LAHORE: To take full advantage of GSP+, what is more important; implementation of the international human rights, environment, labour, governance and other conventions, or the provision of uninterrupted inexpensive energy and low-cost credit to the industry? Opinion remains divided.

While some fear withdrawal of concessions if the government failed to implement the conventions, others say the energy shortages and high credit cost could limit their capacity to exports.

The Punjab government, in the meanwhile, has constituted a working group comprising senior officials of different departments responsible for the implementation of the conventions and some businessmen to monitor progress, or lack of it. “The working group will be responsible for overseeing proper implementation of the conventions related to labour, human resources, environment, etc.”, Amir Fayyaz, a member of the group representing the large textile industry, said.

He said the formation of the working group at the provincial level was crucial to implementing the international conventions in the wake of the 18th Amendment. The group will be sending its periodic reports to the federal Ministry of Commerce.

Initially, the group plans to meet more frequently to streamline the issues,” he said. He agreed that there are issues, for example compliance issues related to environment protection, where the government will need to invest heavily to help the industry. “While large-scale industries can afford to set up their individual water treatment plants, the smaller units cannot. It is in such areas that the government will have to step forward and provide funds,” he said.

An exporter said the cost of failure to make progress on the conditions could be very high for the economy. “The implementation of these conventions is not important for saving the GSP+ tariff concessions, but are also crucial for making Pakistan a civilised and responsible country,” he argued.

A carpet exporter dismissed the fears that lack of progress on the said conventions could lead to GSP+ cancellation. “The EU trade concessions are part of international diplomacy and politics. We are being rewarded for our role in the West’s war on terror. They (EU/US) will keep facilitating our trade and buying from us as long as they need us. When they don’t need our help they will not care a bit if we are showing progress on governance or human rights,” he said somewhat cynically.

There is a broad consensus within the industry, however, that nothing can boost exports unless the government created a business-friendly environment. “We need to invest at least $6bn in textile capacities to convert yarn into fabric, dye it and make garments and made-ups to take full advantage of the concessions,” a leading knitwear exporter said.

“The future lies in exporting value-added products. If you cannot create capacities for that, you will be left behind. Tariff concessions alone cannot boost exports,” he added, demanding that the industry should be facilitated as India is doing.