The much awaited trade concession package from the European Union has finally come through for Pakistan, but with safeguards, which does not make the package attractive anymore, says a leader of a Pakistan apparel trade lobby group.
Moreover, the concession has been announced after a period of more than 24 months, after floods affected large parts of Pakistan in 2010 and was meant to be a relief for flood affected Pakistan.
In 2010, the EU had proposed allowing duty-free access to 75 products, of which the textile and garment export sector account for 65 products, for a period of 36 months.
However, delays due to opposition from a few countries and a host of approvals from various agencies, the period of implementation has been reduced to just 14 months.
Also, most of the 75 products meant for duty-free exports have been linked to a 20 percent quantity cap.
The biggest disadvantage is the cap. The EU has permitted only a 20 percent hike in exports on quantity basis on most of the products, calculated on the basis of average for the years 2007, 2008 and 2009.
This has crushed the hopes of Pakistani textile exporters who were expecting a landfall rise in Pakistani textile and apparel exports.
Javed Bilwani – Chairman of the Pakistani Apparel Forum (PAF) did not mince words when he spoke to fibre2fashion. He said, "The cap on quantity is the biggest letdown for us. We cannot export more than the quantity specified against each item".
He added, "Secondly, the package has come a little too late, which has also taken away the benefits of the original envisaged three-year time frame. This means the benefits will be available for a period of only 14 months now".
The EU Parliament has inserted safeguards in order to protect its domestic industry and employment in the textiles and clothing sector against a surge in imports from Pakistan.
The EU has also inserted a clause, under which it can withdraw the trade measures if Pakistan imposes restrictions on exports of raw materials from EU, which are used to produce the 75 listed goods.
Pakistan's Senior Commerce Minister Makhdoom Amin Fahim said the EU package is likely to accrue financial benefit of around €500 million to Pakistan by December 2013.
