ISLAMABAD: Pakistan’s exports to the European Union (EU) grew by over 17 per cent in the first ten months of the current financial year, largely due to the Generalised System of Preferences-Plus (GSP+) scheme.

According to data compiled by the ministry of commerce, export proceeds to the EU’s 27 member countries amounted to $7.474 billion during the July-April period against $6.367bn over the same period of the previous financial year.

Exports posted a paltry growth in terms of euros. The EU calculates trade figures on the basis of a calendar year — January to December.

The GSP+ scheme became effective on Jan 1, 2014, and it will remain available to Pakistan for the next 10 years, till 2024.

Top export destinations for Pakistan are Germany, the Netherlands, Spain, Italy and Belgium.

Recently, the EU parliament has suggested a premature end to the facility, but it’s not yet clear whether it will be pursued aggressively or not.

European parliament has suggested premature end to GSP+ facility for Pakistan

Diplomatic relations of Pakistan with France became uneasy when some religious groups in the country demanded expulsion of the French ambassador over the issue of sacrilegious sketches.

In Brussels, France now plays a very important role after the exit of Britain from the EU and might expedite an early end to the GSP-Plus facility for Pakistan.

On April 29, the European parliament had adopted a resolution calling for a review of the GSP+ status granted to Pakistan in view of current events. The EU parliament called on the European Commission and the European External Action Service “to immediately review Pakistan’s eligibility for GSP+ status and whether there is sufficient reason to initiate a procedure for the temporary withdrawal of this status and the benefits that come with it, and to report to the European Parliament on this matter as soon as possible”.

Advisor to the Prime Minister on Commerce Abdul Razak Dawood says the EU is a very important market for Pakistan. “We greatly appreciate the tireless efforts of our exporters for making this possible to increase exports to EU under very difficult conditions.”

A product-wise analysis shows large variations. For example, exports of garments and hosiery to the EU witnessed a growth. The second biggest export category is home textiles and the third category is cotton and intermediary goods of textiles.

Other products exported to the EU included articles of leather, rice, sports goods (footballs), surgical goods, footwear, plastics, minerals, machinery, carpets, cutlery, chemicals, articles of rubber and pharmaceuticals.

Prior to the Brexit, Pakistan’s major export destination was the United Kingdom. In the post-Brexit period, Pakistan’s exports continued to grow by 31pc to $1.709bn from July 2020 to April 2021 from $1.309bn in the same period of the previous financial year.

The remittances from the UK also increased by 62pc during July-Mar FY21. The increase in exports to the UK is an encouraging factor. However, exporters fear they will lose the UK market following Brexit. London, however, has assured Islamabad of no change in the post-Brexit scenario which is evident from the statistics of export proceeds.

In terms of market penetration, the UK is now replaced by Germany under GSP-Plus and emerged the top export destination for Pakistani products. Country-wise data shows that the growth of 19pc came from Germany as its imports from Pakistan surged to $1.279bn during the period under review as against $1.079bn.

The second biggest market for Pakistan’s exports is the Netherland. Exports to that country went up by 21pc to $1.04bn against $0.861bn over the last year. Both Germany and the Netherland have emerged as major export destinations for Pakistani goods under the GSP+ scheme.

The third biggest market for Pakistani export goods is Spain. Exports to that country posted a paltry growth of 2pc to $738.75m this year as against $719.79m. Spain had become Pakistan’s third biggest market within the EU in the post-GSP-Plus period.

Exports to Italy increased by 4pc to $640.11m against $615.22m. The export proceeds posted a paltry growth but Italy is the fourth biggest market for Pakistani products in the EU.

Exports to Belgium increased by 12pc to $523.11m against $465.39m, followed by 14pc growth to France as export value reached to $337.02m against $296.20m over the last year.

Pakistan’s exports to France are negligible.

Exports to Poland grew by 23pc to $256.63m against $209.18m, followed by 32pc to Denmark as it grew to $208.87m as against $158m over the last year. The export proceeds to Sweden up by 21pc to $132.08m against $109.39m over the last year.

Export proceeds to the remaining 18 EU countries were far less in terms of value.

However, the increase in exports to all countries was posted in percentage terms. These countries included Austria, Ireland, Greece, Finland, Slovenia, Romania, Bulgaria, Hungary, Croatia, Estonia, Cyprus, Latvia, Malta, Slovakia, Lithuania and Luxemburg.

Published in Dawn, May 13th, 2021