Tuesday, 23 April 2019

Pakistani minister: We want a ‘GSP-Plus’ trade deal with Brexit Britain

UK-Pakistan

PARIS: Pakistani Commerce Minister Khurram Dastgir Khan told matthew tempest that the UK leaving the EU was a “tremendous loss” for Pakistan’s dealings with Brussels, and that he would like a GSP-Plus deal with post-Brexit Britain. With nearly 25% of Pakistan’s exports going to the EU and the UK making up the largest share within that, Brexit was a “tremendous loss” for Pakistan, Mr Khan said. Not least because of the shared language and colonial history, Britain ‘knew’ Pakistan better than any other EU member country, he said. On top of that, the UK’s population of Pakistani descent is the third largest in the world and send back some £2 billion a year in remittances – now greatly reduced due to the plunge in the dollar value of sterling. Khan is now pushing UK International Trade Secretary Liam Fox for a series of business-to-business annual meetings in Karachi, Lahore, Manchester and Leeds. Khurram Dastgir Khan is Pakistan’s Federal Minister for Commerce. He spoke to Matthew Tempest.

Why are you in Brussels today?

Because for many years the EU and Pakistan have reached an understanding on promoting democracy and human rights. On that account, the EU in 2013, through all its institutions – the Commission, the Council, the Parliament – agreed to extend, along with nine other countries, Pakistan’s ‘special incentive’ for good governance and sustainable development. Its short name is GSP-Plus. [General System of Preferences]. But I think the real name is important, because it gives the sense of why this facility has been given to my country. It’s precisely to encourage better implementation of the rights under Pakistan’s constitution and our international obligations on human rights, children’s rights and minority rights. But a part of it is also strengthening democracy because the GSP-Plus came within six months of a newly-elected government [in Pakistan], it came at the right time to provide a good boost to Pakistan’s exports…

That has happened?

It has happened. Pakistan’s exports to the European Union have risen 37% in the past 34 months on which numbers are available. But I’m very delighted to say the reverse is also true: the EU’s exports to Pakistan have risen 14%. Which means that this trade concession/liberalisation is having the desired effect of mutually benefiting both sides. And I think out of 28 countries in the EU, 22 countries’ exports to Pakistan have risen. In many cases, although the numbers are very small, we are also seeing the trade beginning to happen in many countries in Eastern Europe with which we didn’t use to have any trade.

As commerce minister, how do you see Brexit?

My immediate concern I’ll share with you. When we analysed the situation – first of all, we had to do a Google search for ‘Article 50’, what it meant and what it was – our immediate concern was that Britain might go into recession. And since it is within the EU, one of our biggest destinations for exports, we thought our exports would suffer. Then, of course, there was also the question of the depreciation of the pound sterling, having the same effect, making our exports more expensive in Britain – that was our concern. Luckily, at least on the recession front, that scenario hasn’t happened. So exports are more or less holding – there is some degree of decline this year, but we are hoping to correct it as time goes by. Our concern has been, and we have been in communication with the new Department of International Trade on this, what does Brexit mean for the UK-Pakistan trade relationship? Immediately after Brexit happened (well, the referendum happened, Brexit hasn’t happened yet), I got endless queries from exporters about GSP-Plus, and whether it’s going to go on. So we have been able to give them some comfort that we expect at least until March 2019, that GSP-Plus will persist, and be available. There are in fact now discussions with the Department of International Trade. It our suggestion to them that perhaps the simplest way to go forward is for the UK to adopt a GSP-Plus like facility and allow it to run until the EU facility runs [out], 31 December 2023.

Right..

What it does is, since it doesn’t require any changes in the current UK regime, that the UK government and Pakistan are used to, this will be the simplest and most time-efficient way of going about it. And once we are agreed on that, then perhaps in the later part of 2019 or 2020, we can begin negotiation on a longer-term agreement. It would be a free trade agreement. For the foreseeable future, we would like a GSP-Plus-like facility, then in two or three years time, when the UK government has clarified its thinking on where it wants to go, and how speedily it wants to move, then we’ll be ready to negotiate a longer-term permanent agreement.

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