Pakistan Readymade Garments and Manufacturers and Exporters Association (Prgmea) on Tuesday warned the move to cap seven important items in the EU Economic Package would have negative impact on the country's overall apparel exports to the union.
Speaking at a press conference, Prgmea's central and zonal chairmen, Shehzad Salim and Atiq A. Kochra at the association's head-office, said that if the EU proposed package did not become effective by January 2012, the country's textile sector would largely lose the benefits from the offer.
Shahzad Salim said that Bangladesh and Indonesia had opposed the EU package for Pakistan, adding "Bangladesh has refused to withdraw its objection despite assurance to Pakistan government under the pretext that its export-oriented industry is opposing the Package".
He said if the package became ineffective or the EU reversed the offer, it would have 'long-lasting' negative impacts on the country's textile sector. He, however, urged the government to step up its diplomatic efforts to mobilise support for attaining the GSP plus status for Pakistan in the EU.
"In case of EU denied the package the survival of Pakistan's textile exports to EU would be depending on GSP Plus (Generalised System of Preferences) for which Pakistan becomes entitled in January 2014," he suggested. Shehzad said stakeholders are ready to help the government out in its efforts to attain the GSP Plus status, adding a delegation comprising the representatives of value-added sector and the government officials should visit the EU member countries in this connection to lobby for the cause.
"The government of Pakistan should also hire a professional lawyer to plea Pakistan's case in the European Union (EU) for GSP Plus," the Prgmea chairman said. Shehzad believed that the matter of Pakistan's entitlement for GSP Plus would be decided by the EU member countries in a year time, saying the government along the key stakeholders should speed up lobbying right now.
He said due to poor persuasion of the case, Pakistan has yet been extended the EU Package despite the fact that there was no major benefit to the exporters from the proposed package. "Pakistan is exporting 1.4 percent of the total EU imports and to qualify for the GSP Plus the threshold should not be over one percent. The EU is open to consider revising this threshold at 2 per cent following which Pakistan will definitely qualify for the GSP Plus," he said.
He said at present 49 countries are getting GSP Plus including several African countries but Pakistan is facing tough competition from Bangladesh and Cambodia. The Prgmea chairman said the local industry would oppose the EU's ceilings on seven items. He said Pakistan continued exporting these products under different HS codes, adding the trade statistics were drastically understated.
"If we agree to these proposals, the ceiling in these categories would be exhausted in the first few months, thus severely limiting the benefits from the concessions," he pointed out. He said that in the wake of severe energy crisis in the country, the garments sector had lost export orders worth $800 million so far in the current fiscal year, adding if the situation continued exports would further decline in months to come.
He said that in October garments exports dropped by 10 percent and in further declined by 15 to 17 percent. He said that garments industry in Pakistan was directly providing employment to 5.75 million people. Shehzad demanded of the government to immediately release the long-time blocked Rs 6 billion refunds claims of garments sector. Atiq Kochra said he had approached the Federal Commerce Ministry and Trade Development Authority of Pakistan urging them to undertake lobbying.