Pakistan and future of EU ties

The clock is ticking for Pakistan. And it is set to go beyond this June when the Financial Action Task Force (FATF) gears up to review the country’s action plan for curbing terror financing. Admittedly, the government has admitted to needing more time to put its house in order; thereby suggesting that the incoming set-up will have its hands full in ensuring that Pakistan does not slip even further to join the likes of North Korea on the dreaded blacklist.

Islamabad has not been shy about blaming the US for the hot water it now finds itself in. It has talked of an American mission to embarrass Pakistan internationally; while avoiding uncomfortable questions as to its long-time allies jumping ship at the eleventh hour. Yet the prospect of being officially grey-listed this summer is but one of several challenges confronting the country today.

Others involve Pakistan’s largest trading partner.

There have been recent murmurings along the corridors of power in Brussels that we could be placed on an EU blacklist. Yet what this exactly pertains to remains unclear given that the trading bloc is known to take punitive action against those nations deemed to be less than cooperative when it comes to cracking down on tax-havens. Indeed, back in December the EU blacklisted some 17 countries towards this end. The European Council’s Code of Conduct Group, for its part, is notoriously secretive when it comes to deliberations.  Yet given that we are hardly at the centre of international tax black holes unlike, say London, this tentative ‘threat’ is most likely linked to our record on financing terror. That being said, we may have to wait until next week’s Modi-Macron meeting to learn more.

All of which brings us to the future of the EU Generalised System of Preferences Plus (GSP+) that affords Pakistan preferential trading terms. Britain credited itself with securing this sweetheart deal back in 2014 that affords local manufacturers, including textile-makers, tariff-free access to EU markets. Pakistan had been promised a similar deal from the Americans under the Enhanced Partnership with Pakistan Act; though this was never fully realised. Yet given that we only scraped through the current GSP+ review process due to concerns over our human rights and labour rights records the future may well hang in the balance when this comes up for re-consideration in two years; at the beginning of 2020. There is no time to lose especially given that Pakistan now accounts for three-quarters of all EU imports under this scheme. But with a Brexiteering Britain — the fear is that the big European powers will show Pakistan the door. After all, France and Germany who (along with the UK) supported American manoeuvring at FATF were said to oppose our inclusion in GSP+.

While the June deadline will be a tight-squeeze this should not stop the government from doing its best to convince FATF that we are serious about implementing a comprehensive set of mechanisms to track where money goes. And we have a whole two years to work towards keeping hold of tariff-free access to the EU. Thus it is imperative that the incoming regime focus on bringing to an end the systematic crackdowns on Pakistani journalists and civil society activists that have all too sadly become the norm. Similarly, a repeal of the death penalty would go some way to address our ‘mixed review’. This is to say nothing of the country’s not undeserved reputation as one that actively rejects religious pluralism.

Be that as it may, we do, nonetheless, have a message for both FATF and the EU. And it is one that hinges on the role of trade and economic stability in the fight against extremism. And that is surely in the best interests of everyone.  *

Published in Daily Times, March 6th 2018.