Trade incentives: GSP Plus gives sharp boost to textile exports

Shipments surge 31% in first two months after winning duty concessions.

Shahbaz Rana June 23, 2014


Pakistan has started enjoying fruits of duty-free access to European markets as textile garment exports grew almost 31% in the first two months after the trade preference scheme came into force, according to official statistics released here on Monday.

“Exports from Pakistan to the European Union in the first two months (January-February) of implementation of the Generalised Scheme of Preferences (GSP) Plus have recorded a substantial increase over the comparative period of previous year,” said the Ministry of Commerce.

According to sector-wise analysis, exports of textile garments grew significantly by 30.68% against last year’s shipments in January and February. Total sales of textile garments to the EU in the two months last year stood at $342 million, which grew to $446.91 million this year, recording an increase of $105 million or 30.7%, said the ministry.

From January this year, the EU granted duty-free access to Pakistan for a period of 10 years, but its continuation is subject to periodical reviews that will determine whether Pakistan is making progress on over two dozen conventions of the United Nations pertaining to human, labour and gender rights and freedom of expression.

According to estimates, the GSP Plus will result in almost 20% of Pakistan’s exports entering the EU market at zero tariff and 70% at preferential tariff rates. This status will enable exporters to boost overseas sales by more than $1 billion.

Only the textile industry would earn profits of more than Rs1 trillion per year, according to the Ministry of Commerce.

The trade concessions will benefit the country’s largest manufacturer and exporter, the textile and clothing industry, the most by enabling it to compete with products of regional rivals like Bangladesh and Sri Lanka, which already have duty-free access to the 28-nation EU bloc.

The Ministry of Commerce said exports of home textiles to the EU in January-February 2013 amounted to $214.18 million, which rose to $274.47 million in the same period this year, showing an increase of 28.15%.

Leather and carpet manufacturers were also successful in making a strong mark as they enhanced their share in the European market after the grant of GSP Plus with shipments increasing 15.20% and 12.79% respectively during January and February 2014.

The leather sector exported goods worth $25.46 million this year, up from $22.10 million in the corresponding period of previous year.

The carpet sector fetched $9.88 million in overseas sales in the first two months of this year compared to $8.76 million last year.

Claiming credit for the efforts made by the previous Pakistan Peoples Party (PPP) government, Commerce Minister Khurram Dastgir said fruits of the successful economic diplomacy of the present government had become visible and economic indicators had started to show a positive trend.

He was of the view that numerous opportunities were emerging following trade negotiations with different countries and trading blocs and the government was encouraging the exporters to make the best use of them.

He said the government was working hard to enhance Pakistan’s exports to the EU in the non-traditional sector as well.

Published in The Express Tribune, June 24th, 2014.

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