‘GSP Plus status for Pakistan depends on implementation of past treaties’


Pakistan’s access to the GSP Plus status would depend upon Islamabad’s record of implementation of 27 international conventions relating to human rights, labour rights, environment and governance it had already signed and ratified. This was stated by Ambassador of European Union Delegation to Pakistan Lars-Gunnar Wigemark during a dialogue organised Thursday by the Karachi Chamber of Commerce and Industry (KCCI) and EU’s delegation here at a local hotel on “EU-Pakistan Trade: Opportunities for Growth”.
The event was attended among others by Lars-Gunnar Wigemark, along with Ambassador of EU countries in Islamabad, KCCI President Haroon Agar and Chairman Sindh Board of Investment Zubair Motiwala. In his speech, the ambassador apprised that EU was the largest trading partner of Pakistan with an annual trade volume of over 8 billion euro. EU maintains single trade, goods, services and currency. He articulated that on 23 January 2012 the EU Foreign Affairs Council, consisting of the Foreign Ministers of all 27 Member States in the European Union and chaired by the EU High Representative, Catherine Ashton, approved a joint EU-Pakistan 5 year Engagement Plan, including cooperation in a wide range of areas from trade to foreign and security policy.
In June, Lady Ashton visited Pakistan and launched a Strategic Dialogue with her counterpart Hina Rabbani Khar, Minister for Foreign Affairs. Just a few days ago, they met again in Brussels. On 15 November, the EU Autonomous Trade Preferences (ATPs) for Pakistan came into force as a response to the devastating floods that hit Pakistan in 2010 and 2011. Catastrophic flooding again struck northern Sindh and parts of Balochistan this year.
As a result of these special ATPs, certain goods from Pakistan can enter the EU duty free or will be subject to specific ceilings (tariff rate quotas). The measures would remain effective until 31 December 2013. On January 1, 2014 the EU’s new Generalised System of Preferences (GSP) regime would come into force. Pakistan is already benefitting from the existing GSP, but it is aspiring to obtain so-called GSP Plus status under this new regime.
If Pakistan qualifies for GSP Plus, which involves a number of strict conditions, it would be able to export most of its products to the EU duty free/quota free.
Major purpose to organizing EU-Pakistan trade dialogue event is to highlight the many success stories of EU-Pakistan trade relations and examine ways and means of diversifying and promoting our trade relations. The EU is spending 15 million euro on a unique trade diversification program to help support Pakistani companies gain access to EU markets.
Ambassador stated that in addition to the EU’s direct humanitarian assistance to the devastating flood that hit Pakistan in 2010 and again in 2011 and 2012, the European Parliament and the European Council approved special autonomous trade preferences for Pakistan on 25 October 2012. These measures enable the export of certain goods from Pakistan to enter the EU duty free of subject to specific ceilings (Tariff Rate Quotas). The Autonomous Trade Preferences (ATP) entered into force on 15 November 2012 and will be in place until 31 December 2013. The ATP regulation is legally binding instrument and is directly applicable in all EU Member States. 26 products have been offered under the Tariff Regulated Quotas (TRQs) while 49 items will be covered under the non-tariff regulated quotas. In total, 75 items have been granted duty-free market access under the concessions. Independent estimates suggest that, in particular, Pakistan’s Textile industry strands to benefit considerably from these measures offered unilaterally by the EU. The EU Pakistan’s largest trading partner, receiving 21.2% of Pakistan’s total export. The trade increased by almost 5% annually between 2007 and 2011 and the total volume now stands at over euro 8.3 billion annual (2011). Textiles and clothing account for almost 70% of Pakistan’s exports to the EU. Pakistan’s imports from the EU mainly comprise mechanical and electrical machinery as well as chemical and pharmaceutical products.
To broaden Pakistan’s export potential, which so far relies heavily on a single sector, Ambassador informed, the EU has launched a Trade Related Technical Assistance (TRTA) program. Through this unique program, the EU is spending a total of 15 million euro to support greater diversification of Pakistani trade with the EU. Several sectors have been targeted as especially promising for increased exports to the EU. The TRTA is also used to assist Pakistani companies to deal with the rigorous product standards for market access to the EU, including health standards.
Exchanging viewpoint, President KCCI Haroon Agar said Pakistan enjoyed GSP Plus from 2002 to 2005, but after expiry of that period, the EU did not renew this package and hence Pakistan’s trade was discriminated.
It is heartening to note that EU leaders are supportive of the proposal to accommodate Pakistan in the new GSP Plus initiative from 2014 onwards.
KCCI proposes that the Pakistani economic team discuss the game plan to ensure that Pakistan not only qualifies for the GSP Plus commencing from 2014, but also convinces SAARC countries to strive for a uniform and common strategy applicable to all SAARC countries. This would naturally benefit Pakistan, and provide the Pakistani exporters the momentum to compete with other competitors on an equal footing.
Chairman SBI, President Pakistan Afghanistan Joint Chamber of Commerce and Industry (PAJCCI) and former President KCCI Muhammad Zubair Motiwala expressed gratitude to EU to accord the EU Autonomous Trade Preferences (ATPs) for Pakistan as a response to the devastating floods hit to Pakistan.
He admired the initiative by EU’s new Generalised System of Preferences (GSP) plus to Pakistan. He was of the view that dialogue deficit between EU and Pakistan should be abridged and similar events on trade dialogues be arranged frequently. While exchanging views he said that Pakistan is acting as frontline state in the war against terror in the region and suffered colossal financial losses. He said that the terrorism in the region has worst affected the GDP growth of Pakistan and its economy.
Deteriorating law and order situation and energy crises has also brutally affected economic and commercial activities. The FDI has been declined from $5 billion to $1 billion. He urged that friendly countries of Pakistan, particularly European Union should reciprocate in terms of trade and technology transfer because trade is crucial to overcome current account deficit of about $3.5 billion.
He voiced that EU should understand the dynamics of Pakistan, majority of population is youth of age bracket 20-23 years who need employment. If Pakistan is granted market access, thousands of employment opportunities can be created for youth saving them not to fall in the hands of unscrupulous elements. To enhance trade energy is vital, in absence of energy, even trade access granted Pakistan would not be able to meet the orders. He urged EU for alike if not similar treatment as accorded to Bangladesh as prices of utilities are cheaper there as compared to Pakistan which make Pakistani exporters unviable and uncompetitive.
He hoped Government of Pakistan’s success in achieving GSP plus and urged out of box approach. He opined that KCCI can provide its proposal to Government of Pakistan accordingly. He was ambitious that $1 billion export means providing jobs to 100,000 people. He urged exploitation of Thar Coal to produce energy. Perception of Pakistan must be truly and positively depicted in the eyes of countries worldwide. Prosperous Pakistan is in the interest of the EU and well as the countries around the globe, he maintained.
The EU Delegation to Pakistan and EU Member States’ Belgian Ambassador Peter Claes, Czech Republic Ambassador Miroslav Krenek, Hungarian Ambassador Istvan Szabo, Romanian Ambassador Emilian Ion, Spanish Ambassador Javier Carbajosa Sanchez, Swedish Ambassador Lars-Hjalmar Wide, Deputy Head of EU Delegation to Pakistan Pierre Mayaudon and Consul General/Diplomats of Germany, France, Italy and Austria shared success stories of trade with Pakistan and companies of their respective countries successfully operating in Pakistan.
Former President KCCI Majyd Aziz, Senior Vice President Shamim Firpo, Vice President Nasir Mehmood and Managing Committee Members of KCCI also attended the mega event.