EU Trade Concession For Pakistan From July 2012, says Lars Gunnar Wigemark

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Ambassador of European Union Talks To Centreline &

Diplomatic News Agency (DNA)
BY ANSAR MAHMOOD BHATTI

Mr. Lars-Gunnar WIGEMARK, the Ambassador of European Union to Pakistan gave an exclusive interview to Centreline and Diplomatic News Agency (DNA). The interview, inter alia, turns out to be a unique document for those who want to learn more about EU and Pakistan, EU relations. The ambassador was quite vocal on issues such as Pakistan, Iran relations; emerging challenges in Afghanistan and Pakistan, India peace moves. Here are is the full text of his interview.

 

 

Let’s begin with Pakistan’s bid to have access to EU markets and I believe this particular goal seems quite obvious as the WTO restrictions are no more there. Can you share with us the updates on this issue and once this system comes into effect, will it really strengthen and reinforce Pakistan’s economy?

 

As you know, after lengthy deliberations the World Trade Organization (WTO) finally gave its green light on February 14, 2012, paving way for many Pakistani products to have easier access to EU markets and that process is now in its final stages. The matter  has been discussed during the past couple of weeks among EU Member States . And the final decision will be prepared as this journal goes to print in a so-called trilogue meeting between the European Commission, the Council, that is the EU Member States, and the   European Parliament. Under the new EU Lisbon Treaty all such issues need to be approved also by the Parliament. I would expect a final agreement will emerge very soon and that the trade concession will finally enter into force by 1 July this year. The European textile industry objected to some of these proposals, in particular given the recent economic difficulties in a number of EU Member States.  But a political commitment was given already in September 2010 by the EU Heads of State and Govnerment and the EU will not go back on its word. This is a very small price for assisting Pakistan’s battered economy by giving not just aid but better trade conditions.  It is also a political signal that we want to see a more stable, democratic and prosperous Pakistan. As you know, the move to give access to certain Pakistani products to EU markets was a sequel  to the massive flooding in Pakistan. The EU genuinely wanted to help Pakistan and therefore decided to grant these concessions.  There have been many unforeseen delays, but I can ensure you that many people have been working hard behind the scenes to overcome different concerns. These special trade measures are likely to remain in force until the end of 2013. When people ask me about an extension of this period and I say to them that it  would not be realistic, given the complicated and sensitive procedure so far. What we should instead focus our attention on the possibility of Pakistan’s gaining access to the new GSP plus scheme, which would provide greater and more long term benefits.

Should we assume, the GSP plus is no more under consideration or you think at a later stage Pakistan may have GSP plus as well?

 

The prospects of Pakistan’s access to Generalised System of Preferences (GSP Plus) are reasonably good. At the same time I would like to warn a little bit against pinning too many hopes and expectations on this issue because the process leading to the granting of GSP plus is long and challenging.  It is positive that the new EU regulation for this special trading scheme proposed by the European Commission to the EU Member States and the European Parliament has been adjusted to accommodate countries like Pakistan, which previously did not qualify since they were too highly developed.  And Pakistan surely stands to benefit more from GSP plus status as compared with just about any other country, But having that said the conditions that are required to be fulfilled to get that status are tough and the final version of the new EU regulation has yet to be adopted by the Council and the European Parliament.

One criteria will probably be the ratification and adherence to  27 major international human rights conventions. Pakistan has already signed and ratified all these treaties. Besides, Pakistan last year lifted the reservations it had against two important human rights conventions, which is very good news. Now we will see how your government implements these conventions and treaties – both  at federal and regional level, since under the 18th Amendment your provinces are playing an essential role also on human rights.

This is, of course, a monumental task, but we are encouraged by the way, for instance, the Advisor on Human Rights and his ministry is trying to implement these treaties. At the end of the day, it is up to the Government of Pakistan how it deals with these issues. Moreover, there are issues of child labour and we are told that the government is trying to address this as well.  We know that your parliament has already enacted new legislation on child labour, which undoubtedly is a step in the right direction.  I think the government steps taken towards this end clearly indicate seriousness on the part of the official machinery and we want to assure Pakistan government that we are with them. But, as I said before, the initiative to seek GSP plus status and meeting the various criteria has to come from the government.

 

A third summit between Pakistan and EU is now long due. Can you give us any updates on that?

 

I would not rule out  prospects of holding a third summit between the EU and Pakistan, but we have to understand that the European Union currently has many summits with many countries and there are also opportunities to meet on the margins of other major international meetings such as the UN General Assembly, ASEM summit etc.  Such high level meetings require a lot of home work and both sides need to deliver on commitment before, at, and after the summits.  The EU is not a nation state and it is a complicated affair to prepare for these events., With Pakistan we very recently agreed  a new 5 year Engagement Plan and under the umbrella of this plan we are in a position to broaden our relationship with Pakistan. I am pleased that we have started a proper dialogue on counter-terrorism and are about to do the same on e.g. non-proliferation. In general our political and security relations are starting to show results and we are also further expanding our trade and development cooperation. I don’t think a summit between EU and Pakistan can take place in 2012; however, what I can say is that during this year we shall definitely be able to find more ways and means to enhance our mutual cooperation and collaboration. Also, this year we are expecting a visit of the EU High Representative Cathy Ashton, which will surely boost relations.

 

Promotion of education in Pakistan has always been a priority area for the European Union. Can you spell out your efforts made in this regard? Besides, in Pakistan we have a class-based education system i.e. different educational institutions for the rich people and different for the poor. Do you have any such system in Europe? Do you think, the class-based education system in fact would lead us nowhere?

 

Education is our number one priority in terms of our cooperation and we are currently supporting in particular Khyber Pakhtoonkhwa and Sindh. We are providing direct budget support to the provincial governments. We have just signed a decision with Sindh for 30 million euro, which comes on the top of another 30 million that we already committed a couple of years ago. And for Khyber Pakhtoonkhwa it is about 40 million euro mostly for primary public education. Apart from the EU as such our member states like UK , Germany, the Netherlands and Denmark are also providing significant bilateral  support to education as well. Besides, we are a major program promote more and better technical and vocational training in Pakistan  that will be implemented by our German colleagues, but the project is chiefly funded by the EU. The purpose of this project is to build capacity of technical training in all provinces and equip the youth with proper skills, so that they could get a reasonable job. Keeping in view the youth bulge here it is expected that this program will deficiently be able to produce skillful hands in great numbers.

Regarding the second part of your question about a class based system of education, I agree with you that there must a uniform system of education. I personally went to excellent public schools in Sweden throughout primary and secondary school  and then I went to a private university: Harvard University in the Unites States. I think your system is more like the British one.  With many private schools also at primary and secondary and I am not saying it is a bad thing to have more and more private schools. To me, one should have freedom and choice of picking the most suitable system. What may work in one society may not be suitable for another. The problem here in Pakistan is that most of the public schools are not very well taken care of as compared with the private ones. It seems those who can afford it would like to put their children in private schools and I know that in some of EU Member States they essentially follow that line too. But even then we have not given up the public system because there are so many people who may not have means to send their children to private schools. 

Is the FoDP still active and relevant?

 

Well, the Friends of Democratic Pakistan (FoDP) still exists and I would say it is very much for Pakistan to decide what it would like to do with the FoDP and how it can move forward. We need to keep in mind that the FoDP should not be considered as a development forum only. For that we have something else, i.e the Pakistan Development Forum (PDF). But this development forum has not met for over a year now. The reason being that there were perhaps too many hopes and expectations on both sides and perhaps FoDP put too much pressure on Pakistan government, which seems to have annoyed the government. . There was a talk about another FoDP ministerial meeting this year, but frankly I do not have more details about it. I think now the focus is on the Afghanistan situation and whether it (Afghan situation) may have spill-over effects or not. Maybe the FoDP could have a role to play in that regard as well.

 

Here in Pakistan people have an impression as if the EU is more inclined towards India in terms of investments etc, as compared with Pakistan. Do you share this perception?

 

I would not say that we have closer links with India as compared with Pakistan. But as you know, the Indian economy is six times larger than that of Pakistan’s and it offers huge business and investment opportunities.. It is not just my impression. Many of the major and medium sized European companies working in Pakistan seem quite satisfied and they are making reasonable money. The plus point of the Indian economy is not just that it is bigger in size, but it is also growing much faster..  If the Pakistan economy grew at a similar pace, it would ultimately fetch more and more foreign investments. Businessmen would go where ever they would see the opportunities. We the government officials cannot dictate them. We try to facilitate trade and investment relations. There is no doubt Pakistan has major potential, but it is   difficult to convince and woo foreign investors to come here, especially when country is facing serious challenges such as load-shedding, gas shortages, security concerns and governance issues. So this whole image of Pakistan is far too negative in the eyes of the outside world.

It is very good that the Foreign Office of Pakistan is now undertaking efforts to improve the country’s image abroad. They need more resources to do that. Pakistan needs to undertake a broad political and commercial PR campaign to rebalance the negative image outside Pakistan. And I think you have institutions and individuals who can do that very well provided they have the necessary resources. Other countries in the region have conducted successful PR campaigns, resulting in additional inflow of investments and tourists. Although the security situation remains very difficult, we have seen an improvement in some areas recently. Many visitors who come here are positively surprised how friendly people are and that they are safe.  These positive news need to be presented in a balanced and transparent manner, You also have a democracy, which is certainly not flawless but at the same time even we do not pretend to have a perfect democracy either.  The point I want to make is that you still can make a good start.

Pakistan and Iran are close to forging a gas project partnership. The US has already showed its reservations. How does the EU see this move?

 

As you know, European Union has also recently imposed additional sanctions on Iran due to growing concerns with the Iranian nuclear program and its potentially destabilizing effects for the whole region. As regard gas deliveries, we believe that Pakistan has certain other options as well, and TAPI is one of those options.  For the time being, we do not consider Iran as a reliable partner in terms of energy.  But we also try to avoid isolating Iran diplomatically and the High Representative is very keen to continue the dialogue with Iran. The recent meeting in Istanbul yielded some positive signals from both sides. And that is the only advice we can give to Pakistan.  We do not want to pressurize Pakistan government in one way or another.  Your government is competent enough to make the right decisions.

 

Portugal and now Finland have closed down their embassies in Pakistan. Is it EU’s decision, or an individual decision of these countries? Don’t you think EU should play or can play a role of a mediator between the departing country and the host country, especially if an exit is made on security grounds?

 

As far as I know the Finnish Embassy is still open for another couple of months. Of course, it is for each Member State to decide whether to have a bilateral embassy in Pakistan, or anywhere else in the world. And by the way there is no such thing like a consultation between us and the Member State on where to they should maintain embassies. This is their own decision. It is, of course, always unfortunate when a country decides to close down its embassy and my understanding is that these closures are due to economic reasons. Many EU Member States are faced with a severe economic crisis and their national foreign services must cut back like everyone else.

This being said, under the Lisbon Treaty there is an increasing desire by the EU and our Member States to look at joint solutions for how to maintain a cost-effective and efficient diplomatic presence. All the Secretary Generals of the Member States and the Secretary General of the new EU foreign service have recently agreed to look for joint solutions e.g. in terms of housing and there are already a few joint “Europe houses” in capitals, housing both the EU Delegation and at least some Member  State embassies.

Now the delegation here can perform some functions. We still do not issue any visas. And although a proposal is under consideration in this regard, it will take time before we have joint Schengen visa and consular offices. Member States are still engaged very much in bilateral trade and investment not to mention cultural and other exchanges. But also in the area of investment there is a regime being worked on whereby we will be able to have EU investment treaties with third countries such as Pakistan. We are still in transitional phase but  within five to ten years I would predict that we will no longer have  bilateral investment regimes between Pakistan and individual EU Member States.  

 

How do you see the Afghan situation? Will the allied forces be able to pull out as per the given time schedule? Please also share with us your vision of a future Afghanistan?

 

The situation in Afghanistan is very complicated. The international community, including Pakistan, has invested a lot to bring about normalcy in Afghanistan. But it is now up to the Afghan people to take lead. I worked in Afghanistan 10 years ago for seven to eight months and the situation then was much better as compared with the existing situation; so we have to ask ourselves what we have achieved in ten years?  There are clearly some major improvements in the sense that now more boys and girls are going to school,; there is more infrastructure; roads and bridges have been built; schools and universities have been restored  and the Afghan economy is  actually growing at a healthy   8 per cent, which is double Pakistan’s economic.  On the other hand, much of this growth is driven by outside aid and Afghanistan’s economic recovery started from scratch.

Regarding the Qatar process, I would say it will deliver results only when it is inclusive and accepted by all stakeholders, including the Taliban and the Afghan government.  .

There are reports of corruption in the ranks of the Afghan government, but then corruption is everywhere; also in Pakistan or even in the European Union. And we must all fight to overcome this menace, in some cases by reducing support for those countries. We are trying to do the same thing here as well. I remember my predecessor, Jan, made a point in an interview with you that corruption is a bigger challenge than security. I think corruption undermines the whole fabric of every society.

 

Would you like to comment on situation in Baluchistan? What according to you may be the steps that can bring peace and normalcy to the province?

 

Like Afghanistan, the situation in Baluchistan is very complex and does not lend itself to any simplistic or stereotypical solution. We are clear that Baluchistan is very much part of Pakistan. And I think conspiracy theories that the province may secede from Pakistan are absolutely baseless and nonsense. But having said that, I would say — and as everybody knows—- Baluchistan is still the most neglected province in Pakistan. It seems quite clear that they have received less attention and fewer resources over the past several decades, although the federal government announced a couple of years ago a special package for the province.  But I would say it is not just matter of money — it is matter of bringing the Baluchi people, comprising Pushtoons, Hazaras, Hindus, into mainstream politics. Currently, there seems to be a trust deficit and many people I spoke with in Balochistan recently feel alienated. It is incumbent upon the federal government, as well as other relevant quarters, to try to overcome this feeling among the Baluchi people, starting perhaps with certain confidence-building measures.

 

How do you see the recent friendly moves between Pakistan and India? Do you think these contacts would help both countries sort out long stand issue(s) besides ensuring regional stability?

 

It is very good news indeed that Pakistan and India have started talking peace and I congratulate leaders in both Islamabad and Delhi for the statesmanship they have shown over the past year..  Within the EU there is a strong hope that this process will  lead to further improvements in Pak-Indo relations, which are essential for peace and stability across the whole region. The trade activity is likely to get considerable boost after the improved relations. We should keep in mind that trade is not exchange of goods and services, rather it facilitates freedom of movement of people as well, including reducing visa restrictions. After all this, is how the EU once began and now it is virtually unthinkable to have a major conflict in Europe between historical archenemies such as France and Germany.

I think the Indian companies should come to Pakistan and invest here and same goes for the Pakistani companies. They too ought to go there and explore business opportunities. And the trade fairs that recently organized on both sides of the border are definitely a positive step forward. The future of both Pakistan and India lies in this region and anything they can do to ensure regional peace will certainly be welcomed by all, including the EU and by the way, increasing contacts between both countries in itself is a clear manifestation that both sides believe in regional peace and stability. Eventually these contacts will also help both neighbors to resolve their long standing issues, including Kashmir.

 

Some European countries are faced with severe economic crisis and many would say, this crisis is because of Euro? Do you agree?

 

The crisis has little or nothing to do with the Euro as a currency, which has been a great success, becoming a stable and major world currency in little over a decade. In fact, I would argue that the world economy would be in much worse shape now had it not been for the establishment of the euro, which considerable improved overall long term growth and efficiencies in Europe and elsewhere since its inception.

 What has happened over the past two-three years is that , a number of Member States using the euro have  economic difficulties  due to long standing structural imbalances. In the past, a devaluation of the national currency would have been an easy but in the longer term very costly solution. By the way, some Member States who are still not using the euro face similar problems. Furthermore, as anyone who has studied basic international monetary economics will realize, you cannot have a monetary union without a certain degree of fiscal, i.e. budgetary, coordination and cohesion.  All Member States, whether they are outside or inside the EMU, are convinced that they need to undertake major economic reforms, cutting public and other expenses even though such measures are often unpopular and may lead to higher unemployment in the short term.  And for those who need support to come to terms with the economic and financial problems there is a fundamental solidarity in the EU.

We do not abandon one another when the going gets tough. However, Like Pakistan, actually, sometimes we in Europe have an image problem. People do not understand that the Euro in itself is a strong currency. Nobody in the euro zone is seriously talking about the breaking up of Euro.  Those who are outside of the zone sometimes say the Euro may not survive for long. I would like to ask them to simply inquire with business both inside and outside the EU whether they prefer to deal with one or 27 different currencies? Would they perhaps prefer 27 individual smaller national markets as well?  The lesson from this crisis is that we need much more integrated economic and fiscal policies among the countries using the Euro. It will still take some time to overcome the current challenges, but I predict that within two to three years, the EU economies will be much stronger and doubts about the Euro will be a thing of the past.

Does Turkey have any chances of becoming EU member any time soon?

What is the most important is that we consider Turkey as a European nation. The EU has had a customs union with Turkey since 1963. Although I do not see Turkey joining European Union soon, we should avoid giving the impression that Turkey’s membership is out of the question.  Turkey is still very much a candidate to membership in the EU. Keeping in mind European history and the major changes we have witnessed over the past two decades, I would say that Turkish membership is a clear possibility.  There is a suggestion of giving Turkey a sort of privileged partner’s status as an interim arrangement, but let me underline that it  is clearly written in the EU treaties that every European nation is entitled to seek the membership of European Union and that includes Turkey as well. Turkey has a lot to offer to EU and the EU has a lot to offer to Turkey.