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GSP+ could boost Pakistan garment exports

Pakistan's garment manufacturers are anticipating significant trading benefits from an expected accession to the European Union's (EU) new Generalized Scheme of Preferences Plus (GSP+) trading scheme from January 2014.

Some are asking the Pakistan government to relax import duties blocking access to raw materials, especially artificial fibre, needed to diversify product lines so that they can take full advantage of the facility. These can be as high as 6.5 per cent and they also want Pakistan utilities to improve unreliable water and energy supplies so an increase in demand through GSP+ can be met.

Adil Butt, former chairman of the Pakistan Hosiery Manufacturers Association (PHMA), said the GSP+ status could reopen garment manufacturing units that currently were idle for lack of export orders. SM Tanveer, Chairman of the Punjab zone of the All Pakistan Textile Mills Association (APTMA), also wants the government to relax import policies blocking access to raw materials, such as artificial fibre that is in short supply within Pakistan, and needed for diversifying product lines.

Another former PHMA chairman and a leading knitwear exporter, M I Khurram, now head of an APTMA committee tasked with making recommendations on improving value-added textile exports, told media that GSP+ should make a difference. In 2012, Pakistan exported $654 million in knitted or crocheted apparel and accessories to the EU. Pakistan also exported $949 million in clothing that was not knitted or crocheted the same year. Meanwhile, Europe exported $2.5 million in apparel and clothing accessories that was not knitted or crocheted to Pakistan, and $2.8 million worth of apparel and clothing accessories that were not knitted or crocheted the same year, according to world trade data.