European values in question with the (ab)use of trade preferences in favour of #Pakistan ?

| February 6, 2018 | 0 Comments

In 1971, the European Community introduced the Generalized Scheme of Preferences (GSP), a trade subsidy, offering it to 176 countries. In 2012, following the tightening of the eligibility criteria, the number of countries eligible was reduced to 89. Further changes have seen the suspension of several countries from the scheme for a variety of reasons, writes Henri Malosse, former president of the European Economic and Social Committee.

Also in 2012, Europe adopted GSP+. The Plus (+) is a Delegated Regulation aimed at simplifying the entry mechanism to ensure transparency and predictability of the process. When a Standard GSP beneficiary requests GSP+ status, the country has to undertake a binding commitment to the ratification and effective implementation of 27 core conventions from the United Nations (UN) and the International Labour Organization (ILO), in areas such as human rights, labour rights, good governance and environmental justice.

Pakistan was added to the list of GSP + beneficiaries in 2014 due to devastating floods. It ratified the GSP+ Conventions but implementation has been far from effective. Since then, despite the evidence of overt violations of many of the conventions; despite requests for investigations by several member states; despite the 2016 resolution proposed by the European Union to the UN Human Rights Committee to expose the seriousness of the situation in the country; the European Commission, specifically The Directorate General responsible for Trade, is still considering to maintain GSP + for Pakistan without any inquiry or serious verification.

According to DG Trade, GSP + encourages Pakistan to make great efforts to adopt international conventions. It is true, Pakistan has adopted some new laws but implemented few. International observers and Pakistani NGOs, including trade unions, highlight the deterioration of the situation regarding women, labour and human rights. Religious minorities, including Christians, Hindus and Buddhist, even Islamic Shiites, Sufi and Ahmadis, are persecuted and are victims of attacks, threats and imprisonment under Blasphemy Laws.  Blasphemy, along with 28 other crimes, are punishable by death in Pakistan, putting the country near the top of the global list for persons executed and persons sitting on death row. These anti-free speech laws also make the territory unsafe for journalists.

The EU values fair, multilateral and rule-based order in trade arrangements, hence beneficiary countries are expected to put into practice key UN human rights and International Labour Organisation conventions. But, this rights based approach to trade is being ignored by DG Trade as it believes that suspending GSP+ will destabilize the economy, especially the textile industry, and those left unemployed may face serious hardships. The real concern should be that Pakistan has concentrated its exports in the textile sector with low-cost workers without trade union, social or labour rights of any kind. Women especially are receiving wages below the minimum standards and have no rights due to a justice system with inherent gender inequalities. Whilst it cannot be disputed that a few companies are benefitting from GSP+ subsidies, especially those close to the Government, it is without doubt that the benefits are not being seen by the workers or the majority of Pakistani people.

The most controversial reason given by DG Trade for retaining GSP+ is that without it, the EU would give what little influence they have in the region to China. To equate the GSP+ subsidy with the One Road One Belt investment given by China is naive. Pakistan has given China an essential economic corridor, with shipping access through Gwadar Port – a deal which has seen China bring its own security and construction workers despite receiving concessions from the Pakistani government for 40 years of an import and export tax free zone.

The opening of GSP and GSP+ to least developed countries such as Bangladesh, Sri Lanka, Armenia or Colombia, is not debated providing they comply with the criteria. Countries such as Belarus and Sri Lanka have had their subsidies removed for non-compliance which sets a benchmark example to others. Therefore, it is surprising to discover that the Islamic Republic of Pakistan, a powerful, nuclear-armed country, that has been repeatedly been labelled a “Terror State” under military rule is included on the list of GSP+ recipients. Indeed, the USA has been much more vocal than the European Union when it comes to concerns about Pakistani especially in respect of its role to shelter, train and support radical Islamist movements, some of whom are potentially entering Europe.

DG Trade acknowledges that GSP + is a good deal for the few European countries exporting machinery or importing products from Pakistan, forgetting the overall negative effects on manufacturing and jobs in Europe. Thought of the European Union’s partner countries in the Maghreb or those countries, like Sri Lanka, trying to genuinely address previous human rights abuses, are ignored.  Oddly enough, it is Cambodia that is currently in the spotlight of the European Commission in terms of possible investigation and suspension of privileges rather than Pakistan.

The European Union is bound by Article 207 of the Treaty on the Functioning of the European Union, the EU’s common commercial policy must be conducted “in the context of the principles and objectives of the Union’s external action”, and that, pursuant to Article 3 of the Treaty on European Union, it must contribute, inter alia, to sustainable development, the eradication of poverty and protection of human rights. Trade is not an end in itself.

In 1976, Paul Tran Van Thinh, former EU Ambassador in Geneva, now considered as the father of the GSPs, wrote: “The objective pursued remains that of improving qualitatively and quantitatively use of the preferences of the Community, and especially for the benefit of the countries which have real need, without unduly increasing burdens on European industries. This is a political objective which should not have an economically unbearable impact on Community industries.”

From good intentions originally, the European Commission today faces questions of justification of its trade and development policies which appear to have flexible criteria. The eligibility criteria of the GSP+ scheme as originally defined, appears to be irrelevant now. Nevertheless, at a time when the EU project and Brussels itself is under the microscope, can the citizens of Europe still have faith in a Commission which is silent against regimes who continually disregard European values?

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Category: A Frontpage, Pakistan

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