GSP-Plus status: 5 key reservations of EU addressed, NA told

The government informed the National Assembly on Friday that five key reservations of the European Unions (EU) have been addressed after a series of fruitful meetings, and now it was optimistic that the GSP-Plus status to Pakistan would be extended.

Parliamentary Secretary for Textile Aliya Hamza Malik, while responding to a question by PPP MNA Naveed Qamar about addressing the reservations of the EU especially on labour and human rights issues, said: "We are very optimistic that we'll clear this review as we'd made first submission to the EU in May last." "They'd [EU] five reservations, which include labour and human rights and in October last, we submitted another report by addressing all their reservations. Then we'd bilateral meetings in Islamabad in December. Besides, we also briefed them during a meeting of WEF," she told.

"Our trade ambassadors to the EU also had one-to-one meetings with the concerned authorities, besides, Danish and German ambassadors have also been briefed and they've given very positive response review has been presented at IR [international relations] committee and soon it will be presented in the EU Parliament, so we're hopeful to make it through," Malik declared.

In a written reply, the minister for commerce said that Pakistani products had duty free access in all 28-member states of the EU since 1st January 2014, on almost 91 percent of the tariff lines. This duty-free access is available under the EU's "Special Incentive Arrangement for Good Governance and Sustainable Development", which is also popularly known as GSP+. As a result of this arrangement, Pakistan's total trade to EU has increased from 11,960.59 million US$ in 2013-2014 to 14,158.29 million US$ in 2018-2019. "This arrangement has helped Pakistani products to compete successfully with similar products originating from other competing countries such as China, India, Bangladesh, Turkey and Vietnam, etc," he added.

The commerce minister said that due to GSP+, Pakistan has similar access in EU as Bangladesh, Vietnam, Turkey and better market access than India and China, adding export of articles of apparel, bed linen and toilet linen, surgical goods, etc have seen tremendous growth since Pakistan got the GSP+ status. The minister said that continuous efforts were being made to retain the GSP plus status, and so far two successful biennial reviews concerning Pakistan's compliance to the implementation of the 27 UN Conventions had been conducted, while the third biennial review was in process. To ensure the effective implementation of the 27 UN conventions, he added, the commerce ministry had set up a "treaty implementation cell" to coordinate with all stakeholders at the federal and provincial levels. The treaty implementation cell has proved to be a highly effective mechanism for building consensus and assigning responsibilities among different stakeholders, he added.

For overall promotion of exports, the commercial counselors in various countries effectively engage with all the concerned stakeholders to arrange incoming and outgoing trade delegations to promote Pakistani products under the banner of "Emerging Pakistan" initiative, and in collaboration with the TDAP Pakistani exporters participate in various trade fairs throughout the year. The TDAP facilitated the participation of exporters in SIAL Paris, International Foods Exhibition (October 2019) in Paris, that was mainly related to rice, spices and juices. To introduce Pakistani mangoes in the foreign markets, mango festivals were organized in different countries. Different varieties of Pakistani mangoes were displayed there.

The National Assembly was also informed that the current account deficit as per latest available data (Jul-Dec FY20) is at US$2.2 billion - 0.8 percent of GDP - compared to US$8.6 billion - 3.0 percent of GDP - in the corresponding period last year.

In a written reply, the minister for revenue and finance said that following were details of current account deficit July to December:

Current Account Balance: -2,153 (FY20), -8,614 (FY19), Balance on Trade in Goods: -9,818 (FY20), -16,201 (FY19), Balance on Trade in Services: -1,795 (FY20), -2,176 (FY19), Balance on Primary Income: -3,119 (FY20), -2,643 (FY19), Balance on Secondary Income: 12,579 (FY20), 12,406 (FY19), Current Account % of GDP: -0.8 (FY20), -3.0 (FY19).

"The current account surplus is not always desirable, as the ultimate objective is to maintain a level that is both sustainable and contributes positively to economic growth," he added.

Parliamentary Secretary Malik said that the government was fully committed to the revival and promotion of industrial sector including small and medium enterprises. Replying to a question, she said in this regard various incentives in customs and import duties had been provided to manufactures/SMEs. She said that in budget for FY 2019-2020, custom duty on 1,639 industrial raw materials/inputs had been reduced to zero percent. In addition to these other raw materials and intermediary goods required by the manufacturing sector including SMEs were subject to lowest tariff slabs three percent and 11 percent, respectively.

About suspension of trade with India in wake of Pulwama attack, she said that all kind of trade except import of medicines and surgical equipments have been suspended with the neighbouring country.

To a question, the minister for planning, development and special initiatives, in a written reply said that Chinese companies had not given any loans to Pakistan. However, Chinese government has provided loan for the Thakot-Havelian Road project (KKH-II), M-5 Motorway Multan-Sukkur Section, Optical Fiber (Khunjrab-Rawalpindi), Orange Line Metro Train Project, and Eastbay Expressway Road Project. He said that three kinds of loan modes, government concessional loans, preferential buyer credit, and buyer credit had been used for the execution of the CPEC projects. He said Eastbay Expressway project worth US$179 million was an interest-free loan. The composite interest rate of all the CPEC loans is approximately 2.4 percent, he said, adding the loans are for a 20-year period with grace period of five to seven years.