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The News

Published Date: Dec 13, 2013

Duty-free textile exports to 27 EU countries allowed till 2017

The
European Union has granted the much-awaited duty free market access
under the Generalized System of Preference (GSP)+ to Pakistan which will
enable Islamabad to export textile goods to 27 European countries till
2017.

"Yes, the EU has granted the GSP Plus to
Pakistan which will increase our exports by $2 billion per annum,"
Minister for Finance Ishaq Dar said while talking to reporters here on
Thursday.

According to a statement issued by the EU here,
the European Parliament voted on a resolution objecting to the delegated
act presented by the European Commission, granting GSP+ to 10
countries, including Pakistan.

The resolution was defeated
with 409 votes against and 182 in favour. In other words, an
overwhelming majority of members of the European Parliament supported
the granting of GSP+ status to Pakistan.

The GSP+ will
become effective from January 01, 2014. The European Commission’s
preliminary estimate is that exports from Pakistan will increase by Euro
574 million annually as a result of reduction of tariffs on over 90
percent of all product categories exported by Pakistan to the EU.

On
this occasion, the EU Ambassador to Pakistan, Lars-Gunnar Wigemark,
said: “This is a very good day for the EU-Pakistan relations. The
granting of GSP+ shows the importance the European Union attaches to its
relations with Pakistan. We have listened to Pakistan’s plea for more
trade and not just aid.”

In addition to expanding and
facilitating Pakistan’s trade with the European Union, GSP Plus will
also promote economic growth and create much-needed jobs across
Pakistan. The EU consumers will benefit as well from cheaper imports
made in Pakistan. "The textile industry is an obvious winner, but we
should work together to ensure that other sectors of Pakistan’s economy
will benefit too. It is now up to the Pakistani business community to
take full advantage of the opportunities offered. This will require
improvements in the business climate in Pakistan, including access to
energy," the EU ambassador said.

While there is every
reason to celebrate this milestone in the EU-Pakistan relations, the
GSP+ regime calls for Pakistan to fully implement its commitments under
27 international conventions on human rights, good governance, labour
and environmental standards.

The EU is Pakistan’s largest
trading partner. In 2012, the total EU-Pakistan trade amounted to Euros
8.2 billion. GSP+ will reduce tariffs to zero on over 90 percent of all
product categories being exported by Pakistan to the EU. The European
Commission’s preliminary assessment is that Pakistani exports, including
textiles, and also other products such as leather would increase by
Euro 574 million annually. The Pakistani textile industry estimates that
exports to the EU of textiles alone under GSP+ will increase by $650
million in the first year.

In 2012, the EU and Pakistan
adopted a five-year Engagement Plan and launched a Strategic Dialogue,
covering a wide range of issues from security, including
counter-terrorism, non-proliferation and regional cooperation, to human
rights, migration and development cooperation.

Our correspondents add: Prime Minister Nawaz Sharif congratulated the nation on the award of GSP Plus status to Pakistan.

"Award
of GSP Plus status shows confidence of the international markets on the
excellent quality of Pakistani products," the prime minister said.

He
said gaining access to the European markets was the top-most priority
of the government as part of the economic development agenda, which has
been achieved due to continuous and hard work of the ministers and
officials of the ministries of finance, commerce and foreign affairs and
friends of Pakistan in Europe.

"This status would enable
Pakistan to export more than $1 billion worth of products to the
international markets. Only the textile industry will earn profits of
more than Rs1 trillion per year," the premier observed.

Nawaz
said an increase in exports would resultantly facilitate the economic
growth and help in generation of millions of additional employments.

President
Mamnoon Hussain in a statement said that the EU’s GSP Plus status would
strengthen Pakistan’s trade relations with the member countries of the
European Union. "GSP Plus would also significantly help strengthen our
economy through greater trade, generation of economic opportunities and
creation of more jobs for our people," the president stated.

Finance Minister Ishaq Dar said the GSP Plus status will increase the country’s exports by at least $2 billion.

Addressing
the Sustainable Development Policy Institute’s annual Sustainable
Development Conference in Islamabad‚ he noted that a number of measures
had been taken to fix the economy and the trust of international
community on Pakistan was beginning to take roots.

The
minister said even while austerity measures were being taken to bring
down the deficit‚ the government had increased allocations for social
safety nets to protect the poor.

Punjab Chief Minister
Shahbaz Sharif said the grant of GSP+ was a good omen. He said the
facility of GSP+ would enhance exports of Pakistan and the national
economy would be strengthened due to an increase in trade activities.