ISLAMABAD: Pakistan’s exports to the European Union fell by over 25 per cent in the first eight months of 2015 from a year ago, indicating that the preferential market access failed to boost the dwindling exports from the country.

In absolute terms, exports proceeds under the Generalised System of Preferential (GSP+) scheme fell to €4.086 billion ($4.499bn) in January-August 2015 from €5.509bn ($6.065bn) a year ago, according to EU official data available with Dawn.

The preferential market access to the European markets under GSP+ became effective on Jan 1, 2014, and will remain available for next 10 years. In the first year, a growth of 20pc was witnessed.

The first review of the scheme will be held early next year to see performance of Pakistan’s compliance in terms of implementation of 27 conventions.

Commerce Minister Khurram Dastagir Khan was not available for comments. However, the commerce ministry does not consider it “very serious”, a source in the ministry told Dawn.

“Yes, we are aware of falling exports,” the source said, adding that it was an outcome of recession in EU.

A trade analyst said most of EU countries are facing persistent vicious circle of high unemployment, low wages, fall in purchasing power, decline in domestic demand and shrinkage in non-essential imports.

Pakistan’s government held out an assurance to the EU that it would implement the 27 conventions in a hope that the scheme will accelerate exports.

“The implementation of these conventions has a cost for the government,” the source remarked.

Negative growth under the GSP+ scheme was largely shared by all EU countries except for Luxembourg where exports witnessed a positive growth of 156pc in percentage form because value of total exports is just €0.295m.

Despite this fall in exports, trade with the 28-nation bloc was in surplus of €1.330bn during January-August 2015.

Country-wise data shows that a negative growth of 26pc came from the UK whose imports from Pakistan fell to €901.605m during January-August 2015 from €1,223.748m a year earlier. Exports to Germany dipped by 22.4pc in January-August to €856.606m compared to €1,103.811m a year earlier.

Both UK and Germany are major export destination for Pakistani goods but under the GSP+ scheme exports fell to both markets.

The third biggest market for Pakistan’s exports is Spain where exports also dropped by 17.9pc to €503.477m from €613.251m.

Traditionally, Spain was not the third biggest market for Pakistan’s exports destination and this position was grabbed in the past couple of years among all the 19 eurozone countries, including Germany, France and Italy owing to extensive marketing strategy.

Pakistan’s exports to Italy dipped by 29.9pc to €390.584 m from €557.196m last year. Exports to France fell by 34.5pc to €283.974m from €433.793m.

Exports to the Netherlands dropped by 20.5pc to €359.622m from €452.718m; to Belgium by 29pc to €254.386m from €358.542m; and to Sweden by 22.6pc to €84.713 m from €109.559m compared to the same period of 2014.

Export proceeds to the remaining 20 EU countries were far less than €100m in terms of value. However, the negative growth to all countries was in double digits in terms of percentage.

Pakistan’s exports to Austria declined by 44.8pc, Poland 30.45pc, Czech Republic 18pc, Greece 22.8pc, Slovenia 41.28pc, Finland 46.3pc, Bulgaria 36.6pc, Hungary 25.3pc, Denmark 21pc, Portugal 29.1pc, Lithuania 38.77pc, Slovakia 46.55pc, Romania 45pc, Cyprus 25.4pc, Latvia 43pc, Croatia 17.9pc, Estonia 26pc, Ireland 26.9pc and Malta 18.6pc.

Published in Dawn, October 24th, 2015

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