Author: Manoj Mitta
Publication: The Indian Express
Date: December 3, 2003
URL: http://www.indianexpress.com/full_story.php?content_id=36494
Even as the two neighbours have
been offering diplomatic sops to each other, India has pulled off a major
victory over Pakistan and the European Union in a trade dispute before
the World Trade Organisation (WTO).
The dispute arose because of what
India called the EU's ''discriminatory'' decision last year to grant duty
concessions in textiles to Pakistan ostensibly to help it check drug trafficking.
Brussels and Islamabad argued that
with the collapse of the Taliban-which had banned opium trade-there was
an upsurge in drug trafficking in Pakistan. And that these special concessions
which boosted Pakistan's exports by $300 million would indirectly help
it wean away people from the illegal narcotics trade.
Rejecting this yesterday in a 150-page
ruling in Geneva, the WTO's dispute settlement body (DSB) upheld India's
complaint and ruled that the EU had violated trade rules by granting this
preferential treatment to Pakistan-and 11 Latin American countries-at the
expense of other developing countries.
Restoring parity in concessions,
the DSB refused to buy the EU's explanation linking the Taliban's collapse
with the drug trade in Pakistan. Citing statistics of drug seizures made
over the years, the DSB said: ''The situation affecting Pakistan has been
serious at least since 1994'' and therefore held that the EU had no ''objective
criteria'' for suddenly giving benefits to that country last year.
The EU has lost the case despite
Pakistan's claim that duty concessions in textiles helped it increase exports
and create 60,000 more jobs. ''Consequently, a vast majority of those possibly
tempted by drug trafficking have been provided with alternative sources
of income,'' Pakistan claimed.
On India's contention that duty
concessions couldn't be expected to affect drug trafficking, the EU said:
''India appears to suggest that the only appropriate and necessary response
to the drug problem is the enforcement of criminal laws.''
