Following is an article by UK Minister for Trade and Investment Mr. Gareth Thomas published in Pakistan's leading English Newspaper, The News International:

 

 

Trade deal with UK holds significant benefits for Pakistan

 

Friday, April 02, 2010
By Gareth Thomas

 

Trade drives economic growth, creates jobs and boosts wages. It also offers the best route out of poverty for the billion people across the world living on less than $1 a day.

That is why the UK Government, ahead of a crucial EU conference next month, is backing Pakistan’s entry to a trade scheme which could bring benefits to Pakistan of around 250 million Euros a year.

If Pakistan were to gain enhanced market access in the EU through the Generalised System of Preferences Plus (GSP +) scheme it would be able to export more than 6,000 products to the EU without having to pay restrictive trade tariffs.

Currently, over 20 per cent of its exports to the EU, particularly in economically significant industries such as textiles and fisheries, pay tariffs upon entry. Removing them could provide a crucial boost to these industries and increase growth and employment.

Britain and Pakistan have long enjoyed good trade relations and many Pakistani businesses see Britain as the country of first choice to do business with, according to UK Trade and Investment.

Although Pakistan has made significant progress in recent years, nearly a quarter of its 160 million population still lives in poverty, and one child in ten dies before their fifth birthday. Growing levels of insecurity and conflict are also serious problems. Pakistan is a nation ready to trade and grow its way out of poverty and GSP + could be a crucial catalyst for this. Trade not only helps to provide a route out of poverty, it also offers an investment in the future.

Being able to trade competitively in the global market is vital for a country to be able to move forward.

The GSP + scheme is more generous than the standard GSP scheme (which Pakistan is already a member of) and offers an additional reduction in tariffs. The scheme was set up to help “vulnerable” countries to trade with the EU.

In order to qualify, a country must ratify and implement 27 international conventions in areas such as human rights, labour standards and sustainable development.

Pakistan has already ratified 25 of these and would need to ratify the remaining two before becoming eligible. Provided that it does so, the UK is firmly committed to seeing Pakistan gain better market access to the EU through GSP+ and we are heavily engaged in discussions in Europe on how we might achieve this.

The final decision will be made by all EU Member States, with the European Parliament also needing to approve any decision. The UK’s Department for International Development (DFID) has always worked closely with Pakistan to help lift its poorest people out of poverty.

In recent years DFID support has helped to save the lives of 200,000 children and prevented another 800,000 from becoming malnourished. During 2008-11, we will be increasing aid to Pakistan for the period to £665 million - making it our second largest aid programme worldwide.

But in the longer term, it is trade that will help Pakistan the most in the future - providing the best opportunities for people to make a decent living through a stable economy. That is where the GSP + comes in.

If ratified, the agreement will mean that in the future it’s easier for traders and business people to get their goods to markets without the restrictive tariffs, which hold them back now.

A country has never pulled itself out of poverty with aid alone. Trade is always the catalyst. That’s why I hope that Pakistan can get a deal which can really benefit its people and its economy.

—Gareth Thomas, Minister for Trade and Development at the UK’s Department for International Development, has written this op-ed exclusively for The News.

 

 

Courtesy: The News International

April 02, 2010

 

Last updated: 03 April 2010