ISLAMABAD, Sept 11: Pakistan will start a formal consultation on Monday with the European Commission regarding the new Generalized System of Preferences (GSP) scheme to seek maximum benefit under the scheme to increase its exports to European Union member countries.

A commerce ministry official told Dawn on Saturday that a Pakistani delegation led by Commerce Secretary Tasneem Noorani would hold parleys with Pascal Lamy, EC Trade Commissioner, and other high officials of the European Commission on the GSP scheme and anti-dumping duty. The discussions are scheduled for September 13-15 in Brussels.

The EC had sought views and suggestions from developing countries on the formulation of new GSP scheme to help them get maximum benefit from international trade. The new GSP scheme will be effective from January 2006 and will be valid till 2015.

The amount of custom duties levied on Pakistan's export to the EU under the GSP scheme will directly affect its export competitiveness. The commerce secretary will hold discussions with the European Commission for a positive finding on the issue of bedlinen.

The EU member countries will hold their first consultation in September this year on the issue. And as a result of the discussion on the new GSP scheme, it was expected that final recommendations would be made by the end of October 2004, the official said and added the final GSP document should be ready by the end of the current year.

The main feature of the scheme is to target the scheme on the countries that most needed it -- the least developed countries and the most vulnerable developing countries (small economies, land-locked, small islands and low-income countries).

The commission also proposes to reduce the current five GSP arrangements to three - a general arrangement, the "Everything but Arms", giving duty-free and quota-free access to the EU market to world's 50 poorest countries, and a new GSP plus, giving tariff preferences to countries with special development needs.

The new scheme also focuses on graduation - withdrawal of GSP - only on the most competitive products from those beneficiaries who were highly competitive on the community market and on longer need the GSP to boost their exports to the EU. In addition, small beneficiaries will not face graduation, and in addition, a special consideration will be given to the countries most in need, designing the graduation mechanism.

A new incentive to encourage sustainable development and good governance is proposed to replace former drugs, social and environment schemes by a new category - the GSP plus - providing special incentives for countries that accept the main international conventions on social rights, environmental protection and governance, including the fight against drugs production and trafficking.