ISLAMABAD, Oct 21: The government has started formal consultations with relevant trade bodies to evolve a strategy for meeting the minimum requirements to qualify for European Union (EU) new generalised system of preferences (GSP) to be effective from the year 2006.

Secretary, Commerce, Tasneem Noorani said on Thursday that Pakistan has already qualified for the general GSP scheme - some per centage of reduction in duties on products - but Islamabad was making preparation for entering into the GSP plus scheme - zero rate of duty.

Talking to Dawn he said that the ministry has already hired services of consultant for making a strategy to meet the demands of GSP scheme.

Reacting to EU Trade Commissioner remarks that Pakistan might not be able to qualify for the GSP plus, the secretary said it was too early to say anything about it.

"We are studying the minimum requirement of GSP plus scheme. Nothing is clear at this moment about the scheme," he said

Mr Noorani said that Islamabad had already communicated to the EU authorities for seeking greater market access for their products as the country had suffered greatly from the war on terror since 9/11.

He said that due to war on terror, the cost of transportation in Pakistan has increased manifold, insurance gone up. And, above all, the issuance of travel advisory to the EU citizens has halted the visit of EU businessmen to Pakistan.

"We need to be compensated for all these. If they do not provide market access for our products, then extremism might get further momentum in Pakistan," he said.

He linked the economic development in Pakistan to reduction in extremism, which, he said, could only be possible after providing duty-free access to Pakistani products in the EU member countries.

Mr Noorani said that it might not be possible for India and China to qualify for the new GSP scheme. He said that following the approval of the scheme by the EC committee, Pakistan will also start formal political lobbying for getting access to GSP plus scheme.

The secretary disclosed that the major player of the EU has already given positive indication to support Pakistan for availing zero duty concession.

The new GSP scheme will be effective from January 2006 till the year 2015. The amount of customs duties levied on Pakistan's export to EU under its GSP scheme will directly affect Pakistan's export competitiveness.

The new GSP plus incentive would encourage sustainable development and good governance, which would replace former drugs, social and environment schemes - the GSP plus providing special incentives for countries that accept the main international conventions on social rights, environmental protection and governance, including the fight against drugs production and trafficking.