EU trade concession: Textile manufacturers see 30% export boost

Duty-free access can fetch an additional $700m in exports.

FAISALABAD: Textile exporters, while welcoming the European parliament’s approval of duty-free access for 75 Pakistani goods, have expressed the hope that the concession will help increase textile exports to the European Union by 30% and generate significant economic activity in the country.

Speaking to the media here on Monday, Pakistan Textile Exporters Association Chairman Rana Arif Touseef said Pakistan had been trying hard for duty-free access to the EU to enhance exports and this facility would be a good sign for the ailing value-added textile industry, especially for the struggling home textile manufacturers.

“Exports to the EU can surge by at least 30% to 40% or $700 million to $1 billion if we fully utilise our existing potential and capacity.”

He pointed out that the EU’s decision would help Pakistan build its capacity to become more effective and competitive in international economic relations, adding this would create opportunities in the domestic industry as well, leading to competitiveness, creation of jobs, exchange of technological knowhow and development of skills.

According to the industry, Pakistan’s exports of the selected 75 products to the EU stand at $1.4 billion, about 27% of the country’s total exports of $5.1 billion to the 27-nation bloc. The $1.4 billion worth of exports, under the current duty structure, indicate that the figure can be increased substantially in the duty-free mechanism.

Touseef, however, cautioned that much would depend on uninterrupted supply of gas and electricity to the manufacturing units.

“We are unlikely to capitalise on the EU’s preferential trade offer due to the severe energy crisis in the country. Textile exporters will not be able to benefit from the concession, unless the government takes serious measures to tackle the energy shortage.”

Sounding upbeat, he expected exports to go up significantly, provided utility services were ensured round the year. He also asked the government to lay the groundwork for winning Generalised System of Preferences (GSP) Plus status from the EU.

Published in The Express Tribune, September 25^th, 2012.