Pakistan exports over 17 per cent of the EU’s home textiles imports, which is more than Chinese home textile exports to the bloc. The home textile category is not part of the EU’s scheme.
The EU has offered to suspend tariffs on 75 types of Pakistani goods, which account for about 27 per cent of exports to the EU. The package will still require the approval of individual EU governments, the European Parliament and members of the World Trade Organization, some of which are India, Sri Lanka and Bangladesh and compete with Pakistan for textile sales in Europe.
“The home textile sector is conspicuous by its absence from the offer list,” said the ministry of commerce in what seemed a cautious initial response to the limited trade concession package aimed at helping Pakistan at a time when one-fifth of the country is submerged in floods, which have also affected one-tenth of the population. “The government of Pakistan strongly advocated the inclusion of this sector (home textile) in the offered package,” it said.
Official statistics show that Pakistan’s exports of home textiles to the EU was $1.1 billion in 2009 and represented 17.12 per cent of total EU home textile imports as compared to China’s 14.34 per cent, India’s 2.16 per cent, Sri Lanka’s 0.046 per cent and Bangladesh’s 3.57 per cent.
“The European Union excluded home textiles from the final offer probably due to the sensitivity of the items and getting consensus from all member states,” said Secretary for Commerce Zafar Mahmood. These items mainly include carpets, blankets, rugs, bed linens and bed spreads.
The final offer is also less than what the government had demanded in its list.
Pakistan’s submitted list to the EU included the whole range of textile items covered in the Generalized System of Preferences (GSP) plus, which is a tariff free package designed to help developing countries. The EU has indicated that it might move Pakistan to the GSP plus category after2014 provided the country improves its human, political and social rights record.
The list also included items that are not included in the GSP plus. The EU offer was not negotiated between the block and Pakistan. However, while finalising this package the EU did consider Pakistan’s preference for product lines, said the ministry for commerce.
Pakistan had earlier presented its case to the countries which had been concerned about the grant of tariff concessions to Pakistan. Foreign Minister Shah Mahmood Qureshi and Minister for Finance Dr Hafeez Shaikh had visited five EU countries on the eve of the EU foreign ministers’ meeting in Brussels held on September 11, 2010.
The ministry of commerce said that the impact on the excluded value added sectors, especially on the home textiles sector, needs to be evaluated carefully as the duty free export of yarn and fabric may raise the input prices for these products. The ministry will evaluate its impact in consultation with stakeholders by holding a Trade Development Authority of Pakistan meeting in Karachi on October 14.
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