Bangladesh may withdraw complaint over EU help for Pakistan

ADDU CITY, Maldives - Bangladesh is considering withdrawing a complaint about a European move to grant beneficial import conditions to Pakistani textile makers as an aid measure following Pakistan's floods last year, a senior Bangladeshi official said on Wednesday.

Bangladesh - Garment Industry / Photo: Corbis

Europe and Pakistan had expected a long-announced plan for trade preferences for Pakistani textile makers to be approved during a meeting of trade diplomats in Geneva this week, but a Bangladeshi complaint halted the move.

Pakistan was being granted the beneficial import conditions to its textile makers as an aid measure following devastating floods in the South Asian country last year.

Bangladeshi officials said their Pakistani counterparts had "unofficially" raised the matter on the sidelines of an ongoing South Asian leaders' summit on this remote Maldivian atoll.

"I will check with Geneva ... as far as I know we are supposed to withdraw this (complaint)," Bangladesh Foreign Secretary Mohamed Mijarul Quayes told Reuters.

"There has been some informal discussion on this here with the Pakistani officials," he said. "They have asked us unofficially about it and we have told them we are checking and will get back to them. So discussions are on to find out a way."

Islamabad called Dhaka's objections to the beneficial import conditions for its textile makers "an accident".

"Of course, we are very concerned about it. We have been conveyed by them that it was at best an accident," Hina Rabbani Khar, Pakistan's foreign minister, told Reuters.

Bangladesh had concerns about the impact of the European measures, which would make it easier for Pakistan to export textiles to Europe. Bangladesh competes with Pakistan for textiles sales to the European market.

The two-year cut in tariffs offered by the EU would be a small boost for Pakistan's exporters.

World Trade Organisation rules say the same deal must be offered to all trade partners, so by making an exception for Pakistan, the EU needs to get all WTO members on side and any one country can block the deal.

Until recently India, Pakistan's neighbour and rival, had objected to the European plan, effectively vetoing it. But as tensions between the two traditional South Asian enemies have eased, India signalled it no longer opposed the plan.

(Editing by Sugita Katyal)