KARACHI, Sept 9: Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) has sought extension in duty-free status on European Union imports from Pakistan till 2006.

The duty free access for three years given by the EU from October 2001 is going to expire from December 31, 2004, which would mean that EU member states imports from Pakistan would be subject to 12 per cent duty under Generalized System of Preference (GSP).

Speaking at a seminar on "Ramifications of the GSP regime" Prgmea Chairman Tahir Aziz said that against this India and China would stay out of GSP regime whereas Bangladesh would be enjoying concessions on account of being least developed country.

Consequently, he said from January 1, 2005 the 12 per cent duty would be re-imposed on Pakistani imports to EU member states. He stressed the need to get some duty relief at least for another year as from 2006 new GSP rules would become effective for next 10 years.

Mr Tahir feared that as a result of this the buyers were already threatening us to go to other sources as they were not ready to absorb 12 per cent duty for full one year i.e. 2005. He feared that as a result of this the apparel production would decline which may lead to closure of units.

He said that the graduation criterion of two per cent market share should be changed and the level be enhanced to 15 per cent share. He said that other countries would pay less duty whereas Pakistan would be paying the highest, which would be a crippling blow to the industry.

"If the EU does not allow duty concessions under the GSP regime to Pakistan it would further aggravate poverty problem which would ultimately deteriorate law and order situation in the country," he apprehends.

The Prgmea chief suggested that this issue should be taken up at all levels, including political and private sector for which negotiations should be opened up with the EU.