Pakistan's textile and clothing sector and its future in the European Union

A large number of the European community use bed-linen supplied by Pakistan. In 2005, the South Asian economy was the largest supplier of bed-linen to the union (Aziz, 2006). The European Union (EU) is Pakistan's largest trading partner, with textiles and clothing (T&C) accounting for almost two thirds of its sales to the union (EC's Delegation to Pakistan, 2004). As in many close relationships, however, the EU also is the cause of a lot of worry to its partner. One example was the imposition of a punitive import duty on Pakistani bed-linen in 2004, accusing exporters of dumping bed-linen below cost prices at the European market. It is believed by some that this move was actually in reaction to Pakistan's upgrading its commercial airfleet with US American Boeings rather than with European Airbuses. This paper takes a closer look is taken at the anatomy of and prospects for trade relations between Pakistan and the EU, focusing on the Textile and Clothing (T&C) sector.1 Features of both partners that have the potential to promote or constrain T&C exports from Pakistan to the EU are sketched. The focus is on EU's trade-related policies policy regarding Pakistan and the structure of Pakistan's T&C industry. An overview over the resulting exports to the common market is provided and possible scenarios for the future of the contested relationship and their likely consequences in terms of industrial and overall development are outlined. Finally, measures that support a healthy trade partnership between Pakistan and the EU in T&C are described.