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Textile producing countries oppose EU concession to Pakistan
Dec '10
The European Union's proposal of granting duty free access to Pakistan's textile goods as a relief measure against the devastating floods has faced strong opposition from countries like India, Peru and Bangladesh.

These countries have notified the World Trade Organisation (WTO) that granting such preferential access is not the right way to help a nation, as it would prove detrimental to the interests of other competing nations.

The WTO's Committee on trade in goods during its recent meeting deferred the decision on sanctioning the EU's proposal of granting a duty free access to 75 Pakistani items including 64 textile items, as the three countries opposed the same. The decision on the proposal would now be taken during the next Committee meeting to be held towards the end of January, 2011.

If Pakistani textile industry is granted such preferential treatment it would prove detrimental for the Indian textile industry, as Pakistan is amongst the strongest competitors of India in the EU market.

EU proposes to grant duty-free access to 75 items for a period of three years from January 2011 onwards, which is believed to add up to around € 900 million in terms of import value.

Though, India's last year's garment and textile exports totalled to $5.9 billion which is higher than double the exports of Pakistan worth $2.2 billion, but still India is feared to lose its market share to Pakistan if the latter is granted duty-free access as the EU levies an import duty of around 6 to 12 percent on these items.

Bangladesh has proposed that if the EU's proposal is sanctioned, it should be given the compensation for the trade loss that it would suffer due to such preferential treatment.

The proposal is not being opposed only by the competing nations, but several other textile producing nations within the EU like Spain, Italy and Portugal, who have also voiced their discontent.

Fibre2fashion News Desk - India

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