The European Commission has proposed for a unilateral suspension of import duties on a number of important export items from Pakistan for the next three years, as part of an aid-linked package designed to ease recovery from the flood catastrophe earlier this year. The European council of 16 September 2010 “mandated” the Commission to present in October a proposal to unilaterally suspend, for a limited period of time, duties on important imports from Pakistan. This economic assistance would come on top of the EU’s significant humanitarian and development aid.

 The proposed preferences would liberalise 75 tariff lines on imports from Pakistan, accounting for 27% of Pakistan’s current imports to the EU. A large number of the products for liberalisation include textiles (65 lines), but there are also other industrial products, such as ethanol.

 The EU said that this trade measure would result in an estimated increase of European Union imports from Pakistan to the tune of around 100 million euros.

European Trade commissioner Karel De Gucht hoped that the offer could be applied as of January 1, 2011. However, the World Trade Organisation still has to back this proposal from the European Commission.

Nevertheless, the commission has taken into account both industrial sensitivities in the EU and those of partners in the WTO. The EU industries are fearful of preferential treatment for Pakistan’s cheaper textiles; they fear that up to 120.000 jobs could be at risk in Europe.

The European Commission launched a public consultation on 12 July to aks businesses and the public for their views on possible VAT simplifications to facilitate customs centralised clearance.

“Centralised clearance” is a possibility for the importers that hold an authorization to both declare and pay customs duties to the customs administration of their Member State of authorisation, independent from the place of import and destination of goods within the EU. However, under the present VAT rules, the importers, even using centralised clearance, would still be subject to VAT obligations in each Member State of physical arrival and destination of goods. The aim of this consultation is to obtain views on a series of solutions relating to the possible adaptions of VAT collection rules.

The consultation will run until 31 October 2010. You can find more information here.