ISLAMABAD: The British vote to leave the European Union (EU) would not immediately affect Pakistan’s exports under the Generalised System of Preferences Plus (GSP+) scheme, Commerce Minister Khurram Dastgir said on Wednesday.

The ministry, however, fears Islamabad might lose a supporting voice in Brussels for continuation of the preferential package in the wake of Britain’s permanent exit from the EU.

Both Britain and Germany are major destinations for Pakistani exports under the GSP+ scheme, which became effective on Jan 1, 2014 and will remain available for the next 10 years.

Nearly a week after the so-called Brexit vote, the commerce ministry has come up with a clear policy stance on the issue and proposed a plan to tackle the possible backlash after Britain’s exit from the 28-nation bloc.

Mr Dastgir said Pakistan’s exports to the United Kingdom under the scheme were now going to be affected immediately. Moreover, Britain has not officially invoked Article 50 of the European Union’s governing treaty to formally begin the process of leaving, the minister clarified.

Moreover, Article 50 gives an exiting country two years to negotiate terms — on issues like trade and migration for example — for its relationship with the EU. This suggests that Pakistani exporters will continue to enjoy the duty-free export status to Britain for the next two years.

Under the GSP+ status Pakistani exports to the EU fell by 12pc to $6.67 billion in July-December 2015 from $7.56bn a year ago. It was only in the first year of the preferential tariff scheme, ie 2014, when Pakistan’s exports increased by 22pc year-on-year.

The commerce ministry is now looking for new supporters from within northern Europe and France and Germany to enjoy the same privileges at Brussels in the wake of Britain’s formal withdrawal from the EU.

The ministry will conduct a round of trade diplomacy with EU member states to strengthen trade relations and augment support in the European parliament and the European Commission.

According to an official statement, Mr Dastgir has also directed the trade commissioner of Pakistan in Brussels, Omer Hameed, to enhance diplomatic contacts with his counterparts, especially with the representatives of countries in Northern Europe, which are traditionally in favour of trade liberalisation.

“Commercial officers posted in the embassies of Pakistan in Europe will be issued directions to liaise with respective trade ministries of host countries in order to project Pakistan’s credentials and progress on trade and GSP+ front,” the minister said.

He said that it is time for Pakistan to win over new friends and revitalise the old friendships in the EU to safeguard Pakistan’s interests in the European parliament and commission.

On Tuesday, Mr Dastgir met the ambassador-designate to France, Moeen-ul-Haq, and urged him to conduct proactive trade diplomacy in France. The minister also directed Mr Haq to prepare for a ‘Design Expo’ in Paris in the spring next year.

The minister said that instead of holding a regular trade exhibition, the Ministry of Commerce would showcase the designing prowess of Pakistani entrepreneurs in jewellery, furniture, fashion, handicrafts, sports and textile design, which would have a greater appeal to the artistic taste of French buyers.

Published in Dawn, June 30th, 2016

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