Pakistan to regain access to new scheme: EU preferences
By Shadaba Islam
BRUSSELS, Sept 21: Pakistan will regain access to the European Union's new generalized system of preferences (GSP) as of 2006 after losing access to the scheme next year
, EU trade chief Pascal Lamy said on Tuesday.
The EU's new GSP set to enter into force in 2006 for a ten-year period will be simpler and concentrated on countries which need tariff cuts to sell their products in the 25-nation bloc, Lamy told Dawn.
Since the new system's rules for phasing out GSP benefits for developing countries will be different from current strict standards, Pakistan will be de-graduated as of 2006, the EU trade chief said.
Pakistani exporters are also expected to be eligible to secure special tariff preferences under the EU's future GSP plus scheme giving additional tariff cuts to countries, which abide by international labour rules and environmental standards as well as agree to fight drug trafficking.
Pakistan received such benefits in 2002 and is anxious to secure their continuation under the new GSP system. Access to the new GSP scheme is especially crucial for Pakistani exporters of garments and made-ups who are being phased out or graduated from the current system in 2005 after having overshot the EU's so-called speciality index.
Commerce Minister Humanyun Akhtar Khan told Dawn in Brussels earlier this week that the expected GSP graduation combined with an EU anti-dumping fine of 13.1 per cent imposed on Pakistan's bed linen exports was a double whammy, for Pakistani textile exporters.
"We know it's a problem," Mr. Lamy acknowledged, adding that he had told Mr. Khan that the EU could agree to a new scheme allowing South Asian countries to benefit from cumulative rules of origin for their exports to the EU. A similar scheme is already in force for members of the Association of Southeast Asian Nations (ASEAN).
Mr Lamy also warned that any moves by the US to restrict imports of foreign textiles after the end of internationally-agreed textile quotas next year could provoke similar action by the EU.
"We are watching the US very carefully," the EU trade chief said adding: "If the US has trade protection, that will not be a theoretical matter for us." If the US imposed import safeguards on China and other major textile exporters, prompting a diversion of trade to the EU, the EU would face a "problem," Lamy warned.
Mr Lamy was commenting on suggestions that Washington, worried about the elimination of world wide textile quota in 2005, may use specific safeguard measures to regulate textiles trade.
The 50-year old system of world textiles quotas is set to disappear next year, with trade in the sector being subject to the same WTO rules as commerce in other sectors.
Lamy said the EU had its own strategy for next year, focused on securing better access to textile markets in the US and emerging markets in Asia, Latin America and the Middle East. With quotas ending next year, China was clearly "perceived as the main threat" to other textile exporting nations, he said, adding: "China has to be aware of this."
