Following the reduction of China’s share in the global textile and clothing trade coupled with the anticipated GSP Plus status for Pakistan by the EU in early 2014 Pakistan can earn an additional $700 million per year. Industry sources reveal Pakistan is working to get the Generalized System of Preferences (GSP) plus status by January, 2014 from EU which will allow textile products greater access to those markets. The sole purpose of GSP scheme is to help poor countries by making it easier for them to export their products to EU at reduced tariffs.
In FY13, textile contributed 53 per cent to Pakistan total exports of $24.6 billion. Textile sector will gain as EU is likely to grant GSP plus status to Pakistan. Currently, any importer in EU who imports Pakistani textile products has to pay 11 per cent duty, which makes Pakistani products costly.
The new GSP legislation has set enhanced monitoring of the conventions (every two instead of three years) and with scrutiny by the European Parliament. GSP plus offers preferences over and above the standard GSP by covering roughly 70 more lines mostly duty-free. Pakistan is currently eligible for the GSP plus status and most likely will get the status in January, 2014. Neighbouring countries like India, Bangladesh are holding GSP standard which offer partial reduction in tariff and Afghanistan has EBA status which allows it to export everything but arms absolutely duty-free and quota-free.
