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Asia Program Asia Program

August 26, 2011

Summary: Despite widespread acknowledgement that a longterm partnership between Pakistan and the European Union is desirable, neither Islamabad nor Brussels has invested enough in engaging one another. Both parties have compelling commercial, security, and diplomatic reasons to deepen and broaden their relations, but, despite a series of summits, each has emerged disappointed with the others capacity to deliver, including on trade issues that form the backbone of the relationship. Although policy coordination remains a challenge, Europe has key assets that it can leverage, including its reputation for supporting civil society groups, development initiatives, and democratic institutions. As Pakistan struggles, the EU can become an important niche player, prioritizing its soft power capacities to help a country in transition modernize and reform its economy, consolidate political institutions, and strengthen the rule of law.

Moving EU-Pakistan Relations Beyond Words

by Shada Islam

In terms of rhetoric, the advancement of relations between Pakistan and the European Union appears impressive. Recent statements on Pakistan by EU foreign ministers underline efforts to build a strong long-term partnership and indicate full European support for democracy in the country. Pakistani leaders, including Prime Minister Yusuf Raza Gilani, have started to talk hopefully about forging a strategic relationship with Brussels. But for all the wordy communiqus and press statements issued after EU-Pakistan meetings, referring to common values and the wide range of areas where the two sides intend on cooperating, the EUs relationship with Pakistan remains lackluster and uninspiring. With the exception of Britain, EU member states have yet to fully acknowledge Pakistans strategic importance and seek approaches to its complex mix of security, governance, and economic challenges. Most EU governments still view Pakistan as a sideshow to their military involvement in Afghanistan, an approach that naturally disappoints Islamabad. European policymakers betray a poor understanding of Pakistans regional significance and the intricacies of the battles within Islam being played out in Pakistan on a regular basis between Wahhabism and Sufism, Shias and Sunnis,

modernists and conservatives, with important repercussions across the Muslim world. The absence of significant European military support could be offset by strong economic ties the EU is Pakistans largest trading partner but that has not yet translated into significant political influence. As a result, the EU continues to punch below its weight in Pakistan, remaining a marginal political player in the country with little leverage vis--vis Pakistans civilian leadership or its powerful military and security establishment. Pakistans outlook toward Europe also needs a shake-up. Focused on its volatile relationship with the United States, Pakistan has yet to concentrate its attention on the EU, which is seen as little more than a lucrative market for Pakistani exports. Europes emergency aid efforts following the 2010 floods were certainly welcomed, but Pakistani policymakers appear too focused on Washington to fully appreciate what Europe can offer in order to advance economic and political reform. Ironically, although Islamabad is envious of the muchwider scope and content of EU-India relations, Pakistan and India broadly share the view of Europe as an economic superpower but a political dwarf.

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A Promising Partnership The absence of stronger engagement between Pakistan and the European Union is unfortunate. A fractured or incapacitated Pakistan is a threat to European security interests. Stability in Afghanistan and peace in South Asia are conditional on efforts to curb the power and influence of militant extremist groups in the country. A stronger EU effort to stabilize Pakistan will do much to determine Europes credibility as an international security actor, enhance its visibility and image in Asia, and exercise its ability to leverage its non-military soft power tools such as aid, trade, and diplomacy. Finally, an EU failure to respond effectively and rapidly to important U.S. concerns about Pakistan will negatively impact efforts to craft a stronger transatlantic security dialogue. Pakistan also has an interest in deepening and widening ties with Europe. Although the United States will remain the dominant foreign player in Pakistan, and China is seen experience of encouraging governance reform, promoting civil society, and spearheading economic modernization in Central and Eastern Europe, has much to offer Islamabads embattled civilian leaders in these areas. There is some cause for optimism. Encouraged by Washington to upgrade relations with Islamabad, senior EU officials have held two summit meetings with Pakistani leaders, with a third high-level encounter being planned for next year. In a bid to set relations on a new trajectory, senior officials in Brussels are also hoping to organize an early meeting between EU High Representative Catherine Ashton and Hina Rabbani Khar, Pakistans new foreign minister. The EU has donated millions of euros in humanitarian aid to Pakistans post-flood rebuilding effort. Funding, including grants from the European Investment Bank, will contribute a total of around 485 million to Pakistan between 2009 and 2013, and humanitarian assistance, including contributions from member states, is valued at 423 million. And, for the last few months, EU officials have made sincere efforts to secure World Trade Organization approval for unilateral tariff concessions to Pakistans textile exports. Maturation and Frustration The departure from the political scene of former President Pervez Musharraf in 2008 and the election of a democratic government in the country have put EU-Pakistan relations on a stronger footing. As the relationship has matured, however, so have expectations, and the EU language regarding Pakistan has become tougher over the years. The EU seeks to combine support for Pakistans civilian leaders with demands for better governance, fiscal reform, and tougher counter-terrorism measures. Pakistan, meanwhile, has used its high-level meetings with the EU to press for better market access. Each side has been disappointed with the others capacity to deliver. The first EU-Pakistan Summit held in Brussels on June 17, 2009 saw both sides promising to engage in a strategic dialogue as partners but the EU also warning that terrorism, extremism, and militancy represent serious threats to international peace and security and should be eliminated. The emphasis at the summit, in which Pakistani

The EU, with its experience of encouraging governance reform, promoting civil society, and spearheading economic modernization in Central and Eastern Europe, has much to offer Islamabads embattled civilian leaders in these areas
as the countrys all-weather friend, Islamabads failure to cultivate closer relations with Europe has meant it gets a less sympathetic hearing on crucial trade questions (including tariff concessions), is not consulted regularly on regional issues such as Afghanistan, and is yet to be recognized like India and China as a strategic partner. The EU, with its

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President Asif Ali Zardari participated, was on working together on an integrated long-term strategy, including socio-economic development, civilian law enforcement structures, and the rule of law. The EU also stressed that it would help improve Pakistans counter-terrorism capabilities, notably in the fields of law enforcement, police reform, and criminal justice. The second summit, held in June 2010, was attended by Prime Minister Yousuf Raza Gilani and emphasized a partnership for peace and development, constituting a discussion of regional and global security issues, the respect for human rights, economic and trade cooperation, the provision of humanitarian assistance, and cooperation to further strengthen Pakistans democratic government and institutions. The meeting promised that a five-year engagement plan outlining specific targets for joint action would be prepared and regular meetings would be organized between the Pakistani foreign minister and the EU high representative. However, the third summit -- in July 2011 -- saw evidence of Europes growing impatience with Pakistans civilian leaders. In a statement, the European Council warned that while Europe was ready to pursue cooperation in a number of areas, it awaited Pakistani reactions to its concerns on security, human rights, the protection of minorities, and freedom of religion and speech. It added: Without far-reaching structural, economic, and fiscal reforms, EU assistance cannot be fully effective. While such statements and declarations of intent make good headlines, they do not amount to a coherent, well-thoughtout strategic vision for the future. The EU complains that Islamabad has yet to come up with a credible blueprint for cooperation as promised under the five-year engagement plan. Meanwhile, Pakistan believes that Brussels is not doing enough even in the trade sector, the backbone of EU-Pakistan ties. The EU is Pakistans largest trading partner, with EU imports mainly of textiles and clothing currently valued at about 3.5 billion per year. But trade relations are uneasy: a spate of EU anti-dumping investigations, and the removal of Pakistan from the EUs special duty-free scheme for developing countries (GSP+) for not having signed certain labor rights conventions and failing to meet the regimes technical standards, coupled with Brussels reluctance to start negotiations on a free-trade agreement with Islamabad, have strained the relationship.

While statements and declarations of intent make good headlines, they do not amount to a coherent, well-thought-out strategic vision for the future
An EU proposal to grant unilateral tariff-free concessions to Pakistani exports following the 2010 floods is still stuck in the World Trade Organization, facing opposition from India, Thailand, and Bangladesh. A Way Forward for Europe One reason for the EUs failure to forge a strong partnership with Pakistan is the lack of policy coordination and coherence between the EU and its member states. A common European policy also requires intense and sustained policy consultations among several EU departments including the new European External Action Service, headed by Ashton as well as European Commission directorates dealing with humanitarian operations, development policy, trade, budgetary affairs, and climate change. Proposals from the EU trade directorate to grant Pakistan unilateral tariff concessions, for example, ran into strong opposition from European textile manufacturers, the Commission directorate for industry, and EU member states such as Portugal, Poland, and Italy. For its part, the EU argues that regulatory barriers continue to hold Pakistan back from developing its full trade potential. The high costs of doing business, complex regulations, trade regimes, and infrastructure bottlenecks all have detrimental effects on trade and growth, according to EU officials. Nevertheless, Europe has key assets that it can leverage in Pakistan. European countries are regarded by many in Pakistan with much less hostility than the United States, whose reputation has been tarnished by public outrage at U.S. drone attacks in the tribal areas, Washingtons relationship with the army, and the Raymond Davis affair, among other developments. The EU has also built its

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credibility among Pakistans political elite including lawyers, human rights activists, and pro-democracy groups by focusing on the need to hold free and fair elections, insisting on the independence of the judiciary, and supporting stronger civilian institutions. Europe is therefore well-placed to help strengthen Pakistans increasingly dynamic civil society groups by ensuring media independence and supporting human rights advocacy groups, including those working to protect women, children, and marginalized communities. The Pakistani government also needs advice on crafting a new counter-terrorism strategy that strives to combat extremism through development.The EU should also continue to explore ways to support fledgling democratic institutions, with a particular focus on institution building, legislative reform, and voter participation. The EU does not have the United States clout when dealing with Pakistan. However, Europe can be an important niche player. Building a stronger EU-Pakistan relationship requires a more ambitious, overarching blueprint, and closer coordination with the United States and other donors. The EU must also be more innovative in building an agenda for engagement, prioritizing its soft power capacities to help a country in transition modernize and reform its economy, consolidate political institutions, and strengthen the rule of law. Without such a switch in emphasis, EU-Pakistan relations will remain entangled in strong rhetoric, with little hope of achieving real results.

About the Author

Shada Islam is head of the Asia Programme at Friends of Europe and writes extensively on EU-Asia relations.

About GMFs Asia Program

The German Marshall Funds Asia Program addresses the implications of Asias rise for the Westin particular, how Asias resurgence will impact the foreign policy, economic, and domestic challenges and choices facing the transatlantic alliesthrough a combination of convening, writing, strategic grants, study tours, fellowships, partnerships with other GMF programs, and partnerships with other institutions. Led by Senior Fellow for Asia Daniel Twining and Transatlantic Fellow Andrew Small, the programs initiatives include the Stockholm China Forum and India Forum, seminars and other activities in Japan, a Japanese fellowship program, Asia-related panels at GMFs flagship events at Brussels and Halifax, and a paper series on transatlantic approaches to wider Asia and on deepening cooperation between democratic Asia and the West. For more information see

About GMF
The German Marshall Fund of the United States (GMF) is a nonpartisan American public policy and grantmaking institution dedicated to promoting better understanding and cooperation between North America and Europe on transatlantic and global issues. GMF does this by supporting individuals and institutions working in the transatlantic sphere, by convening leaders and members of the policy and business communities, by contributing research and analysis on transatlantic topics, and by providing exchange opportunities to foster renewed commitment to the transatlantic relationship. In addition, GMF supports a number of initiatives to strengthen democracies. Founded in 1972 through a gift from Germany as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters in Washington, DC, GMF has six offices in Europe: Berlin, Paris, Brussels, Belgrade, Ankara, and Bucharest. GMF also has smaller representations in Bratislava, Turin, and Stockholm.