Cameron urges EU to form Pakistan trade link

David Cameron will today urge EU leaders to back a major new trade partnership between Europe and Pakistan in the wake of the worst floods in the country’s history.

He will tell a summit in Brussels that the scale of the disaster warrants a response far beyond the vital immediate humanitarian effort.

In a letter to summit chairman Herman Van Rompuy ahead of the one-day meeting, the Prime Minister called for “an ambitious new partnership between the EU and Pakistan on serious economic reform and trade, the benefits of which will be worth far more to Pakistan than even a sizeable aid package”.

At least 1,600 people have died and 20 million been left homeless after monsoon rains caused widespread devastation and led to fears that the scale of the damage could trigger economic collapse.

Mr Cameron wants the summit to make a firm pledge for “longer-term development assistance which properly reflects the enormity of the challenges facing Pakistan”.

He also wants to see “a concrete political commitment from the EU to Pakistan to enhance significantly its access to the EU market in the short term”.

The summit will look at admitting Pakistan to a group of countries which already get preferential access to EU markets in return for meeting certain economic and political criteria – an arrangement seen as part of the EU’s role in stabilising countries and promoting democracy.

This could benefit Pakistan by around a billion euro a year, but would take time to negotiate.

An alternative, swifter solution would be to reduce trade tariffs levied on Pakistan for certain goods – or suspending tariffs altogether, which would require World Trade Organisation approval.

But one UK Government source said: “We expect some resistance from member states to these proposals. There is a challenging economic climate in Europe and some voices are resistant to opening up markets further to additional competition.”

Mr Cameron is also urging Italy to lift its block on completion of the biggest trade deal the EU has ever concluded, with South Korea.

The opening up of markets could be worth €416m a year to the UK, benefiting sectors including pharmaceuticals, high-tech machinery, creative industries and financial services.

But Italy is demanding last-minute changes, claiming the deal threatens its car industry because the sweeping agreement includes easier access to European markets for cars made in South Korea.

Mr Cameron’s spokesman said: “We shouldn’t let vested interests in certain sectors block progress on this kind of trade deal. At the moment there is no consensus on this issue and we will be pushing this hard tomorrow to make further progress on it.”

The main summit topic is supposed to be “relations with strategic partners” - a look at the EU’s role on the world stage.

The EU’s foreign affairs chief, Baroness Cathy Ashton will report to the leaders on the state of relations with China, Russia and America.

But the state of relations with a country closer to home – France – may sour the mood, thanks to growing tensions over the French policy of deporting Roma ethnic minority communities.

French President Nicolas Sarkozy is furious with the European Commission after Justice Commissioner Viviane Reding described the policy as a “disgrace” and called for legal action.

She said on Tuesday: “I personally have been appalled by a situation which gave the impression that people are being removed from a member state of the EU just because they belong to a certain ethnic minority. This is a situation I had thought Europe would not have to witness again after the Second World War.”

Yesterday her boss, Commission President Jose Manuel Barroso, tried to calm the rhetoric, saying he backed Mrs Reding but adding that “one or the other expression used in the heat of the moment may have given rise to misunderstandings: Vice-President Reding did not want to establish any parallels between what happened in World War Two and the present”.

Nevertheless he made clear that “Community law must be respected. The prohibition of discrimination based on racial and ethnic origin is one of the European Union’s fundamental principles”.

President Sarkozy is likely to use the summit to insist that France is breaking no laws and to attack the notion of the Commission berating a founding EU member state in public.