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Exports to US surge by 49pc

April 18, 2013

— File Photo

ISLAMABAD: Pakistan’s export to United States surged by 49 per cent in the year 2012 from a year ago under the duty free Generalised System of Preferences (GSP) programme.

The US GSP provides duty free access to 3,500 products from Pakistan and 127 other countries. The total import value of US GSP was $19.9 billion in the year 2012.

But the share of Pakistan’s in US total GSP imports is $129 million during the year under review, which is still much below the potential to avail the facility.

During a seminar for members of Pakistani business community, senior officials from the Office of the US Trade Representative (USTR) here on Wednesday explained how Pakistani exporters can further take advantage of duty-free access to America.

Deputy Assistant Trade Representative Bill Jackson through a live video conference told participants at Islamabad Chamber of Commerce and Industry that Pakistan can grow its duty-free exports to the United States even more. Pakistan exported $3.6bn worth of goods to the United States in 2012, yet only 5.7pc of that amount took advantage of the duty-free treatment available under the GSP Program.

USTR identified all GSP-eligible products and highlighted how Pakistani exporters who are actively looking for potential US buyers can use GSP to increase their exports to the United States.

The major items that can be exported to US market duty free include jewelry, many agriculture precuts, chemicals, minerals, marble and carpets. However, the facility was not extended to most textiles and apparel, watches, footwear, handbags, luggage, some gloves and leather goods.

Pakistan therefore has the opportunity to expand its exports to the United States substantially under GSP.” Citing an example of how Pakistani exporters can enhance sales to the US under GSP, Jackson noted that Pakistani exports of gemstones, precious metals, and jewellery to the United States showed impressive growth of 300pc in 2012 – totalling $32.4m – following a previous training session that raised awareness about available market access.

Pakistan’s top GSP exports to US in 2012 also include plastics in primary forms and semi-finished and finished products worth $29.8m, followed by $21.1m sugar and sugar confectionery; $19.7m tool and cutlery made of base metals; $13.1m textile articles, used textiles and rags and $10.1m leather goods.

Jackson advised Pakistani exporters of GSP-eligible products that there are several ways to make the most of the available tariff advantage.

The GSP eligible textiles and apparel include silk fabrics and apparel including dresses, women’s suits, scarves; hand-loomed cotton fabrics, many types of gloves and mittens, national flags, and hand-loomed and hand-hooked carpets.

“First, consider using GSP as a marketing tool with U.S buyers. US importers may be willing to buy new products from Pakistan or buy more of a particular product if they know that the item is eligible for duty-free treatment under GSP. Many US importers are also unaware that a product may be eligible. As a result, they often pay duties on these products even when they don’t need to do so,” he emphasised.

In 2012, unnecessary duties were paid on GSP-eligible products from Pakistan, such as leather sports gloves, mittens, and mitts; certain non-cotton pillows, cushions, and similar furnishings, he explained.

Pakistani exporters in major business hubs including Karachi, Islamabad, Gujrat, Peshawar, Faisalabad, and Sialkot attended this live video-conference presentation by USTR at the Trade Development Authority of Pakistan in Karachi and at many chambers of commerce and industry across Pakistan.

Parvaiz Ishfaq Rana from Karachi adds: Pakistan could increase duty free imports into the US by using GSP as a marketing tool and also ensure that its treatment is claimed.

This was the advice given by US trade experts during a meeting held at the Trade Development Authority of Pakistan (TDAP) here on Wednesday.

The meeting was attended by economic officer US Consulate General, Karachi Kara Babrowski and economic specialist Fahd Zaidi while TDAP was represented by its chief executive Abid Javed Akbar and director investment Shahida Qasir. The meeting was also attended by a large number of exporters.

The experts said that US imports from Pakistan stands at around $3.6bn which includes imports of $195m made through GSP which stands 5pc of total imports.

There is an urgent need to diversify exports from Pakistan by capturing new trade opportunities for creating jobs. Around 3,500 different products from Pakistan are eligible to enter the US duty-free under the GSP programme.