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Pakistan applies for GSP Plus

March 16, 2013

ISLAMABAD, March 15: On the eve of the government’s departure, Pakistan on Friday submitted a formal application to the European Commission to qualify for the duty-free exports status to 27-members European market under the new generalised system of preferences (GSP) plus scheme, Dawn has learnt.

It is worth noting that the last date for filing of application was February 1, 2013.

The successful states will be named by end of 2013 and the GSP Plus will become operational for new countries from January 1, 2014.

If Pakistan is granted GSP plus from 2014 onwards, bulk of its products would have duty-free access to European Union and it is expected that rate of export growth in EU member states would increase significantly.

Pakistan has fulfilled initial conditions, but it is not clear whether it will qualify for the scheme or not. Earlier in 2002, the EU had given to exports from Pakistan concessionary access to its market for three years. Since then it had been pleading its case with the European community for fresh relief.Commerce Ministry official spokesperson Muhammad Ashraf confirmed to Dawn the submission of the application in Brussels. “Yes, we submitted the formal application. The European Commission technical team will take maximum six months to evaluate Pakistan’s application. Then, the application will be submitted to the European Parliament for approval in two months period. The whole exercise will take eight to 10 months,” he said.

As per criteria of EU’s GSP plus from 2014 onwards, the GSP exports of applicant country must not be more than 2 per cent of EU’s global GSP imports (previously 1pc), its seven largest sectors contribute more than 75pc of country’s exports to EU, and the country is not declared as middle or high middle income country by the World Bank.

The EU was obliged to have an objective criterion for its GSP-plus scheme in 2005 due to a decision of WTO.

At that time, Pakistan was not eligible to duty-free access in EU as its GSP exports to EU were more than 1pc of EU’s GSP imports from the world (Import Vulnerability Threshold).

The EU has now amended its criteria and import vulnerability threshold has been raised from 1pc to 2pc.

After fulfilling the previous requirements, Islamabad was now facing the issues regarding implementation and periodical reporting of the 27 international conventions.

Countries, which want to benefit from GSP plus scheme, are required to ratify and give binding commitment to effectively implement 27 international conventions on human rights, political rights, labour rights, environment, narcotics control and good governance.

An official source familiar with the development told Dawn that Pakistan has ratified all conventions in letter and spirit. He said there were no issues related to the ratification but only problems were identified at the implementation stages.

According to the source, the backlog was only related to the not filing of periodical reports. “We have cleared almost all reports in the past couple of months,” the source said.

There may be one or two reports left behind which will be submitted latest by March 31, the source claimed.

The federal and provincial governments have already undertaken various legislative and institutional measures to ensure effective implementation of these conventions in the light of our international commitments as well as principles enshrined in Pakistan’s constitution.

EU’s Special Incentive Arrangement for sustainable development and good governance, popularly known as GSP Plus, provides duty-free access to a few developing countries that fulfill its criteria.