PRGMEA urges to adopt aggressive marketing plan to enhance exports

LAHORE: Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) on Monday welcomed the European Union decision to retain Pakistan’s GSP plus status for another two years, and stressed for aggressive marketing to enhance exports to EU countries.

PRGMEA Chief Coordinator Ijaz Khokhar said, “The apparel sector appreciates the efforts of Advisor to Prime Minister on Commerce and Industry Razzak Dawood, Secretary Commerce Sardar Ahmad Nawaz Sukhera and the whole team of Commerce Ministry.”

The International Trade (INTA) Committee of EU Parliament has extended the GSP-Plus status for Pakistan, enabling the country to continue to enjoy preferential duties on exports for the next two years. While this facility has been available to Pakistan since January 2014, its continuation is an award for Pakistan’s progress in enacting new laws and developing new institutions for implantation of 27 core conventions of GSP-Plus, especially the National Action Plan for human rights.

Khokhar said Pakistan's exports to the EU have enhanced from 4.538 billion euro since the grant of GSP Plus in 2014 to 7.492 billion euro in 2019, registering an increase of 65 percent which was not so significant. “We could not take full advantage of the GSP plus benefit, primarily due to lack of solid marketing plan to improve our exports.”

PRGMEA coordinator said the renewal of GSP Plus status for another two years was a golden opportunity, which exporters could exploit to meet the export target.

The value-added textile sector has been the main driver of the economy for the last 50 years in terms of foreign currency earnings and jobs creation. There is no alternative industry or service sector other than textile that has the potential to benefit the economy with foreign currency earnings and new job creation.

“We have not made any marketing plan before and after granting of the GSP facility. We have no clear road map to increase our share under GSP facility available.” The PRGMEA chief coordinator said close consultation with stakeholders could help determine measures for ensuring viability and competitiveness in the international market.

He also stressed the need for enhancing the product lines of exports and for that purpose some incentives should also be announced by the government. “Currently the garment sector has a limited product line for export market due to non-availability of the latest fabric locally. Foreign buyers are demanding new garments based on G3, G4 and technical fabric material. We need to offer more diversified products to benefit from the GSP Plus,” Khokhar added.

Another key challenge, he said was the 17 percent sales tax on exporters, as “almost every exporters 45-60 percent cash liquidity is blocked due to this taxation, which is a major hurdle in exports growth”.

PRGMEA leader urged the prime minister to immediately restore zero-rating of sales tax to fully exploit the GSP Plus facility for the country. He also appealed to the PM to direct the Federal Board of Revenue to instantly release refunds “otherwise thousands of SMEs will close down, which will create an economic fiasco affecting all segments of the economy”.

He asked the government to identify textile as a key priority area, setting the right policies and incentives that encourages private sector investment in value-addition. Despite government assurances of clearing all pending claims, Khokhar said instead more and more refund claims were piling up. The government should announce a clear policy to finally clear all the pending refund claims, he demanded.