Textile associations have called for evolving a consensus on the changes being considered by European Union (EU) in the 'Rules of Origin' (ROO) for the new scheme of 'Generalised System of Preferences' (GSP plus).
The change in the rules would be mainly about fixing the threshold of value-addition achieved in the country from where the goods are shipped.
The current 'rules of origin' allow duty-free import of textile products only from a country enjoying the status of GSP plus, for example Bangladesh. If yarn or cloth is imported from Pakistan and is processed and stitched in Bangladesh it would be allowed duty-free access to EU.
The Chairman of Pakistan Hosiery Manufacturers Association (PHMA), Aslam Karsaz, told Business Recorder on Monday that Commerce Minister should hold meetings with the private sector to evolve a consensus on the issue so that the mistake committed at the time of formulating of the new GSP plus scheme framed by the EU is not repeated. Pakistan was excluded from the GSP plus although it enjoyed the GSP status.
He said that there would be no use crying over split milk "if we would start lobbying after the new Rules of Origin have been finalised, as we did in the case of new GSP scheme."
The textile sector is divided on the issue of new rules of origin. One faction believes that if Pakistan would go for the value-addition formula for duty-free access of its exports through Bangladesh, it would become a market of secondary goods producing only yarn and cloth, leaving the finishing to a third country. The process would also lead to a large-scale unemployment in the country, mainly in the stitching sector.
The other option is that Pakistan should move with the Saarc countries, pressing the EU to accept the grouping as a single trade unit for inclusion in the GSP plus. If the proposals are accepted, Pakistan's textile products would get duty-free access in the EU market.
Pakistan's current imports are 1.5 to 1.6 percent of total European imports.
The PHMA leader said: "It is high time that the government after evolving a consensus with the textile sector should start lobbying at the highest level to include Pakistan's point of view on the new ROO being framed by the EU."
The Towel Manufacturers Association (TMA) has also urged the Commerce Minister to ensure that textile sector's views are fully conveyed to EU officials and incorporated in the new rules.