The European Union (EU) is all set to extend Generalized System of Preferences plus (GSP+) status for Pakistan after completing codal formalities, well informed sources in Commerce Ministry told Business Recorder.
Pakistan's political leadership led by Prime Minister Imran Khan, Foreign Minister Shah Mehmood Quesrhi, Prime Minister Advisor on Commerce, Industries and Production, Abdul Razak Dawood, Governor Punjab Ch Sarwar, Secretary Commerce Sardar Ahmed Nawaz Sukhera and Pakistan's embassy in Brussels played a vital role in lobbying with the EU member countries.
The sources said, growth in Pakistan's exports to EU countries in calendar year 2019 has been 9 per cent and cumulative growth in exports since the grant of GSP+ since 2014 has been around 65 per cent.
According to the World Bank, Pakistan's economic growth is expected to decelerate in 2019 and 2020, with a projected annual growth of around 3%. This follows a period of recovery in 2016-2018, which culminated in a 5.8% annual GDP growth in 2018. From 2008 to 2018, EU imports from Pakistan almost doubled from € 3.6 to € 6.8 billion. The growth of imports from Pakistan were particularly fast following the award of GSP+ to Pakistan in January 2014, with a 30% increase between 2014 and 2016. The growth of Pakistan exports to the EU have since slowed down, but the country continues to enjoy a trade surplus with the EU (€1.2 billion in 2018). The EU is Pakistan's first export destination absorbing over a third (34%) of Pakistan's total exports to the world in 2018, followed by the USA (16%), China (8%) and Afghanistan (5%). The EU is Pakistan's third largest source of imports, after China (23%) and the UAE (14%), accounting for around 9% of the total in 2018.
The GSP+ is the EU's trade preference programme for vulnerable developing countries. It grants full removal of tariffs on over 66 per cent of product categories for exports to the EU. The status is based on effective implementation of 27 international conventions on human and labour rights, environment protection and good governance.
The current GSP Regulation will expire on 31 December 2023. To allow businesses and beneficiaries to adapt to a new regulation, the Commission has already launched preparations for the new regulation. The new regulation will continue to pursue the same policy objectives of fostering sustainable economic, social and environmental development of beneficiary countries, including respect for good governance and human rights, with the primary goal of eradicating poverty. Public consultations will be undertaken in the first quarter of 2020.
The European Commission, in its biennial report 2018-19 on the Generalized Scheme of Preferences (GSP) has asserted that freedom of expression including in media is under threat in Pakistan. According to the report, the EU has serious concerns in some areas. For example, freedom of civil society to operate ('civil society space') is shrinking notably in Pakistan, including media freedom. Calls to start re-implementing existing capital punishment laws have become louder. Most beneficiaries face challenges when it comes to freedom of association.
While there has been progress in GSP+ beneficiaries' effective implementation of the 27 conventions, the EU also noted significant challenges during the 2017-2018 monitoring period.
The federal and provincial Treaty Implementation Cells (TICs) established in 2015 by the Government of Pakistan are dedicated mechanisms to oversee GSP+ implementation across the country. The Punjab has made important headway in monitoring and coordinating GSP+ implementation, while other TICs continue to have capacity challenges. The TIC in Punjab launched a web portal in September 2019, to inform comprehensively about Human Rights obligations in Pakistan and the progress made under GSP+. This is a significant first step towards implementation of the right to information.
However, EU maintains that National Accountability Bureau (NAB) is being widely criticised by the opposition for 'nabbing' the opposition parties only and going slow on cases against the Government. In fact, the majority of complaint investigations are towards opposition leaders. Very few cases of the ruling party Ministers and politicians have been pursued since the 2018 elections, which is considered to be a reflection of NAB's partiality. The leadership of the two main political parties as well as the second tier (former Ministers) are in prison mostly for interrogations. The opposition leader in the National Assembly and former Chief Minister of the Punjab province has also been in custody for charges against corruption and is on bail now. The opposition parties have expressed their intention to do away with the accountability laws once they come into power.
The sources said that the next review is in January 2022 and the scheme will continue till January 2024.
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