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The Nation

Published Date: Dec 12, 2013

Pakistan secures GSP Plus status

Pakistan on Thursday succeeded to secure the long awaited duty-free
access to the European markets for four years, by winning Generalised
Scheme of Preferences (GSP) Plus status with an impressive count of
votes.
According to sources, 406 members of the European Parliament
expressed their support for Pakistan while 186 lawmakers voted against
the status at a session held in Brussels. The European Parliament
approved the Single Delegated Act under which 10 countries including
Pakistan are entitled to Generalised System of Preferences Plus (GSP
Plus) Scheme. The Act will come into force from January 1, 2014.
The
GSP Plus status will allow almost 20 per cent of Pakistani exports to
enter the EU market at zero tariff and 70 per cent at preferential rates
for four years till 2017. Experts said that under the scheme, Pakistan
can export most of its textile products to 27 EU nations at
concessionary duty rates or absolutely duty free, making Pakistani
products cheaper for European importers.
As per industry sources,
tariff lines covered under GSP plus are almost 6,000 which is 91% of
total tariff lines. It is expected that Pakistan will be allowed to get
benefit on almost 2,500 tariff lines out of which around 900 belong to
the textile sector. Previously, under GSP Plus status many different
products like surgical instruments, sports goods, ethanol, PET, plastics
and textile products were being exported to EU. However, in Pakistan’s
case, major charm lies in textile sector. Pakistan’s textile and
clothing exports to the EU currently constitute over half of the
country’s total exports to the bloc worth $9.5 billion.
They said
that as a result of the GSP Plus, the textile industry alone is expected
to earn profits up to one trillion rupees per year. Textile exports had
been declining in Pakistan, as manufacturers and exporters were finding
it hard to compete with Sri Lanka and Bangladesh who already had
duty-free access to European markets. This special status will provide
Pakistan duty free or preferential duty rate access on 3,500 products to
EU markets where currently Pak textile exports to the EU draw an 11%
duty.
The GSP Plus is granted to those countries that ratify and
implement international conventions relating to human and labour rights,
environment and good governance. The EU has been closely watching
Pakistan’s human rights record and also fiercely opposes the death
penalty.
Punjab Governor Chaudhry Sarwar, who is in Brussels for
lobbying on this move, termed GSP status as historic achievement as it
would help to boost economy of the country. Addressing telephonically to
the Pakistan business community, Ch Sarwar said it would provide
employment opportunities to about one million people of the country. He
said Pakistan can now export textile goods to European member countries
till 2017 without having to pay duties, adding that it would increase
exports worth $1 billion.
Foreign Office also confirmed that
European Parliament approved the Single Delegated Act under which 10
countries including Pakistan are entitled to GSP Plus Scheme. Foreign
Office Spokesperson in a statement that our embassies in the European
capitals, the Ministry of Commerce and Punjab governor have worked
incessantly to bring about the passage of the Act. “We are grateful to
the European Commission and member countries of the European Union for
their unstinting support at every step of the process and to the
European Parliament for the adoption of the Single Delegated Act,” the
Foreign Office added.
"Award of GSP-Plus status shows confidence of
the international markets in the excellent quality of Pakistani
products," Prime Minister Nawaz Sharif said in a statement. Gaining
access to European markets was the top priority of his government as
part of an economic development agenda, he said. The status will enable
Pakistan to export products worth over $1 billion to international
markets and the textile industry alone is expected to earn profits of
more than Rs1 trillion a year, the spokesman said.
President Mamnoon
Hussain said that EU’s GSP Plus Scheme would not only further strengthen
our trade relations with the member countries of the European Union but
would also help strengthening our economy through greater trade.
Addressing the concluding session of 3-day 16th Sustainable Development
Policy Institute Conference, Finance Minister Ishaq Dar said the EU has
granted status to Pakistan which would greatly help the country to boost
its export.