Strings attached: EU unveils new zero tariff import preference scheme

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ISLAMABAD: The European Union has asked Pakistan to show that it is serious about respecting human rights and ensuring good governance as the 27-nation bloc opens the doors for Islamabad to apply for the Generalised Scheme of Preferences Plus offering duty-free access from 2014.

On Wednesday, the EU published its import preference scheme, known as the Generalised Scheme of Preferences (GSP) Plus, for developing countries that were most in need. Pakistan has been classified among “low and lower income countries”. But the country needs to “prove that it is serious about implementing international human rights, labour rights, environment and good governance conventions,” a statement said. If Pakistan qualifies for the GSP+ scheme, which will take effect from January 2014, it offers the possibility for Pakistani companies to benefit from zero tariffs on all products being exported to the EU, according to the statement issued by the EU embassy in Islamabad. This can also give much-needed boost to declining Pakistani exports and foreign currency reserves as the country will enter a phase in 2014 when it will be returning most of the loans to international lending agencies.

The GSP+ status can also help reverse the trend of shifting of local industries to Bangladesh in quest of duty-free access to European markets. Following an agreement with EU member states and the European Parliament, the fresh publication contains specific tariff preferences granted under the GSP in the form of reduced or zero tariff and the final criteria for developing countries.

The scheme will focus on only 89 countries to ensure more impact on the countries that are most in need. The GSP+ offers zero duty for the covered product lines to support trade-vulnerable developing countries that commit to embracing 27 international conventions pertaining to human and labour rights, environment and good governance.

The opening of window for Pakistan represented an important opportunity in its relations with the EU, not just in terms of trade but also overall political and economic relations, said EU Ambassador to Pakistan Lars-Gunnar Wigemark. He said the EU recognised that Pakistan needed more trade and not just aid. “It is now for Pakistan to show that it can meet the conditions for these important trade preferences, in particular by respecting human rights, labour rights, environmental standards and good governance.”

Pakistan has already signed the 27 international conventions, some of which with reservations, but the EU has called on Islamabad to go a step forward by implementing them. The EU is Pakistan’s single largest trade partner with bilateral trade exceeding €8.1 billion or $10 billion in 2011. In that year, imports into the EU under GSP were worth €87 billion, representing around 5% of total EU imports and 11% of EU imports from developing countries.

The statement clarified the GSP+ should not be confused with the Autonomous Trade Preferences, covering about 27% of all Pakistan trade with the EU and granted in the wake of floods in 2010 and 2011. The flood-related measures will come into force in November after being delayed by the World Trade Organisation (WTO) and scrutiny by EU member states and the European Parliament.

It added the GSP+ was a comprehensive scheme, including all products and represented a far greater value for the EU and Pakistan. The current GSP scheme will remain valid until January 1, 2014, giving countries the time to adapt to the revised regime.

The new “Everything But Arms” arrangement grants duty-free access to imports of all products from least developed countries, except for arms and ammunitions, without any quantitative restrictions. 49 least developed countries are expected to participate in the scheme. Bangladesh currently benefits from this regime.

 

Courtesy: Tribune


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