European Union granted GSP-Plus status to Pakistan
European Union has granted GSP-Plus status to Pakistan. This move has given exporters a duty free access to 27 European Countries.
The European Union on 12 December 2013 granted GSP-Plus status to Pakistan. This move will boost the textile and other industries of Pakistan as it has given exporters a duty free access to 27 European Countries.
406 members of the European Parliament supported the move of the Union at a session in Brussels. Under this deal 75 Pakistani products would have duty-free access to European markets.
The Prime Minister Nawaz Sharif government’s top priority was to gain an access into the European market as part of its economic agenda. As this status will enable Pakistan to export products of 1 billion dollars to international markets and help the textile industry of the country to earn profits of more than 1 trillion rupees. Overall, the increase in the exports will also facilitate economic growth and generate millions of additional jobs.
As per the analysts, the trade concession to Pakistan from European Union will benefit the textile and clothing industry of the country and also enable its products to compete with the products of rivals like Bangladesh and Sri Lanka, the two countries that have duty-free access to the bloc markets of European Union.
At present the textile and clothing exports of Pakistan to the European Union constitutes of its total exports to the bloc of 9.5 billion dollars. The GSP-Plus status will provide duty free or preferential duty rate access for total 3500 products to Pakistan. Currently, the Pakistani textile exports to European Union an 11 percent duty.
To get the status, Pakistan lobbied with several countries of the European Union. To get the deal done, it has held the death penalty.
About GSP-Plus status of European Union
The European Union’s GSP (Generalised Scheme of Preferences) allows developing country exporters to pay lower duties on their exports to the European Union. This gives them vital access to European Union markets and contributes to their economic growth. The reformed GSP, which will apply as from 2014, will further focus support on countries most in need.
The EU has adopted a reformed GSP law on 31 October 2012. In order to allow ample time for economic operators to adapt to the new scheme, the new preferences will be applied from 1 January 2014.
There are three main variants (arrangements) of the scheme
• The standard GSP scheme, which offers generous tariff reductions to developing countries. Practically, this means partial or entire removal of tariffs on two thirds of all product categories.
• The GSP+ enhanced preferences mean full removal of tariffs on essentially the same product categories as those covered by the general arrangement. These are granted to countries which ratify and implement international conventions relating to human and labour rights, environment and good governance
• Everything but Arms (EBA) scheme for least developed countries (LDCs), which grant duty-free quota-free access to all products, except for arms and ammunitions
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