EU envoy cautiously optimistic on Pakistan’s GSP plus status

KARACHI: European Union (EU) will conclude its review on Pakistan’s standing in its 27 international conventions outlined under the trade preference facility by March this year, its envoy said on Wednesday, voicing a measured optimism on the country’s ability to retain the status.

“I am sure there will be some criticism… whether or not those criticisms lead to end decision for changing of the status, its unknown,” said Androulla Kaminara, EU ambassador to Pakistan at a meeting with Shahrukh Hasan, managing director of Jang Group.

“I don’t bet but I am optimistic… GSP will continue.”

The EU signed a law in late 2013 granting Pakistan Generalized Scheme of Preferences (GSP) Plus status, which allows firms to pay no taxes on certain categories of goods exported to the 27-nation bloc for 10 years.

The EU makes GSP-plus conditional on implementing international conventions on human and labour rights, environmental protection, and good governance.

The textile industry, making up more than 50 percent of the country's total overseas shipments, is biggest beneficiary of the agreement.

Before GSP-plus, textile exports faced customs tariffs of between 6.4 and 12 percent and leather goods and footwear up to six percent, the envoy said.

Kaminara said some progress had been made toward human rights by the government of Pakistan, such as the parliament’s approving transgender and maternity laws, but more needed to be done and there were ‘lows and highs’ in the country’s actions.

“We are talking about the future of the GSP plus … Right now no one can predict because we have new parliament, new members, and they are flexing their muscles,” the ambassador said. “New EU parliament sometimes takes extremer positions.”

The ambassador said, “The country is yet to implement all the 27 international conventions it has had ratified and signed and the implementation is necessary for the continuation of the facility”.

An EU delegation in October last year visited Pakistan and met with the government officials, business leaders, and media personnel.

The delegation sought answers to questions the EU had sent to all these stakeholders on enforcement of the agreed conventions.

The feedback is part of the final report to be issued in March 2020 that will decide the future of the GSP Plus status for Pakistan.

Kaminara said, “The report will be finalised by the end-January and go to the European parliament for review”.

“I can’t judge what will happen there … European parliament will request commission to develop a proposal [on] what to do on the basis of the report,” she added.

Trade officials estimate Pakistan had earned and benefited around $15 billion from GSP Plus since the start of the facility in 2013-14.