"The textile relationship between the EU and Pakistan is unchanged," Bill Lakin, director general of Euratex, the European Apparel and Textile Organisation, said today.

Mr Zachid, of the Pakistani Representation to the EU, confirms this, adding recent reports that the EU has agreed to withdraw duty-free textile benefits to Pakistan under the European Commission notice C228 of 25 September 2002 have been misinterpreted.

Under an agreement signed last year between the European Union and Pakistan, from 1 January 2002 Pakistan has enjoyed special benefits under the Generalised System of Preferences (GSP) scheme for countries fighting drugs trafficking.

This scheme has been specifically tailored to target clothing and textiles, which account for three-quarters of Pakistan's exports to the EU. The EU has removed import tariffs (around 7 per cent) on garment imports from Pakistan and increased the 14 existing quotas on textile and clothing imports from Pakistan by 15 per cent. In return, Pakistan has also improved access for EU textile and clothing exports, reducing duties for 2002 to three rates of 5 per cent, 15 per cent and 25 per cent - a 5 per cent reduction compared with 2001.

According to Bill Lakin, Pakistan's preferential treatment is badly affecting the EU balance of textile and clothing trade with Pakistan. In 2001, EU textile and clothing imports from Pakistan amounted to 1.8 billion euros, while imports fell short of 21 million euros (down from 39 million euros in 2000).

India has fought hard to obtain the same preferential treatment from the EU for its textile and clothing exports, but with no success. Though the European Commission is keen to conclude a textile agreement with India through its improved market access policy, nothing has been concluded from EU-India negotiations.

By Jozef De Coster.