Pakistan: EU’s dilemma
Dawn | Saturday, 17 Oct, 2009
Pakistan: EU’s dilemma
By Shada Islam
It’s been weeks of unrelenting anguish and despair. For Pakistan, certainly, as terrorists plunge deep into the heart of the security apparatus, revealing even more fissures in the state’s defence structures and causing more loss of lives, but also for many so-called ‘friends of Pakistan’ who appear increasingly at a loss on how to stop the country falling off the cliff.
Financial assistance? Not likely because Pakistan’s disgruntled response to the
$7.5bn non-military US aid package is likely to make other donors even more hesitant about providing funds to a country which, while eagerly seeking out foreign help in all international fora, is reluctant to accept any conditions on how the money is spent.
In addition, the spectacle of the Pakistan Army and government at loggerheads over the US deal has further discredited both institutions and raised renewed fears about the future of the country. As a result, even the best intentioned and most generous potential donor or investor is likely to balk at being asked to put money into Pakistan.
Trade benefits? Islamabad’s repeated — and increasingly petulant — demands for special trade access to western markets because of its role in fighting extremism is beginning to wear thin, not least because the country’s industrialists have done little to diversify from textiles into other sectors. Counter-terrorism cooperation? How do you help a country where neither the authorities nor the populace appear to have realised that the insurgents and terrorists attacking key institutions are enemies of the state, not Islamic warriors.
The outrage in Pakistan over the Kerry-Lugar bill and its ‘unacceptable’ demands that Islamabad put its house in order has baffled and bemused many in Europe who view the conditions attached to the US deal as both reasonable and correct.
Pakistan — and especially the Pakistan Army — may have become accustomed to receiving generous hand-outs with no questions asked from a compliant Bush administration but — believe it or not — most international aid packages come with strings attached. In Europe, there’s no such thing as a free lunch. And as many European taxpayers will tell you, that’s not a bad thing. Conditionality has long been the name of the game in Europe’s aid programmes to developing nations, with budgetary support to governments hinging on the country’s ability to ensure good governance, promote human rights and abide by the rule of law.
Similarly, the European Union’s hugely successful enlargement to bring in former communist nations of Eastern Europe is based on a carrot-and-stick approach which rewards countries for pro-democratic reforms and punishes human rights violations. Current negotiations on EU membership under way with Turkey and Croatia are similarly intrusive, with the European Commission entitled to demand that the two countries abide by EU rules and conditions or face a slowdown or even a suspension of negotiations.
In Turkey’s case, the EU has repeatedly insisted on the need to limit the role of the army and to ensure civilian control of military structures. As Romania and Bulgaria have learned, even once inside the club, member states can be threatened with sanctions if they do not comply with EU regulations, for instance on fighting corruption. As such, even as they applaud EU plans for more aid for Pakistan, Islamabad should be prepared to accept closer scrutiny and review of how the money is used.
Upcoming discussions between the EU and Pakistan on a Free Trade Agreement are also unlikely to be smooth-sailing as Islamabad would like. True, there is sympathy in Brussels and other EU capitals for Islamabad’s argument that it is losing markets to competitors such as China and India — and to suggestions that Pakistan should be included in the bloc’s next special trade preferential scheme (GSP Plus). But no special favours should be expected.
Unlike the US and some Asian countries, the EU does not like ‘trade lite’ free trade deals which are more about political networking than economic content. Also, EU free trade agreements have strong human rights and pro-democracy clauses which can make some foreign governments extremely uneasy. The EU and the Gulf Cooperation Council (GCC) for instance recently suspended free trade negotiations after almost 20 years of on-off discussions. The GCC said it did not accept the EU’s focus on ‘extraneous’ non-trade issues.
Certainly, Pakistan’s repeated requests for a free trade agreement come at the right time: the EU has switched focus from the uphill struggle to conclude the Doha trade round of World Trade Organisation negotiations to a quest for bilateral pacts. Slowly but surely, one step at a time, the EU is investing time, effort and political capital in either negotiating free trade pacts with selected countries or sounding out governments on their interest in such bilateral treaties.
What’s going on? Partly, it’s frustration with lack of progress in the Doha round. Partly it’s the zeal of the newly converted — backed up with a determination not to be left behind while the US, Australia and Asian nations forge their bilateral free trade networks. Europe does not want to be watching such initiatives from the sidelines.
The argument in Brussels is simple. While in a perfect world, trade liberalisation should be achieved through the WTO and the Doha round; for the moment bilateral free trade deals offer the best cure to boost the flagging world economy — while also giving the EU a higher global political profile. The EU and South Korea initialled a free trade deal last week despite protests from EU car makers which fear Asian competition.
The long-awaited trade pact, which scraps nearly all import tariffs, is potentially worth 100 billion euros to both economies and its advocates say it will help both sides fight the worst financial crisis in decades. However, the South Korean deal still needs to be approved by a majority of EU governments and the European Parliament.
Negotiators in Brussels have also taken the first steps towards forging an economic and trade agreement with Canada. Negotiations are under way with India, and Japan is knocking on EU doors to start talks on an ambitious economic integration agreement to boost bilateral trade. Taiwan has joined the queue. European policymakers are also exploring possible bilateral trade expansion pacts with Southeast Asian states.
Finally, as they scratch their heads over how best to help Pakistan confront its myriad challenges, EU policymakers appear eager to step up counter-terrorism cooperation with Islamabad. Clearly Pakistan’s security forces could do with some help from their friends. But before they extend a hand, potential partners will want a response to the question on everyone’s mind: just how serious are Pakistan and Pakistanis about tackling the terrorist threat?
The writer is Dawn’s correspondent in Brussels.
