BRUSSELS, Jan 19: Luxembourg as current European Union president pledged on Wednesday to back Pakistan's demands for duty-free access to EU markets, following talks between the country's immigration minister Nicolas Schmit and Pakistan's Commerce Minister Humayun Akhtar Khan.

A statement released by the Luxembourg EU presidency said Schmit had "great understanding and sympathy for Pakistan's arguments. It is important that this country continues to benefit from preferential access to our markets within the framework of the generalized system of preferences (GSP).

The economic development of a country like Pakistan is essential for global stability and the prevention of terrorism." The official statement said talks between Mr Schmit and Mr Humayun had focused on the EU's future GSP system and its impact on Pakistan's exports to the 25 nation bloc.

Mr Humayun had explained that an EU decision to eliminate so-called GSP plus or zero-tariff concessions granted to Pakistan in 2002 would hurt the country's economy, the statement added.

"Our meeting was very positive," Mr Khan told Dawn, adding that he had also held talks with senior Italian, German, British and Polish representatives on the issue. "There appears to be a strong recognition in all these countries that political reasons exist to support Pakistan."

Luxembourg's backing is especially crucial as the country will be chairing all EU meetings at different levels over the next six months. An EU decision on the new GSP is expected this summer.

Poland has also emerged as a key EU player since it joined the EU in May last year and often sets the pace on policy issues for the other nine EU newcomers. Pakistan's key message - that upgraded access to EU markets is a crucial part of the fight against religious extremism and for economic development - is also expected to be reiterated by Prime Minister Shaukat Aziz in talks with the bloc's senior policymakers in Brussels next week.

The EU's new GSP proposals included "commercial inequities but the most compelling arguments in favour of Pakistan are political," Mr Khan said. The change in Islamabad's trade strategy, with its new focus on security issues, matches the EU's emphasis on the values of trade as a "soft" weapon in the fight against global terror.

The EU's new GSP, set to come in to force next January, will make Pakistan eligible once again for reduced tariffs on its exports to EU markets. But under proposals made by former EU trade chief Pascal Lamy earlier this year, Pakistani exporters are not expected to benefit from the more advantageous zero-duty version of the scheme known as "GSP plus."

The European Commission has said such GSP plus additional tariff benefits -- going down to zero duty - will now only be available for "vulnerable" countries which abide by labour, environmental and anti-corruption standards.

The commission proposals, however, must still be approved by EU governments, giving Pakistan and other developing countries time to lobby EU capitals for a change in rules.