The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has said that the EU Trade Concessions Package announced for Pakistan has been severely politicised during the recent EU Parliament meeting and it seems that the package will either be further diluted or scrapped altogether.
PRGEMEA Central Chairman Shehzad Salim underlined that according to his sources, a compromise package is being redrafted under which the number of items under quota have been increased from 20 to 26 with a quota ceiling of 120 per cent of past trade based on 2007-09.
Furthermore, on the remaining balance 49 items a ceiling has been proposed based on 130 per cent of past trade of 2007-09.
Therefore, in essence, all 75 items will be under quota. It is expected that the package will now be implemented from second half of 2012 till the end of 2013, which will further retard our efforts to boost exports.
The package is being redrafted because of objections by Spain and Portugal and now Germany has also started opposing this package due to the recessionary fears in Europe. Salim further added that if this packages fails implementation it will have severe detrimental effect on Pakistan’s bid for GSP Plus which is going to start from January 1, 2014. This is very dangerous development for Pakistan and our textile industry and we can expect further drop in our exports if this packages does not go through.
Besides, the EU offered this one-time facility to Pakistan and approached WTO in October 2010 to seek a waiver on trade preferences to Islamabad on these products amounting to almost 900 million euros in import value, or 27 per cent of imports from Pakistan for a two-year period from January 2012 to December 2013.
The EU package materialised following humanitarian appeals from the United Nations. The UN estimates the floods affected some 20 million people and 20 per cent of Pakistan’s land area, about 160,000 square km, with 12 million people need urgent assistance.
However, countries like India, Brazil and Bangladesh and textile lobbies within the EU had blocked the implementation of the preferential package originally scheduled to be effective from January 2011.
To get the package approved through WTO, a well-placed source in the commerce ministry told Pakistan Today that a revised document after consulting all the member countries was submitted to the WTO secretariat on January 20, 2012.
As a result, all opposing countries dropped their objections following the amendments made by the EU in the original documents by introducing tariff rate quotas (TRQs) on 20 products rather than full liberalisation. The EU estimates the preferences would increase Pakistan’s exports by 100 million euros. At the same time, the EU was planning to drop high tariff on ethanol from Pakistan subject to an annual quota of 100,000 tons.
