Daily Times

The extension of the Generalised System of Preference-Plus (GSP-Plus) by the International Trade Committee of the European Union (EU) Parliament for Pakistan is a sign of trust of the EU in Pakistan. The two-year extension will provide much-needed uplift to the economy. The facility provided access to Pakistani exports to the European markets through preferential duties. Since the grant of GSP-Plus facility to Pakistan in January 2014, the economy has registered a visible upward trend, though still far away from the full utilisation of our potential as Pakistan’s exports to the European markets have increased from 4.538 billion euros in 2013 to 7.492 billion euros in 2019, registering an increase of 65pc. Still there is a huge potential that has yet to be tapped by local exporters. So far, the dominating sectors availing the GSP-Plus are textile and garments, whereas sectors like leather and leather articles, footwear, plastics, ethanol, fresh and processed fruits, etc, have yet to show their marks. The duty-free facility has given Pakistani exporters an edge in the EU market over their counterparts such as India, Turkey, Vietnam and China. It grants full removal of tariffs on over 66 per cent of product categories for exports to the EU. The exports of textile and leather products also posted growth during the past few months mainly because of rising sales to the EU.

The GSP-Plus will continue as long as the country adheres to its 27 core terms. One thing, however, which our exporting sector needs to realise is that the scheme is a ‘Special Incentive Arrangement for Sustainable Development and Good Governance’. The concession is a chance to the beneficiary country to have easy access to the EU market with an inclusive approach. In turn, the country has to work for sustainable development and good governance regarding human rights, labour rights, environment, narcotics control and corruption. Countries like India and China have graduated out of GSP-Plus while Bangladesh has shown an amazing progress under its umbrella. So, the extension of GSP-Plus should be taken as an opportunity to reach excellence and be prepared for the competitive market. Since the grant of the facility, Pakistan has not registered any significant increase in export figures. Pre-GSP-Plus era (2008-2013) had more exports than those in the concessionary regime. Our policymakers need to revisit their plans to make the most of GSP-Plus. *