Islamabad, December 13, 2013 (PPI-OT): Mr. Azhar Saeed Butt, Acting President of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in a statement welcomed the grant of Generalized Scheme of Preference (GSP+) by European Parliament. GSP plus provides the GSP facility to all products being imported in EU. He said that currently, there are 27 countries in EU and their aggregate import from Pakistan is about 6 billion dollars and exports to Pakistan are around 10 billion dollars.
Mr.Azhar Saeed Butt also applauds the efforts of consecutive government in Pakistan for achieving GSP Plus status. He said that EU remains Pakistan’s largest trading partner after USA; receives 25 percent of Pakistan’s exports and providing 10 percent of Pakistan’s imports. Overall trade volume between EU and Pakistan is US$10.9 billion with trade surplus of US$1.78 billion Pakistan’s favor.
Pakistan exported mainly textile and leather products to EU and imported mechanical and electrical machinery, chemical and pharmaceutical products. The bad governance, lack of quality assessment and infrastructure for quality exports, the potential of exports to EU is not optimized.
He informed that in the absence of GSP plus Pakistani exports have to pay extra duties from 3 % to 10 % (varies from product to product); consequently, products from Sri Lanka, Malaysia and Bangladesh become attractive for European buyers because of price difference. Now, after GSP Plus status Pakistani products will be available in EU markets at competitive prices. It leads the surge in demand of Pakistani products.
It is estimated that Pakistani textile exports to EU will increase by 1.0 to 1.5 billion dollar per annum. No doubt in the present context of shortage of foreign exchange reserves it provides a support to Pakistan economy. Moreover, it may support the value of Pakistani rupee. Another aspect of this facility is that the prime material of textile products is cotton. So, any synergy in textile sector will be trickled down to the cotton growing area.
It may helpful to reduce poverty to some extent. Those small unites of finished products (textile buying houses and garment producers) which have been shifted from Pakistan to Bangladesh and Malaysia may be returned back to Pakistan after this development.
Pakistan’s trade with the EU is mainly composed of textiles, which account for over 55% of the total Pakistani exports, followed by leather products. Pakistan’s export structure lies very much on a traditional product mix. The imports from the EU to Pakistan mainly comprise finished products like mechanical and electrical machinery, chemical and pharmaceuticals.
Mr.Azhar Saeed Butt further stated that the surge in the expected demand can be materialized only if production process will remain in process. The break in production process because of energy and gas shortage or law and order situation will not allow industry to increase its exportable production.
He also mentioned that during the visit of various delegations from EU Head of Unit, FPCCI emphasized the importance, scope and need of GSP+ plus for Pakistan. He also informed that during the EU visit of EU delegation to Federation House Karachi, the head of delegation told that Pakistan is 52nd EU trading partner with lot of potential and being 6th largest cotton country for this reason they negotiate with Pakistan.
The Business community of Pakistan hails and appreciates the government and congratulates the trade and industry of Pakistan.
For more information, contact:
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
B-1, Federation House, Main Clifton Road,
Tel: 0092-21-35873691, 93-94
Fax: +9221 3587 4332
Category: Chambers of Commerce