BRUSSELS (Reuters/AFP/APP) - The European Union pledged aid to Pakistan on Wednesday for hundreds of thousands of families displaced by Pakistan Army offensive on the Taliban and vowed to help Islamabad tackle the root causes of extremism but denied Pakistan the trade breaks it says will help it win the struggle. At a first EU-Pakistan summit, the EU executive said it would provide 20 million euros ($27.72 million) to help people from the Swat valley combat zone and would ask EU states to provide a further 45 million euros from a reserve fund. Senior officials promised to study future ways to boost commerce with the regime in Pakistan, with the ultimate aim of opening a free trade area. But a push by some EU states to offer Pakistan significant trade concessions was blocked by others concerned about the effect on their domestic industries. A joint EU-Pakistan statement showed that while the EU offered the prospect of a long-term free trade agreement, there would be no immediate trade incentives such as eliminating tariffs on Pakistani imports such as clothes and bed linen. We stand by the people of Pakistan, EU External Affairs Commissioner Benita Ferrero-Waldner told reporters. The leaders of EU and Pakistan discussed the strengthening of EU-Pakistan partnership, the regional political situation, global issues and the world economy. They agreed on substantial measures to strengthen their mutual engagement by initiating strategic dialogue on their common commitment to development, education, science and technology, security, counter-terrorism, strengthening of democracy, human rights and enhancement of trade. The leaders also reaffirmed their commitment to free trade and took note of the current state of the Doha Development Agenda negotiations. They committed to reach a rapid, ambitious, balanced and comprehensive conclusion of the Doha trade round building on progress made so far. Such an agreement would bring substantial gains to the world economy and, in particular, to developing countries. Addressing a joint Press conference along with President Asif Ali Zardari here, President of the European Commission Jose Manuel Barroso said, EU is ready to help Pakistan in this fight against extremism and terrorism and strengthening democracy in Pakistan. He said the European Union would provide 20 million Euros immediately for the rehabilitation of the displaced people of Swat and Malakand, adding that another 45 million euros would be provided in aid for Pakistan from the EU reserve fund. Appreciating the measures taken by Pakistan under the leadership of Zardari against extremism and terrorism, the EU President assured full support for the rehabilitation of Internally Displaced Persons (IDPs). He said, Pakistan government is committed to fight extremism and terrorism and to ensure the supremacy of democracy. The President said Pakistan was seeking help and support from the international community and thanked the EU and the world for their help and support to Pakistan in this hour of need, especially for millions of IDPs. He said the government, the army, the people and the nation were determined to fight the war. The EU is ready to help in many fields and we discussed ways to do it, Czech President Vaclav Klaus, whose country holds the EUs rotating presidency, said after the three-hour meeting. On the one hand, the issue of humanitarian aid; on the other the much more important forum of aid which is the opening of markets for Pakistan of European countries. I am looking for MoUs (memorandums of understanding), not IOUs, and I intend to get them, President Asif Ali Zardari said ahead of the meeting, saying trade concessions were more important than aid. Zardari remained upbeat despite the hazy nature of the pledges and said he was pleased with the support Pakistan was getting from Europe and elsewhere. I am an optimist at heart, not a pessimist, and I am always hopeful, Im a man who has walked from the gallows to the presidency, Zardari said after talks with Nato ambassadors. No relationship ... starts in one day, he told a news conference. The fact that there is a commitment and an appetite to help Pakistan, I am very satisfied with. I have great hopes and I am positive that we will have support for (the trade measures). All these are important issues. They will help democracy become stronger in Pakistan, he said. Earlier at Nato headquarters, Zardari had appealed for international help to fight the Taliban, who are also helping launch cross border attacks into Afghanistan, because, he added, he was certain that Pakistan would win the struggle against militancy with the help of the world but that it needed trade concessions more than aid. He also called for trade concessions to boost Pakistans economy, which some EU states are reluctant to agree to despite concern about the dangers to Europe posed by militants in Pakistan. With the help of the world we will win this, and half the war is the hearts and minds of the people, he said. He further said the battle against Taliban militancy in Pakistan had only just begun but the Army was determined and defeat is not an option for us. After addressing NATO ambassadors, Zardari said: Its a constructive dialogue. We are partners together. I intend to be partners with them. The EU committed to explore how Pakistan might benefit from its preferential tariff regime, which affords customs privileges in return for respecting principles in the areas of workers rights and the environment. European Commission President Jose Manuel Barroso said Islamabad needed measures to diversify exports and attract investment and Brussels would be very pragmatic in looking at options, including preferential access schemes. We are ready to work with Pakistani authorities to find some concrete ways ... to achieve a greater access to our market, he told the news conference. But he stressed that some steps needed backing of all members of the World Trade Organisation, which did not seem likely. We believe that what Pakistan needs now is short and medium-term measures to diversify its exports, he said. We are trying to find the most adequate measures. He conceded that any preferential steps would have to be accepted by all members of the World Trade Organisation and would be extremely difficult to push through. An EU diplomat said some EU states, including Britain and Sweden, wanted to offer Pakistan more than just the prospect of a free trade agreement that would take years to negotiate. A draft text circulated among EU trade officials last month proposed eliminating duties on imports of seven key textile and clothing products from Pakistan pending any free trade agreement, which could take up to 10 years to implement. Other countries, such as Italy and Spain, want to send a positive signal with this FTA, but secure in the knowledge that this will take so long to achieve there is no threat to their own industries in what is a time of economic crisis, the diplomat said. Annual trade between the EU and Pakistan is about 10 billion euros in imports and exports and trade flows between the two partners has grown by around 10 percent since 2003. Ahead of the summit, the European Commission announced that it would provide 65 million euros in new aid money to help people displaced from the Swat valley and other conflict zones. In exchange, we want Pakistan to take the fight against terrorism very seriously and that they do a lot on their home front, said EU External Relations Commissioner Benita Ferrero-Waldner. That means all the questions of good governance, on education ..., she told journalists at the summit. Then we will be excellent partners. APP adds: The European Union expressing satisfaction over the measures taken by Pakistan in fighting terrorism and extremism on Wednesday assured full support and cooperation to the democratic government of Pakistan. President Zardari said that Taliban are biggest threat not only to Pakistan but the whole world. Taliban are not only threat to Pakistan but the whole world. Taliban will always be a threat to the world, he told reporters after addressing the Nato Council. It is just that their hot bed is between Afghanistan and Pakistan, the President said. To a question about Natos apprehensions on action against Taliban in Pakistans north, he said it was the dictatorship that they had issues with and not the democratically elected government of Pakistan. On relations with India with particular reference to Kashmir issue, he said democracy could play a positive role in this regard and bring the two countries closer together. He said Kashmir issue is as old as the country and for its peaceful settlement, Pakistan will engage India in dialogue for its amicable resolution.