Withdrawal of GSP plus status by EU: PRGMEA urges PM, Adviser to help save ‘$3bn’ exports

LAHORE: Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) on Tuesday has appealed to the Prime Minister of Pakistan Imran Khan and Adviser to PM on Commerce and Investment Abdul Razak Dawood to play its role to save the $3 billion exports of Pakistan if the GSP plus status given by EU to Pakistan will be withdrawn.

Chief Coordinator PREGMEA Ijaz Khokhar while talking to Business Recorder said that they had requested Abdul Razak Dawood to arrange a meeting of the PREGMEA delegation with the Prime Minister Imran Khan and it is expected that a delegation of PREGMEA will meet Prime Minister after Eid-ul-Fitr and will brief him about the possible effects on Pakistan economy with the withdrawal the GSP facility which includes 11% decline in exports. He also said that unemployment will increase as well as tax revenue of both federal and provincial governments will decline. He also said that GSP plus status is the life line for Pakistan’s apparel sector which is a multi-fold sector.

Khokhar also said that PREGMEA has also constituted a think tank which has representation from Karachi, Lahore, Faisalabad and Sialkot will brief ambassadors of EU in Islamabad after Eid-ul-Fitr. Moreover, he said that as soon as flight operations were resumed which were halted due to COVID-19 a delegation of PREGMEA will go to Brussels and briefed the members of EU parliament also.

Chief Coordinator further said that Pakistan has $6 billion worth of exports to EU and almost $3 billion of them are of value added and apparel sector. If the GSP+ status is withdrawn, Pakistan’s textile exporters would have to pay tariff, making the industry uncompetitive compared to the regional exporters, or the exporters would have to reduce the selling price”, to keep their products attractive still to the buyers. He appealed to the government to increase the Drawback of Local Taxes and Levies (DLTL) by 5%.

He showed his apprehension that if EU withdraws the GSP plus status of Pakistan then Vietnam will be its major beneficiary as the European Union and Vietnam signed a FTA and an Investment Protection Agreement (IPA) on June 30, 2020, which entered into force from August 1, 2020. The pact has liberalized the majority of import duties imposed by the EU and Vietnam for goods originating from other countries.

Khokhar said that renowned international brands buyers have already started negotiations with sources in Vietnam to shift their orders from Pakistan.

In April 2021 the European Parliament has adopted a resolution calling for a review of the GSP+ status granted to Pakistan in view of an ‘alarming’ increase in the use of blasphemy accusations in the country as well as rising number of online and offline attacks on journalists and civil society organizations.

The resolution also calls on the Government of Pakistan to ‘unequivocally condemn’ incitement to violence and discrimination against religious minorities in the country, and expresses ‘deep concern’ at the prevailing anti-French sentiment in Pakistan.

Apparently referring to the recent violent protests by the banned Tehreek-i-Labbaik Pakistan (TLP), the resolution says: “The repeated and deceptive attacks against the French authorities by radical Pakistani groups and recent statements by the Government of Pakistan on the grounds of blasphemy have escalated since the response of the French authorities to the terrorist attack against a French school teacher for defending freedom of expression.”

The resolution says Pakistan has benefited from trade preferences under the GSP+ programme since 2014, while the economic benefits from this unilateral trade agreement for the country are ‘considerable’. However, the GSP+ status ‘comes with the obligation to ratify and implement 27 international conventions including commitments to guarantee human rights and religious freedom,’ it adds.

Earlier, In March last year, Pakistan’s GSP+ status was extended till 2022. As a result of this duty-free access available to Pakistan in 27 EU member states. EU is Pakistan’s second-largest trading partner next to the United States, as Pakistan has a huge potential market of 500 million customers for Pakistani products.

Copyright Business Recorder, 2021