The European Parliament has officially granted Pakistan duty-free access to its markets under the Generalized System of Preference Plus (GSP), effective January 1 2014. The vote was overwhelmingly in favor of extending the coveted trade status to Pakistan, with 406 members registering their support and 186 withholding it. The new designation is expected to have a sizable impact on Pakistan’s exports, affecting more than 3,500 different products.
Currently, the European Union (E.U.) is Pakistan’s primary destination for its textile exports. Overall, Pakistan’s textile exports topped $13.06 billion last fiscal year, including $2.7 billion worth of yarn and $2.5 billion of fabric to Bangladesh, specifically. Pakistan’s exports have grown by approximately 12.5% per year, with a growth of 10.3% to the EU, in particular. The textile industry accounts for more than 50 percent of the nation’s total exports. While forecasts regarding the full reverberations of the new status for Pakistan vary widely, many predict growth by as much as 100 percent over the next four years.
Thirteen textile products are included on the list of those than can be exported duty-free to the the twenty-seven members of the EU, accountable for $231 million worth of goods last year. Some are predicting this will increase Pakistan’s exports to the EU by $1 billion.