KARACHI, Aug 18: The Export Promotion Bureau has asked the Pakistan Readymade Garments Manufacturers and Exporters Association to submit a working paper on the problems to be faced by the apparel sector in the post-quota era.

The decision to this effect was taken at a meeting between EPB Chairman Tariq Ikram and the PRGMEA members convened to discuss the performance of the garment sector in the free trade regime.

PRGMEA Chairman Tahir Aziz informed the EPB chief that the garment sector would be hit hard in the quota-free phase firstly because of the withdrawal of GSP by the EU, resulting in a 12 per cent duty on exports to Europe and, secondly due to high export prices compared to countries that signed FTAs with the US like Bahrain.

He said that these countries would have a duty-free access to the US market against Pakistan that would have to pay a 30 per cent duty on some categories of garments. It would also seriously erode Pakistan's advantage of having raw material, he added.

The EPB chairman was informed that it would take a long time before the new GSP was in place or Pakistan also signed an FTA with the US. Mr Aziz pointed out that EU buyers had already told Pakistani garment exporters to reduce their price by 12 per cent if they wanted to continue business after December 2004.

Mr Ikram told the PRGMEA delegation that after the working paper was ready, the EPB would arrange a high-level meeting to decide about the necessary incentives required by the apparel sector to compete in the quota-free regime.