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Pakistan’s exports to European Union countries may stay in a danger zone as the European parliament last Thursday adopted a resolution urging the EU authorities to review GSP plus status as in their opinion “blasphemy cases are on the rise in Pakistan”.

Apparently, referring to the recent violent protests by the banned Tehreek-i-Labbaik Pakistan (TLP), the European resolution says: “The repeated and deceptive attacks against the French authorities by radical Pakistani groups which has led French nationals and companies to have to leave the country temporarily… And that a ruling party member tabled a resolution in the National Assembly demanding a debate on the expulsion of the French ambassador.” The resolution was overwhelmingly passed — 662 to 3 — with 26 not voting.

According to the latest data, Pakistan’s exports to the EU, in 2019-20, were at $7.477 million and the imports stood at $4.167 million.

The GSP plus facility is to be reviewed by the EU in January 2022 to decide if this facility is to continue or not. In case this facility is withdrawn, major dent in exports will take place and in return the industrial activities will plummet in the country which may trigger to a new surge in unemployment and a significant drop in exports, escalating the current account deficit which in turn would force Pakistan to go out begging for and mobilizing interests carrying dole, adding to the mountain of our strings attached unbearable debt facing certain default and its resultant ignoble repercussions.

It is, therefore, in Pakistan’s immediate geo-economic interests that Islamabad instead of defending the actions of the TLP in the face of the European Parliament’s resolution, upholds the ban already announced on the Party and distances itself immediately from the relevant resolution tabled in the NA the other day.

Of course, in the immediate run, if it so acted, the government would surely lose face among its voters and at the same time offer one more handle to the Opposition to beat it with. But that should be no more than a passing political setback than having to face a lasting protest during the remaining period of its term from the population at large due to shrinking job opportunities and mounting debt, because of the withdrawal of the GSP facility. And also, the government needs to keep in mind that the main reason for the reversals it had faced in most of the recently-held by-elections, especially the one held in Karachi was because the banned TLP had deprived the PTI thousands of its legitimate votes.

The GSP+ status comes with the obligation to ratify and implement 27 international conventions including commitments to guarantee human rights and religious freedom. The government, therefore, should strategize its moves in this regard in a way that Europe is convinced of its sincerity in implementing all the required conventions in full, especially those guaranteeing human rights and religious freedom so as to win back in time the confidence of European Parliament’s voters.

And this will also greatly help Pakistan in getting opened another window of immense economic potential on its North-Western borders as the US and NATO boots have finally started withdrawing from the forever war of Afghanistan.

In the wake, the US has renewed its offer of establishing the so-called Reconstruction Opportunity Zones (ROZs) - duty-free export zones along the Pakistan-Afghanistan border region. This offer was made to the two countries soon after the declaration of global war against terror following the 9/11 tragedy. But it could not be translated into reality as relations between Afghanistan and Pakistan on the one hand and on the other between Pakistan and the US fell victim to misunderstandings over what was considered by the US and Afghanistan the ‘double-faced’ policy of Islamabad that helped facilitate the creation of safe havens for Afghan Taliban in the now defunct Federally Administered Tribal Areas (FATA) and Balochistan, especially Quetta. This had resulted in the misuse of the border region by both Pakistan and Afghanistan against each other and the US continuingly challenging Pakistan for ‘doing more’ in relations to its commitment in participating in the war on terror.

For an area to be designated as an ROZ, Pakistan and Afghanistan were asked to fulfill certain conditions:

Economic reforms: market-based economy; anti-corruption measures; eliminating barriers to US trade and investment; and increasing availability of healthcare and educational opportunities.

National security: no activities that harm US national security interests orsupport for international terrorism.

Human and labour rights: elimination of human rights abuses and protection of core labour standards.

These eligibility criteria have been re-imposed through a recently moved bill for the purpose for qualifying for the ROZs which would allow duty-free export of “textile and apparel goods” to the United States from the region.

The ROZs are expected to “encourage businesses in Afghanistan and Pakistan to trade with the United States, creating economic benefits that endure well into the future. It is also expected to provide alternatives to extremism and “Narco-trafficking” and will help those “Afghans and Pakistanis who are resorting to any means to support their families.”

According to the bill: Fostering trade with the Afghanistan-Pakistan border region will help bolster economic development and improve the livelihoods of local populations. Expanding trade with Pakistan will strengthen ties with a key strategic partner and enhance economic development in a region important to US interests.

The US president will determine which products, from a specified list of textile and apparel goods, will be eligible for duty-free treatment. These products represent a range of goods commonly imported to the US from Pakistan and Afghanistan.

According to the bill, the president must determine that Pakistan and Afghanistan have adopted laws to prevent unlawful transshipment and allow US Customs and Border Protection access to investigate allegations of unlawful transshipment. Violating transshipment rules will result in a five-year denial of duty-free shipment for articles of the violator.

The bill lays out a programme and reporting requirements for technical assistance and capacity building, focusing on providing labour protections to workers in ROZs. It also requires Pakistan and Afghanistan to designate a labour official to monitor compliance and labour standards of registered textile firms.

According to the bill, the president has the authority to withdraw, suspend, or limit the application of the ROZs if conditions on the ground do not support US national interests.

The main reason why Pakistan had to adopt what was seen by the US and Afghanistan as its double-faced policy was Islamabad’s fears of encirclement by an anti-Pakistan Kabul government and a hostile India. This fear appears more deadly now that the US and India have also joined in strategic partnership meanwhile. Islamabad perhaps had wanted to remain on the right side of Afghan Taliban to be able to face the encirclement jointly.

But going by what India is being advised by its well-wishers it is possible that New Delhi might use the opportunity being offered by the US withdrawal from Afghanistan to mend fences with Pakistan rather than use it to encircle Pakistan.

In the opinion of MK Bhadrakumar (US could seek ‘expeditionary’ base deal with India - published in Asia Times on April 27, 2021) Considering that Afghanistan is a “graveyard of empires”, the calculus of fratricidal wars keeps changing and India is best advised to steer clear of the Afghan civil war. “Predicating any policy on the United States’ consistency is risky too. Therefore, India should never contemplate a Faustian deal allowing Pentagon basing arrangements on its soil for the upcoming Afghan operations as quid pro quo for raw materials for the Covid-19 vaccine. This should be delimited as a purely commercial transaction between the Indian vaccine manufacturing company and the US supplier of raw materials.”

According to C. Raja Mohan, the director of the National University of Singapore’s Institute of South Asian Studies (America, the Afghan Tragedy, and the Subcontinent, published in Asia Times on April 30, 2021) four decades of US involvement in Afghanistan have left South Asia transformed—and on the cusp of a realignment.

“Although the planned withdrawal leaves Afghanistan’s future open, it could lead to the next set of broader geopolitical shifts in the region. There is now a glimmer of hope that a normalization of relations between India and Pakistan could be part of the regional rearrangement after the United States departs, potentially limiting some of the negative consequences that have flowed out of Afghanistan in the last four decades.”

Also, India’s desire to establish trade and economic relations with Afghanistan and beyond (to Central Asia) over-land via Pakistan could be negotiated by Islamabad as a trade-off with India joining the CPEC for the economic benefit of the entire region, especially that of Pakistan. Both China and India would not have any reservations against such a trade-off as the two-way trade between the longstanding economic and strategic rivals, China and India, stood at $77.7 billion last year. Although that was lower than the previous year’s $85.5 billion total, it was enough to make China the largest commercial partner displacing the US - bilateral trade with whom came in at $75.9 billion amid muted demand for goods in the middle of a pandemic.

Copyright Business Recorder, 2021


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