Monday , January 21 2019
Breaking News
Home / Breaking News / Pakistan gets GSP Plus status; exports likely to increase by $2b per annum
Pakistan gets GSP Plus status; exports likely to increase by $2b per annum

Pakistan gets GSP Plus status; exports likely to increase by $2b per annum

ISLAMABAD: Pakistan has obtained the status of Generalized System of Preference (GSP) plus from its largest trading partner of 27-member block of European Union which will become effective from January 1, 2014. This move will increase exports by $2 billion on per annum basis.

The European Parliament voted on a resolution objecting to the delegated act presented by the European Commission, granting GSP+ to ten countries including Pakistan.

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

GSP+ will become effective from January 1, 2014. The European Commission’s preliminary estimate is that exports from Pakistan will increase by Euro 574 million annually as a result of the reduction of tariffs on over 90 percent of all product categories exported by Pakistan to EU.

On this occasion the EU Ambassador to Pakistan, Lars-Gunnar Wigemark, said: “This is a very good day for 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+ will also promote economic growth and create much-needed jobs across Pakistan. EU consumers will benefit as well from cheaper imports made from 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. This will require improvements in the business climate in Pakistan, including access to energy.

While there is every reason to celebrate this milestone in 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.

Although it is the government at both federal and provincial level which is responsible for following up these obligations, the business community can play a significant role, for instance by ensuring labour rights, including employing more women in the workplace and making sure that there is no exploitation of child labour. Improving human rights, including labour standards, is a win-win situation for Pakistan and the EU.

The EU is Pakistan’s largest trading partner. In 2012 total EU-Pakistan trade amounted to Euro 8.2 billion. GSP+ will reduce tariffs to zero on over 90 per cent of all product categories being exported by Pakistan to the EU. The European Commission’s preliminary assessment is that Pakistani exports, including textiles but 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 USD 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.