January 3, 2002	Thursday	Shawwal 18, 1422

KARACHI, Jan 2: The European Commission (EC) has officially notified the Generalized System of Preferences (GSP) under which Pakistan is going to benefit duty free exports to European Union (EU) member states for a period of three years starting Jan 1, 2002.

The Council Regulation (EC) No 2501/2001 appearing in the official journal of the European Communities is effective for the period from Jan 1, 2002 to Dec 31, 2004.

Pakistan is going to be one of the beneficiaries for enjoying duty free exports of large number of goods, including textile made ups, towels, bedlinen, furniture engineering goods, etc. Yarn is an exception which has not been included in the list of items.

Although the European Commission in November 2001, signed an agreement with government of Pakistan allowing duty free access to European market for a large number of items but it has been officially notified on December 31, 2001, to give legal status to the agreement.

The generalized tariff preference status given by EC to Pakistani products will give a duty free margin of 8 to 10 per cent over other country’s exports which is by any standard a big margin.

Officially it is being reckoned that the country could easily benefit by increasing its exports up to $500 million as more European buyers would prefer to go for duty free imports of goods from Pakistan.

The present GSP status could be extended beyond year 2004, provided exporters manage to avail the opportunity and increase country’s exports on meeting EC’s laid down conditions in its Council Regulation applying a scheme of generalized tariff preferences for the period from Jan 1, 2002 to Dec 31, 2004.

“It is a major breakthrough for country’s exports as the

GSP status allows duty free exports of quota and non quota items to 15 member EU countries,” a garment exporter said.

However, there are apprehensions among some exporters who strongly feel that all this could only be achieved provided the government keep our cost of production in line with those of our competitors in the world market.

After the appreciation of the rupee up to 8 per cent against the dollar in the post-Sept 11 developments, the exports, in a way, have already become costlier, towel exporter said.

Consequently, there would be a need of persistent monitoring of cost effectiveness from the government as well as exporters in order to maintain the edge provided by the EC under GSP status to our exports, another exporter said.

The annual exports to EU member states presently stands around $2.4 billion and it is the second biggest trading partner of Pakistan.

Some of the conditions laid down by the EU for exporting goods under tariff preferences are linked to meeting ILO conventions, drug trafficking, special incentive arrangements for the protection of labour rights as well as environment protection, etc.