ISLAMABAD: The Ministry of Commerce has convened a meeting of important industrialists on Thursday to formulate a strategy on how to derive the greatest benefit from the European Union’s (EU) waiver of approximately $ 900 million of tarrifs in 75 Pakistan product categories.
The Minister for Commerce, Makhdoom Amin Fahim, will chair the meeting on Thursday in Karachi. Meanwhile, Secretary Commerce Zafar Mehmood and newly appointed Chief Executive of Trade Development Authority of Pakistan, Tariq Iqbal Puri have also held informal talks deliberating on the EU trade concessions.
Officials, privy to the meeting, indicated that opinion was unanimous that the trade concessions granted by EU offered immense opportunities to Pakistan to increase as well as diversify the exports to 27- member strong trading bloc.
The foregoing of $ 900 million duties on 75 products for three years is regarded as a huge prospect for Pakistani firms to establish a strong foothold in Europe. These concessions, in fact will continue for the next six years, as Pakistan will be included in the GSP Plus from 2014.”Now it is up to business community to take benefit by investing in value added sector to make good on the chance which has been fielded to them for the next six years”, they said.
The Pakistani businesses were formerly exporting on 3 to 4 percent profit margin to EU but with the cessation of duties, their profit margin will likely increase substantially to approximately 8 to 10 percent. “This is an ideal investment opportunity in the value added sector”.
The subsequent meeting to be held with stakeholders in Karachi will discuss increased investment in the value added sector; six years of concessions is an ideal environment for investment, from both domestic and foreign sources. This will help increase employment generation as well as gender mainstreaming, as women will get fresh opportunities to work in garment sector.
The officials voiced their hopes that exports would definitely increase in the new environment, specifically citing the potential the baby garments category with the current tariff level of 8.3 percent while Pakistan’s exports were $ 0.89 million of the total market size of $ 2.26 billion. “If sufficient effort and resources are invested and Pakistan manages to tap at least 30 percent share, then the exports in this category alone can approximately rise to $ 300 million”.
