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WTO waiver

February 1, 2012

The WTO has allowed the EU to waive import taxes on 75 products from Pakistan to help the country recover from devastating floods in 2010. The humanitarian action is unprecedented at the international trade body.

https://p.dw.com/p/13uSu
Woman inspects cotton at textile factory in Pakistan
The waiver includes textiles, leather and industrial alcoholImage: picture-alliance/dpa

The World Trade Organization on Wednesday approved a waiver for Pakistan to export 75 types of products to the European Union without paying tariffs, in a humanitarian gesture to help the country recover from massive floods in 2010.

Pakistani trade officials said they expected the waiver would significantly increase exports of textiles. It would also cover products like leather and industrial alcohol.

"This waiver… shows the human face of the WTO," Pakistan's WTO ambassador Shahid Bashir told the AFP news agency. "The Pakistani people have faith in the multi-lateral trade system."

Pakistan was devastated by massive flooding in 2010 and its economy has not yet fully recovered. The EU offered the tariff waiver on humanitarian grounds - an unprecedented action at the WTO.

EU officials said the imports of the 75 goods make up about 27 percent of all imports from Pakistan and are worth almost 900 million euros ($1.19 billion). The duty-free access is expected to boost that value by 15 to 20 percent, or some 100 million euros compared to 2009 levels.

The waiver was initially contested by a group of textile-exporting countries including Brazil, India, Bangladesh and Indonesia. WTO rules generally forbid giving preferential treatment to one country over others.

But the countries dropped their objections after the EU modified the waiver to use tariff rate quotas on 20 products instead of complete liberalization.

If approved by the WTO's General Council, the waiver is to apply from January 1, 2012 to December 31, 2013. The EU may request a one-year extension if it decides the Pakistani economy needs more time to recover.

acb/jw (AFP, AP, Reuters)