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EU Trade Office Reviews GSP Benefits in Pakistan

A delegation from the European Union Trade Office Generalized System of Preferences (GSP) Program visited Pakistan last week to check in on the status of the trade privilege’s benefits and how the country has progressed in terms of implementing labor and environmental laws.

All Pakistan Textile Mills Association (APTMA) chairman Sheikh Muhammad Akbar welcomed the delegation and said textile exports started showing progress in the E.U. market because of the GSP Plus facility.

GSP allows developing countries to pay reduced or no duties on their exports to the E.U., which gives them vital access to E.U. markets and contributes to economic growth.

“Textile exports have witnessed increase in apparel products by 24 percent in volume and 30 percent in value terms from January to December 2014,” he said, according to an APTMA news release.

The export growth pattern, however, has not been commensurate with the industry’s potential because of productivity constraints—namely energy.

Pakistan’s ongoing energy crisis has meant loadshedding at factories, and productivity has taken a hit as a result with factories struggling to meet foreign buyer’s demands. For the fiscal year to date, the nation’s exports are down 30 percent.

“Both the industry and the government are working on various solutions for the availability of energy at regionally competitive tariff,” Akbar said.

APTMA and German organization GIZ, which has been working on development cooperation with Pakistan have also launched a series of initiatives, including energy conservation, use of renewable energy, water conservation, material flow management and implementation of social standards in the Punjab-based garment sector. A better cotton initiative with best practices covering reduced water and pesticide use is also in work, according to Akbar.

The E.U. Trade Office director general of the GSP Program Marc Vanheukelen, who co-led the delegation with acting E.U. Ambassador Stefano Gatto, praised APTMA’s efforts to improve compliance in the industry, and said every two years the commission should present a progress report to the European Parliament and the Council.

The main focus, he said, should be on implementing human rights conventions including labor rights, child labor, women’s rights, gender balances, health standards and unionization.

“We are witnessing a change in Pakistan and things are now getting better, legislations are there with the sense of willingness,” Vanheukelen said.