Industry says EU tariff breaks to help increase exports

Exporters and businessmen welcome EU's move to grant trade concessions.

KARACHI: Exporters and businessmen have welcomed the European Union’s (EU) move to grant trade concessions to Pakistan’s exports to the EU for the next three years but said this process should continue and go beyond concessions.

The EU has granted trade concessions on 75 Pakistani imports to the EU in a bid to lend support to the flood-hit economy. Government officials also say that efforts should remain continue for achieving an increase in export items for tariff breaks and duty reduction.

“The EU has made a good move to support Pakistan’s economy. However, this is just the beginning and we need to go a long way,” Mohibullah Shah, the outgoing CEO of the Trade Development Authority of Pakistan (TDAP) told The Express Tribune.

The EU expects the trade concessions will increase Pakistan’s annual exports to the bloc by around €100 million ($140 million). The EU is Pakistan’s largest trading partner as 27 per cent of Islamabad’s exports go to the EU.

Since these concessions are for the next three years, Pakistan can increase exports to the EU by around $100 million in the first year, Shah explained, adding in the second and third years, Pakistan should boost exports by around $150 million each to achieve an overall increase of $400 million in three years.

Shah also expects that this is only the beginning of concessions and said the government should try to go beyond these. As soon as European importers and Pakistani exporters notice the tariff relief, trade will increase, especially in the second and third years, he added.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Sultan Chawla commented that the trade concessions are a welcome move, which came because of the government’s efforts.

“I hope that the government will step up efforts to win more duty reduction. Although it is less than what we expected, we welcome the move as a beginning which will help increase exports and employment,” he added.

“Pakistan requires the special treatment that her regional competitors enjoy,” he said.

Former president Sarhad Chamber of Commerce and Industry, Sharafat Ali Mubarak, said “exporters from our chamber are all excited because this will boost trade activities in the region. Now, many of our textile industries can expand their businesses and this will further increase employment opportunities.”

Javed Bilwani, Chairman Pakistan Apparel Forum which is an umbrella organisation representing around 14 value-added textile associations, said the government had given a list of around 200 items to the EU initially, but only 75 items were cleared.

“Since the list is still not public, one cannot say exactly by how much the concessions will help increase exports,” said Bilwani, adding apparels were on top of the list and home textile products were at second position in the list that Pakistan sent to the EU.

Published in The Express Tribune, October 8^th, 2010.