ISLAMABAD: The European Parliament has decided to extend existing GSP (Generalized System of Preferences) for another four years, i.e., till 2027.
However, European Council is expected to give its final approval for the extension of the current scheme soon.
“I am pleased to share that the EU MEPs have decided to roll over the rules on the GSP till 2027,” Caretaker Commerce Minister Gohar Ijaz said.
EU likely to extend GSP facility for another four years
According to sources, proposal for extension of four years in existing GSP had landed in European Parliament’s Committee on International Trade (INTA), which has also endorsed proposed extension in the existing scheme.
The International Trade Committee (INTA) of the European Union in its meeting has already voted on the extension of the current scheme of GSP.
The European Council defines EU’s overall political direction and priorities, traditionally by adopting conclusions. It does not negotiate or adopt EU laws.
Pakistan has done extensive lobbying for the new scheme besides making all efforts to comply with the 27 Conventions.
Pakistan is a major beneficiary of the trading opportunities offered by the EU GSP. From 1st January 2014, Pakistan benefited from generous tariff preferences (mostly zero duties on two thirds of all product categories) under the so-called GSP+ arrangement aiming to support sustainable development and good governance. In order to maintain GSP+, Pakistan has to keep ratification and effectively implement 27 core international conventions on human and labour rights, environmental protection, and good governance.
The EU- Pakistan bilateral trade stood at $ 14.857 billion, of which Pakistan’s exports were $9.865 billion in 2022 against $ 6.639 billion in 2021 whereas imports were at $ 5.392 billion as compared to $ 5.544 billion.
Pakistan’s main exports to EU are textile articles, sets, worn clothing, articles of apparel, knits or crocheted, cotton, beverages, spirits and vinegar, cereals, articles of leather, animal gut, harness, travel good, manmade staple fibers, toys, games, sports requisites, etc.
The EU continuously monitors GSP+ beneficiary countries’ effective implementation of the 27 international conventions on human rights, labour rights, environmental and climate protection, and good governance. This monitoring includes exchanges of information, dialogue and visits, and it involves various stakeholders, including civil society.
The Commission publishes a report on the implementation of GSP every two years, providing information on the progress made by the GSP+ beneficiary countries in implementing the 27 international conventions.
The caretaker Commerce Minister e has appreciated EU Parliament for living up to its commitment to facilitate trade from developing countries.
According to European Parliament official statement, MEPs extended the existing rules aimed at reducing or eliminating import duties on products entering the EU market from over 60 developing countries until 2027.
Parliament voted on Thursday with 561 in favour, 5 against and 2 abstentions to extend current rules on the scheme of generalised tariff preferences (GSP) after talks with the Council on the new rules were paused in June.
The draft report only amends the date of application of the regulation currently in place, extending it until 31 December 2027. The extension gives more time for the European Parliament and member states to agree on the new rules.
The current GSP regulation was set to expire at the end of 2023, and the negotiations between the Parliament and the Council of member states took off in January 2023 to establish new rules. In June, talks were paused as the gap between the position of the Parliament and member states could not be bridged, and as a result, the current rules were prolonged.
“By dealing swiftly and efficiently with this prolongation and rollover, the Parliament underlines that it will not let beneficiaries down,” said the EP during the plenary on Wednesday. “The 2012 regulation expires at the end of this year, thus it was necessary to prolong its validity in order to avoid significant socio-economic disruptions for the beneficiary countries and as well for the companies,” she added. “However, this rollover is an unfortunate consequence of not being able to reach an agreement between the Council and Parliament on the ongoing review of the GSP regulation,” she said, adding that there are two outstanding issues: the link the Council wants between tariff preferences and the obligation of readmission, and safeguarding rice producers without creating excessive trade barriers. On the first issue, Hautala said: “The European Parliament’s position is against the inclusion of this type of migration policy measures because this is a trade and development policy instrument, which benefits 2 billion people in the developing world.” She added: “The trilogues will continue, and it is vital to conclude them as soon as possible.
Now it is very important that the Parliament and the Spanish presidency go the extra mile and make this review a reality. This would require, however, a change in the approach by the Council on the question of readmissions. We need to preserve the GSP as a development tool,“ she added.
The Council is expected to give its final approval for the extension of the current rules soon. The Spanish presidency has pledged to push for continued talks between the Parliament and the Council to reach an agreement on the new rules, say the official statement.
Copyright Business Recorder, 2023
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