EU bestows "GSP-Plus" status on Pakistan

The European Union (EU) has given GSP-Plus status to Pakistan, a move that is likely to encourage the textile and other industries as it grants exporters duty-free access to 28 member nations of the EU group. Pakistan was in talks with several EU member countries to get the status.
Under this, 75 Pakistani products would have duty-free access to European markets.
The status will facilitate Pakistan to export products worth over $ 1 billion to international markets and the textile industry alone is expected to earn profits of more than Rs 1 trillion a year.
Experts are of the view that the EU trade concessions will benefit Pakistan’s textile and clothing industry, mainly by enabling its products to compete with those of regional competitors like Bangladesh and Sri Lanka, which already have duty-free access to the bloc’s markets. Currently, of Pakistan’s total exports to the EU, textile and clothing makes over 50% which is worth $ 9.5 billion.

What is EU’s GSP system?
  • The EU’s “Generalised Scheme of Preferences” (GSP) allows developing country exporters to pay lower duties on their exports to the EU. This gives them vital access to EU markets and contributes to their economic growth. The “GSP+” enhanced preferences means full removal of tariffs on essentially the same product categories as those covered by the general arrangement. These are granted to countries which ratify and implement international conventions relating to human and labour rights, environment and good governance.
There are 3 key arrangements GSP scheme:
  • The standard GSP scheme, which offers generous tariff cuts to developing nations. Practically, this means partial or entire removal of tariffs on 2/3rd of all product categories.
  • The “GSP+” enhanced preferences means full removal of tariffs on essentially the same product categories as those covered by the general arrangement. These are granted to nations which ratify and implement international conventions relating to human and labour rights, environment and good governance.
  • “Everything but Arms” (EBA) scheme for Least Developed Nations (LDCs), which grants duty-free quota-free access to all products, except for arms and ammunitions.

Note: The EU has modified its GSP system which will come into effect from January 1, 2014.


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