FPCCI urges govt to address EU concerns on GSP-plus regime

KARACHI: Pakistan may lose trade tariff concessions granted under the generalised scheme of preferences (GSP) plus status in the European Union (EU) if authorities fail to allay concerns regarding human and labour rights violation, a top industry official said on Saturday.

Anjum Nisar, president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said the country’s exports could not be able to avail the full benefits of tax incentives under GSP plus, “unless Pakistan addresses the key reservations”.

“Exports of Pakistan are not increasing to achieve desirable level,” he said. “Therefore, sustainable and continuation of GSP plus is dire need of Pakistan.”

Nisar said currently EU GSP plus raised five key reservations regarding human and labour rights issues, which need to be addressed for the continuation of GSP plus status. The country is the major beneficiary of GSP plus from EU, which is the second largest trading partner of Pakistan after US, and Pakistan has positive trade balance with the 27-member bloc.

GSP plus allows 20 percent of Pakistani exports to enter EU market at zero tariff and 70 percent at preferential rates and it is expected that Pakistan’s exports to the EU would increase by 20 percent or more during the next few years.

Pakistan got the GSP plus status in 2014 and since then the country’s export increased to $7.9 billion from $6.2 billion, but this increase was only in textile and clothing, while the exports of many other products like carpet, pharmaceutical, iron and steel, edible fruit, oil seed, copper, plastic and sugar declined as compared to pre-GSP plus period. The country got a two-year extension in its status in February 2018 and a new decision from EU parliament is around the corner.

Pakistan’s export to EU is mainly dominated by textiles and clothing, which account for 82 percent of total exports, and face tough competition with Bangladesh, Vietnam, Turkey, India, China and Sri Lanka.

Nisar underscored the need to diversify and promote value-addition in exports, including carpets, leather, furniture, plastics, sports goods and agriculture products to exploit the full potential of GSP plus.

An EU assessment report indicated that Pakistan’s export to EU heavily relies on one product, “which indicates a risky situation for Pakistan”, he added.

FPCCI president treaty implementation cell at the ministry of commerce is expected to ensure effective implementation of the 27 UN conventions imperative to maintain the GSP plus status.

Nisar urged the commerce ministry to take private sector particularly FPCCI on the board of treaty implementation cell for formulating mechanism and building consensus with the stakeholders in compliance of core international conventions, pertaining to social compliance, including human labour rights, environment and good governance.

“Commercial counselors of Pakistan designated to EU should also help the stakeholders in full utilisation of GSP plus status and marketing Pakistani products,” Nisar said. He underlined the need of enhancement of foreign investment in Pakistan from EU as Pakistan improved its ease of doing business and brought several reforms in business environment.