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UK firm to help get GSP-plus status

August 30, 2011

The EU GSP was a key instrument to help developing countries to reduce poverty by generating revenue through international trade. - File photo

ISLAMABAD: Pakistan will formally engage a UK-based consultancy firm for lobbying with European countries to qualify for the next generalised system of preferences (GSP) plus scheme envisaging duty free access to the European markets, it is learnt.

The consultancy firm will help Pakistan's economic team in negotiating the deal and also to inform the ministry of commerce in advance about any apprehension/queries, which may arise from any member country during the process of finalising the trade facility for the developing countries.

Secretary Commerce Zafar Mehmood will leave for London on Sunday to strike a deal with the firm, a senior ministry official told Dawn on Tuesday.

The EU GSP was a key instrument to help developing countries to reduce poverty by generating revenue through international trade.

Pakistan was excluded from the current GSP plus scheme, which allows more than 7,000 products to enter European market without duty effective since 2006 on almost similar grounds.

The logic behind hiring the services of the firm, according to the official, was to timely cope with the conditions that might again lead to phasing out of Pakistan during the GSP review, which was expected to be completed by end 2013.

An official source said the consultancy firm was considered to be politically influential for having important people on board as consultants and directors hailing from various European and Britain political families will help Pakistan in getting duty free access.

The firm will give guidelines and lines of action to Pakistan for taking up the GSP plus issue with the EU member countries on diplomatic level.

At the same time, the firm will plead Pakistan's case for GSP facility at various forums, interacting with the various interest groups like EU textile lobby etc.

Pakistan had availed the services of the same consultancy firm while seeking trade concessions from the EU in the wake of last year devastated floods. The firm did help Pakistan to get concessions on 75 items by the European parliament but unfortunately, its implementation was blocked by India.

In 2006, Pakistan was phased out from the scheme following evolving another eligibility criterion that was asking that only those countries could be considered for the scheme, which has less than one percent share in the EU total external trade. As a result of this, Pakistan was denied the facility as at that time Pakistan's share in EU trade was around 1.7 per cent.

Recently, Pakistan had rectified two UN Conventions on anti-torture, civil and political rights in its letter and spirit. The implementation of these two conventions would lead to paving way for Pakistani exports in the 27-EU member countries at zero per cent duty.

Aside from the implementation of these conventions, less than one per cent exports to EU was another important condition for availing the scheme.

However, the official said that the EU has proposed to enhance the limit from one per cent to two per cent, which will be subject to approval of the EU parliament.

This means that those countries, which have more than one per cent share in the total GSP trade would not qualify for the zero rating duty under the new scheme.

Pakistan's current share in the GSP scheme stood at around 1.7 per cent to 1.9 per cent. But again if the trade share enhanced to 2 per cent then Pakistan would automatically be excluded from the next scheme as well.