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Impact of GSP Plus Status on Pakiston's Economy Essay

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IMPACTS OF GSP PLUS STATUS ON PAKISTAN’S ECONOMY

During last days Pakistan succeeded to secure the long awaited duty-free access to the European markets for four years, by winning Generalized Scheme of Preferences (GSP) Plus status with an impressive count of votes.
The EU’s "Generalized Scheme of Preferences" (GSP) gives developing countries a vital access to EU markets and contributes to their economic growth by allowing their exporters to pay lower duties on their exports to the EU.
GSP PLUS status will allow 20 per cent of Pakistani products to enter 27 EU countries without any tariffs and 70 percent on preferential rates. This would enable Pakistan to export more than one billion dollar worth textile goods to the international…show more content…
Further government needs to formulate a comprehensive policy to salvage the textile industry because exporters and manufacturers will not benefit from GSP Plus trade facility if facing the problems like chronic energy shortages, high cost of production, , worsening law and order and uncompetitiveness in international markets.
“Pakistan have to overcome complacency, inefficiency, corruption, bureaucratic bottlenecks, infrastructure problems and energy crisis to fully exploit the potential of the GSP plus status that has recently been given to it by the European Union,” said Syed Jawaid Iqbal, Chairman, SouthAsia Forum.
The status quo also raises questions over the country's ability and preparedness to meet the demand for textile products of EU countries and benefit fully from the GSP Plus status. Cotton’s local demand is expected to be increasing as Domestic Textile industry may require additional quantity of million cotton bales during the year. Cotton prices are also increased to Rs.100/Munds in the local market. These prices might further increase due to restoration of gas supply to Punjab base textile mills. Cotton production for the next year is also estimated as 13millions bales against the need of 15million bales to meet post GSP Textile export targets. In Faisalabad almost 50% of the textile units in textile have been shut down due to cuts in gas
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