Thank you, Chair.

On behalf of the European Union, I would like first to welcome the Delegation of Pakistan, led by Mr. Muhammad Sualeh Ahmad Faruqui, Federal Secretary Commerce, Ministry of Commerce. I would also like to thank the WTO Secretariat and the Government of Pakistan for their respective reports and express appreciation to H.E. Mrs. Bettina Waldmann (Germany) for her remarks as the Discussant.

At the outset let me express the EU and its Member States’ full solidarity with Ukraine and its people. The EU condemns in the strongest possible terms Russia's unprovoked and unjustified military aggression, which grossly violates international law and undermines international security and stability. The EU demands that Russia immediately ends this aggression and withdraws its troops and fully respects of Ukraine’s sovereignty and its territorial integrity.

Pakistan is an important partner for the EU. Our bilateral relations are guided by the 2004 Cooperation Agreement on Partnership and Development and by the EU-Pakistan Strategic Engagement Plan, signed in June 2019. This platform offers a political framework for enhanced dialogue and cooperation across a wide range of areas including political cooperation, security, governance, human rights, migration, trade and investment, sustainable development, education, science and technology.  

The EU supports Pakistan’s integration into the world economy as well as the Pakistani Government’s on-going economic reform agenda, currently in consultation with the international financial institutions.  

The EU and its Member States are also important development partners for Pakistan. Together they provide the country with about 700 million EUR per year for development and humanitarian assistance.

Trade too plays a significant role in our relationship. The EU is Pakistan's second largest trading partner and its main export destination, accounting for 28% of Pakistan’s exports. These exports consist mainly of textile and clothing (75.4% of Pakistan's total exports to the EU in 2020) and reflect the fact that the textile industry is the backbone of Pakistan's industry.

Pakistan is a beneficiary of the EU’s special incentive arrangement for sustainable development and good governance (GSP+) which was granted on 1 January 2014. Since then, Pakistan has become the GSP+ country with the largest share of eligible imports and the highest preference utilisation rate among all GSP+ beneficiaries (97%). GSP+ plays an important role in helping Pakistan with its internal process of reforms and human rights improvement, and in supporting the diversification of its export base, given that Pakistan's trade preference utilisation rate remains highly concentrated on the apparel and clothing sectors.

The EU would like to invite Pakistan to further elaborate on the product diversification measures it is taking with a view to scale up the trade benefits provided under GSP+ status to the local business communities and workers. What tangible results have been achieved so far under the current schemes and incentives offered by Pakistan to improve export competitiveness in other sectors with higher value-added products?

The EU concurs with both the Government's and the Secretariat's report that Pakistan’s ongoing efforts in implementation of critical structural reforms should be complemented by further actions to address its long-standing structural weaknesses and fiscal imbalances. This also requires increased efforts for a more favourable and predictable trade and investment environment, so as to strengthen its macroeconomic resilience and further integrate Pakistan’s output into regional and global value chains.

Pakistan continues to apply export duties and restrictions on a number of products, and in particular those on hides/skins and molasses negatively affect EU producers. These export restrictions can also undermine the potential benefit of the GSP+ regime. Despite some small positive developments, no significant progress has been made so far and the EU would therefore like to know when these export restrictions will be removed?

Pakistan is practicing a policy of import compression since 2018, due to its burgeoning trade deficit. The imposition of a 100% cash margin requirement on imports of certain non-essential goods and the “temporary” duties on the so called luxury products are detrimental to EU exports to Pakistan. The EU would therefore invite Pakistan to review this policy and in order to provide a level playing field.

The EU and Pakistan share a strong commitment to the WTO’s rule-based multilateral trading system. I hope that Pakistan’s Trade Policy Review will reflect that the country remains committed to a long-term agenda of trade liberalization.

We welcome that Pakistan actively participates in the key multilateral MC12 files, as well as in the initiative on MSMEs. We regret, however, that Pakistan is not seizing the opportunities provided by the Joint Statement Initiatives to advance international rule-making in areas that are key to the modernization of our economies. The EU looks forward to further engaging with Pakistan with the aim to preserve, strengthen and reform the WTO.

Chair,

The EU is confident that the present Trade Policy Review will be seized by Pakistan as a good opportunity to seek feedback from the membership on the means to further develop an ambitious trade and investment agenda, which will in turn also enable its deeper integration into the world trading system.

On behalf the EU, I wish Pakistan a very productive and successful review. Thank you.