The Export Promotion Bureau (EPB) has asked the Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) to submit a working paper on the problems to be faced by the apparel sector in the post-quota era.
The paper will contain concessions and incentives the sector would need to overcome undue competition in exports to Europe after the withdrawal of GSP and to the US due to free trade agreements (FTAs) signed with some countries.
The decision was taken at a meeting the Pakistan Readymade Garments Manufacturers and Exporters Association held with EPB Chairman Tariq Ikram to discuss the performance of the garment sector during the post-quota period.
Prgmea Chairman Tahir Aziz told the EPB chief that the garment sector was going to be hit hard in the quota-free phase firstly, because of the withdrawal of GSP by the European Union (EU), resulting in 12 percent duty on exports to Europe and, secondly, due to high export prices as compared to countries, which signed the FTAs with the US like Bahrain.
He said that these countries would have duty-free access to the US market against Pakistan, which would have to pay 30 percent duty on some categories of garments.
It would also seriously erode Pakistan's advantage of having raw material, he added.
The Export Promotion Bureau Chairman was informed that it would take a long time before a new GSP was in place or Pakistan also signed a FTA with the US.
Tahir Aziz pointed out that the European Union buyers had already told Pakistani garment exporters that if they wanted to continue their business after December, they had to reduce their price by 12 percent.
Tariq Ikram told the Prgmea delegation that after the working paper was ready, the EPB would arrange a high level meeting to decide about the necessary incentives, required by the apparel sector to compete during the quota-free period.
Also present at the meeting were Quota Supervisory Council (QSC) Chairman Abdul Aziz Memon and EPB Vice-Chairman Abid Javed Akbar.
Razzak Paracha, Amin Bandukda and Ateeq Kochra attended the meeting from the Prgmea side.