ISLAMABAD (AFP) – Pakistani exports to the European Union increased by more than a billion dollars after a landmark trade deal last year which made its products more competitive, the commerce minister told AFP.
The EU signed a law in late 2013 granting Pakistan so-called “GSP-plus” status, which means firms pay no tax on certain categories of goods exported to the 27-nation bloc for 10 years.
The EU makes GSP-plus conditional on implementing international conventions on human and labour rights, and there have been fears Pakistan’s decision to end a moratorium on executions could affect the deal.
Pakistan’s key textile industry in particular welcomed the agreement, which came into force in January 2014, and in an interview with AFP commerce minister Khurram Dastgir Khan hailed its impact.
“As a result of GSP-plus, Pakistan’s exports to the EU have increased by $1.08 billion during the period January to October 2014 as compared to the same period in 2013,” Khan said.
Exports to the EU in January-October 2014 totalled $6.38 billion, up by just over 20 per cent from the $5.3 billion recorded in the corresponding period in 2013, he said.
Before GSP-plus, textile exports faced customs tariffs of between 6.4 and 12 per cent and leather goods and footwear up to six per cent, he said.
The textile industry is the backbone of Pakistan’s exports, making up more than 50 per cent of the country’s total overseas shipments.
“Now these exports have duty-free access in EU and it has helped Pakistani products to become more competitive vis-a-vis its competitors, including Bangladesh, India and Vietnam,” he said.
Khan played down the possibility that resuming executions could threaten GSP-plus status.
“There is no legal obligation to EU regarding death penalty, though they have expressed concern over it,” Khan said.
“They understand our situation that GSP-plus would help us create jobs and when we create jobs, it keeps young men and women away from terrorism.”
Improving the economy after years of drift and sluggish growth under the last Pakistan People’s Party government was a key pledge in Sharif’s election campaign in 2013, when he was swept to power for a third term.