ISLAMABAD, March 22: Pakistan will get duty reduction of around 3.5 per cent in export of all products except for textile and clothing to European Union (EU) member countries under the new normal generalized system of preferences (GSP) scheme. The new EU GSP scheme is likely to be effective from April 1, 2005 instead of July to give maximum help to Tsunami hit countries particularly Sri Lanka. Talking to Dawn on Tuesday Secretary Commerce Tasneem Noorani said that under the normal GSP scheme Pakistani exportable products would enjoy duty preferences of around 3.5 per cent on almost all products to the EU markets.

However, for the clothing sector, the duty reduction would be in the range of 2.5 per cent under normal GSP scheme and for yarn and fabrics, the duty reduction in import duty would be in the range of 1.2 to 1.4 per cent.

Pakistan, however, would not get any preferences in duty on export of all varieties of rice, agricultural products, Molasses and ethanol alcohol because all these products were placed in the sensitive list of the GSP scheme.

Answering a question, the secretary said that Pakistan had done an extensive lobbying for getting access to the GSP plus scheme—zero rate of duty — but it was not materialized.

He, however, said that government was considering various proposals for increasing Pakistan’s textile and clothing exports to EU following the failure to get an access to the GSP plus scheme.

Mr Noorani said that Pakistan linked the GSP plus scheme with countering the extremism and terrorism so that to generate maximum economic activities in the country which would ultimately result in reduction of these menaces.

On the other hand, the EU councils of ministers are scheduled to meet on March 24 to consider Indian case to qualify for getting preferences on its textile and clothing. In the draft released by the EC in October last, the graduation limit for textile and clothing for the new GSP scheme was fixed at around 10 per cent.

While the Indian share of textile and clothing in the GSP scheme was around 11 per cent that means that India could not get preferences in duty on textile and clothing under the new normal GSP.