PAKISTAN: Garment makers await EU trade facility
Pakistani garment exporters fear further delays in the implementation of an EU trade concession as textile producing countries France, Portugal, Spain, Italy and Greece are now opposing the facility.
The World Trade Organization (WTO) earlier this year approved a waiver allowing 75 Pakistani products duty-free access to European Union (EU) markets for three years.
The trade concessions now have to go through meetings of representatives from the European Commission, European Council and European Parliament.
According to officials at Pakistan's ministry of commerce, the EU has finalised a list of 26 items on which the Tariff Rated Quota (TRQ) will be applied - instead of the original EU agreement to allow duty-free export of 75 items including textiles, garments and, leather goods.
Initial estimates had suggested that Pakistan would earn about US$300m over the next three years, but the financial benefit of the concession is now likely be far less. The amount was to be spent on the victims of the floods that devastated the country in 2010.
Baroness Catherine Ashton, the European Union High Representative for Foreign Affairs and Security Policy, has assured Pakistani authorities that the facility will soon be approved.
Ejaz Khokhar, former chairman of the Pakistan Readymade Garment manufacturers and Exporters Association (PRGMEA), hopes for a US$900m garment export boost after the trade concessions.
And Mohsin Aziz, chairman of the All Pakistan Textile Mills Association, says that although the country has been hit hard by an ongoing energy crisis and high interest rates, the textile industry is preparing to invest US$1bn a year for the next five years to double production.
Pakistan will also be able to apply for zero EU duties on its exports to the EU under the GSP+ incentive scheme from 2014 under a planned reform of trade preferences approved by the European Parliament last week.
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