Pakistan would have to provide evidence to the European Union (EU) that it has taken concrete steps to control rampant corruption and improved governance to secure trade incentives under the Generalised System of Preferences plus (GSP plus), sources said on Tuesday. The 27-nation EU bloc is Pakistan's largest trading partner.
In 2011-12, bilateral trade amounted to $9.88 billion. Pakistan's exports to EU were worth $5.36 billion against imports of $4.52 billion. According to the GSP-plus eligibility criteria, exports of a country should not exceed 2 per cent of EU's global GSP imports, seven largest sectors of products contributes more than 75 per cent of its exports to EU and it is not a high or upper middle income country.
Sources said communication strategy has been devised by Trade Development Authority of Pakistan (TDAP) to apprise private sector stakeholders of opportunities under GSP plus scheme. The Commerce Ministry has also engaged a law firm to assist MoC in the application process. The Commerce Ministry, sources said, has proposed sustained improvement in effective implementation by introducing new legislation where necessary and launching a special campaign to enforce existing laws.
GSP grants preferential treatment to developing countries. The scheme is revised every three years. The GSP scheme for the period January 1, 2011 to December 31, 2013 has three sub-arrangements: (i) general arrangements which allows preferential duty of 20 per cent of MFN tariff for textile and clothing products and 3.5 percentage points reduction of MFN tariffs for all other products in sensitive category. It allows duty free access on non sensitive products; (ii) special incentive arrangement for sustainable development and good governance (GSP plus) allows duty free treatment to eligible countries and (iii) arrangement for Least Developed Countries(LDCs) which provides duty-free market access to exports from the LDCs .
Mandatory conventions on which implementation is a must in letter and spirit for the GSP plus are as follows: (i) Convention on the Prevention and Punishment of the Crime of Genocide (1948); (ii) International Convention on the Elimination of All Forms of Racial Discrimination (1965); (ii) International Covenant on Civil and Political Rights (1966); (iv) International Covenant on Economic Social and Cultural Rights (1966) ; (v) Convention on the Elimination of All Forms of Discrimination Against Women (1979) ; (vi) Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1984); (vii) Convention on the Rights of the Child (1989); (viii) Convention concerning Forced or Compulsory Labour, No 29 (1930); (ix) Convention concerning Freedom of Association and Protection of the Right to Organise, No 87 (1948); (x) Convention concerning the Application of the Principles of the Right to Organise and to Bargain Collectively, No98 (1949); (xi) Convention concerning Equal Remuneration of Men and Women Workers for Work of Equal Value, No 100 (1951); (xii) Convention concerning the Abolition of Forced Labour, No 105 (1957) ; (xiii) Convention concerning Discrimination in Respect of Employment and occupation, No 111 (1958); (xiv) Convention concerning Minimum Age for Admission to Employment, No 138 (1973); (vv) Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No 182 (1999); (xvi) Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973); (xvii) Montreal Protocol on Substances that Deplete the Ozone Layer (1987); (xviii) Basel Convention on the Control of Trans boundary; (xix) Movements of Hazardous Wastes and Their Disposal (1989); (xx) Convention on Biological Diversity (1992); (xxi)The United Nations Framework Convention on Climate Change. (1992); (xxii) Cartagena Protocol on Bio safety (2000); (xxiii) Stockholm Convention on persistent Organic Pollutants (2001); (xxiv) Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998); (xxv) United Nations Single Convention on Psychotropic Substances ( 1971); (xxvi) United Nations Convention against illicit Traffic in Narcotic Drugs and Psychotropic Substances( 1988) and (xxvii) United Nations Convention against Corruption 2004.
The sources said, Pakistan's GSP covered exports to the EC represent 1.6 percent in value of the total GSP covered imports of the European Union, Pakistan ratified all 27 conventions with reservations on two conversations namely Convention against Torture (CAT) and International Covenant on Civil and Political Rights (ICCPR) required for admission into GSP Plus.
According to sources, exclusion of Pakistan from the GSP Plus Scheme has placed Pakistan in a difficult position in the context of SAARC. Sri Lanka, Afghanistan, Bhutan, Nepal, Bangladesh, and Maldives being LDCs have duty free access to the EU market, while Sri Lanka is a beneficiary of the GSP Plus Scheme, which entitles it to duty free treatment. EU-India FTA, as soon as concluded, will provide duty free access to India leaving Pakistan in isolation vis-à-vis competitors in the region.
Earlier Pakistan was not eligible for GSP plus because Pakistan's GSP covered exports to EU were more than 1 percent of EU's GSP covered total imports. Now this criterion has been changed from 1 to 2 percent. Pakistan's GSP exports to EU are 1.6 percent of EU's total GSP covered imports.