visit to Washington
Pakistan still waiting for US textile package

7 February 2002

http://www.emergingtextiles.com

US president Bush could announce a US$350 million support for Pakistan when he will meet president Musharraf next week. Islamabad hopes that US textile barriers will also be lowered.

Washington pledged last fall it would reduce textile tariffs and raise quotas at the same time, as a reward for Pakistan's support against the Taliban regime.

Already meeting worst crisis in its long history, the US textile industry made it clear such measures would further depress activity and forced cutting more jobs, however.

Pakistan is still waiting for a "comprehensive trade package," according to a just released statement from Pakistan's commerce ministry.

Opposition from textile lawmakers

It is far from certain that the Bush administration would get some support from the House of Representatives where lawmakers from textile states strongly oppose reduction in textile tariffs.

For their part, Pakistani trade officials reminded US counterparts of duty-free access recently offered by the European Union.

Clothing and made-ups from Pakistan now benefit from GSP duties on EU's market.

Brussels also offered a substantial rise in textile quotas before they were again increased on 1 January, to comply with Uruguay Round agreements.

UK's trade unions now fear that a surge in EU's textile and clothing imports from Pakistan could destroy more jobs in Europe.

To convince UK's government, the Transport and General Workers' Union (T&G) this week requested an urgent meeting with Trade and Industry Secretary Patricia Hewitt.

Since Washington did not offer the same treatment, Pakistani exports will focus on EU's market, T&G deplored.

India negotiating with EU

New Delhi also denounced EU's agreement with Islamabad, which offers a decisive advantage to Pakistani competitors, Indian government said.

Indian trade officials were negotiating this week in Brussels a similar agreement, nevertheless. They expect their clothing and made-ups could benefit from EU's GSP treatment and therefore enjoy duty-free entry into EU's territory.

New Delhi is prepared reducing import tariffs in exchange for such a treatment, as Pakistan already did.