The European Parliament has voted to grant Pakistan exceptional autonomous trade preferences for two years, in the aftermath of the 2010 floods, but ringed around with conditions that might make the concession not worth the trouble taken to make it in the first place. At the same time, there are indications that the Indian challenge to the concession, made when it was originally proposed, though withdrawn from the WTO, is having an effect. The trade preferences, which will be in the form of either an exemption from import duties or tariff-rate quotas, concern 75 different product lines, mainly textiles and clothing. Members of the European Parliament voted that the preferences be not treated as a precedent. Considering that Pakistan has been asking for trade preferences from both the European Union and the USA as a compensation for the losses it has suffered for joining their war on terror, the caveat is significant. It is also significant that the preferences are not supposed to work too well. If they do, specifically if any product increases by 25 percent in any one year compared to the 2009-2011 average, that product will be removed from the scope of the regulation for that year. The preferences also allow intrusive EU inspections over human rights, ‘including core labour rights, democratic principles and the rule of law.’The government needs to consider whether, while taking on all this baggage, it is pursuing the sort of policies that would enable these preferences to have the desired effect. To take just one example, can Pakistani industry, compete in Europe when its price advantage from lower tariffs is cancelled by electricity tariff increases at home. That would be a rhetorical question, because the import order will not be filled on time if there is any more of the crippling loadshedding that has already led to the closing down of so many factories.Another danger that Pakistan needs to be wary of is India. It resents this trade concession so much that it not only filed a complaint with the WTO itself, but also prepared Bangladesh to do so too. This complaint was only withdrawn after Pakistan gave India the Most Favoured Nation status. The government may preen itself on its close relations with India, but it should realise that it will not have anything comparable to offer India when next it strikes. The present government has as one of its slogans ‘trade not aid.’ However, it should realise that if it does not live up to it, no one else will.