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       Mr Claude Cheysson, the Member of the Commission with
       responsibility for North-South relations, will make an official
       visit to Pakistan from 31 January to 1 February 1986.
       This will be the first visit by a Member of the Commission to a
       country which has had contractual links with the Community
       since 1976.
       During his visit, Mr Cheysson will have talks with President
       Mohemd Zia-Ul-Haq and the Prime Minister, Mr Mohammad Khan
       Junejo and also with Foreign Minister, Mr Sahabzada Yacub
       Wattoo, the Trade Minister, Mr Saleem Saifullah, and the
       President of the Senate, Mr Ghulam Ishaq Khan.
       The talks will cover bilateral relations between the Community
       and Pakistan, international economic questions and the
       situation in the region.
                                    - 2 -
       Pakistan is linked to the Community by a non-preferential
       Commercial Cooperation Agreement signed in 1976.  As a former
       member of the Commonwealth with traditional trading links with
       the United Kingdom, Pakistan was one of the countries covered
       by the Joint Declaration of Intent annexed to the Accession
       Treaty in which the Community undertook to seek solutions to
       the trading problems posed by the United Kingdom's accession to
       the Community.
       These institutional links were further developed recently when,
       in July 1985, a new agreement for commercial, economic and
       development cooperation - currently being examined by the
       authorities of both parties - was signed.
       Commercial Cooperation Agreement
       Following the conclusion of a commercial cooperation agreement
       between India and the Community in December 1973, the Council
       agreed in October 1974 to open negotiations with a view to the
       conclusion of a similar agreement with Pakistan.  This
       Agreement was concluded in June 1976 and took effect in July
       1976.  It is a non-preferential agreement under which each side
       accords the other most-favoured-nation treatment.
       A Joint Commission was set up under this Agreement charged with
       studying ways of overcoming trade barriers and promoting
       cooperation between the two parties with a view to developing
       and diversifying their trade.  The Joint Commission was also
       entrusted with supervising the proper functioning of the
       sectoral Agreements between the Community and Pakistan.  The
       Community also undertook to examine in the Joint Commission
       possible ways of increasing trade in basmati rice an cotton
       The Joint Commission has met regularly in Brussels and
       Islamabad.  It has launched a trade promotion programme under
       which the Community finances the participation of Pakistani
       exporters at trade fairs and on trade missions, the
       organization of seminars and workshops and access to experts
       and consultants in such sectors as leather working, sports
       goods, clothing and tobacco.  The Joint Commission has also
       looked into the use by Pakistan of the Community's generalized
       preferences system and the levels of voluntary restraint on
       sales of textiles as a result of the bilateral agreement
       concluded under the Multifibre Arrangement.
                                    - 3 -
       Agreement for commercial, economic and development cooperation
       In July 1985, a new cooperation Agreement was signed by the
       Community and Pakistan.  This Agreement is currently under
       examination by the relevant authorities of the two parties with
       a view to its ratification.  The new Agreement supplements the
       1976 Commercial Cooperation Agreement, adding two new areas of
       cooperation - economics and development - but also
       consolidating cooperation in the area of trade.
       Both parties intend to encourage industrial cooperation between
       business interests on their respective territories and the
       extension of bilateral arrangements for the promotion of
       investment.  They will also facilitate contacts and exchanges
       of information between enterprises and economic institutions
       and will promote joint research programmes in areas of mutual
       The Community will take all possible measures to intensify its
       financial and technical aid to Pakistan's development
       programmes and to promote cooperation between the developmental
       and financial institutions of both parties.  The Community will
       also seek to coordinate its own development cooperation
       activities and those of its Member States in Pakistan.
       Textiles Trade in textiles between the Community and Pakistan
       is  regulated by a bilateral Agreement negotiated in 1982 under
       the  third Multifibre Arrangement.  This agreement expires at
       the  end of 1986.  In return for an undertaking from the
       Community  to lift restrictions and not to introduce new ones
       under the  safeguard clauses of the GATT or the Multifibre
       Arrangement,  Pakistan agreed to restrict its exports of a
       certain number of  textile products to the levels laid down in
       the Agreement.
       Generalized system of preferences
       As a member of the Group of 77 developing countries, Pakistan
       enjoys preferential access under the Community's GSP.  It has
       been among the system's main users for some years and some 60 %
       of Pakistan's exports enter the Community duty-free.
                                    - 4 -
       Pakistan has been a major beneficiary under the Community's
       food aid programme since 1968.  Significant quantities of
       cereals (from 10.000 to 80 000 tonnes annually), butteroil
       (since 1973) and milk powder (since 1972) have been sent to
       Pakistan has been self-sufficient in cereals since 1981 and
       food aid since then has taken the form of butteroil and
       skimmed-milk powder.
       The above quantities do not include emergency food aid and
       assistance given by the Community to Afghan refugees in
       Pakistan.  These refugees (estimated to number 2,5 - 3 million)
       received 110 m ECU of Community aid between 1980 and 1985.
       Pakistan also received 54.1 during the period 1976-1984 under
       the Community's programme of technical and financial assistance
       to non-associated developing countries.  This assistance went
       to such projects as the Chasma irrigation project on the Indus
       in the Punjab.
       Lastly, Pakistan also benefits from the Community trade
       promotion programme mentioned above.
       Trade relations
       The Community is Pakistan's main trading partner, accounting in
       1984 for 19 % of its imports and 21 % of the Community's
       foreign trade.  Since the Community's enlargement in 1973,
       Pakistan's exports to the EEC have risen from 189 m ECU to
       about 671 m ECU in 1984; its imports from the Community have
       grown from 234 m ECU to about 1 471 m ECU over the same period.
       Pakistan's main exports to the Community are textiles and
       clothing while it imports mainly machinery and manufactures.
       Its main trading partners within the Community are the United
       Kingdom, Germany and France.
       Trade between the EEC and Pakistan     (million ECU)
                    1973  1976  1979  1980  1982  1983  1984  1985
                                                             10 months
       EEC imports   189   269   377   446   541   585   671   757
       EEC exports   234   503   806   893  1077  1307  1471  1335
       Balance        45   234   429   447   536   722   799   578
       Source : Eurostat       *    The Ecu-dollar rate of exchange fluctuates daily according
       as the various Community currencies which make up the ECU
       fluctuate against the dollar.  One ECU was worth $ 1.2 in
       1973, $1.37 in 1979, $1.39 in 1980, $0.98 in 1982,       $O.89
in 1983 and $ O.79 in 1984.

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