Continued EU tariff concessions for Pakistan as GSP+ status extended

In what is acknowledged as a breakthrough development, Pakistan has been approved for another Generalised Scheme of Preferences Plus (GSP+) status till 2022, which means it can enjoy exporting goods to Europe without the regular levy of duties.

Pakistan was first awarded GSP+ status in 2014 and ever since has been securing minimum tariff levy and duty-free trade in a number of exports into Europe.

In a tweet on Friday, Adviser to Prime Minister of Pakistan for Commerce, Industry and Investment Abdul Razak Dawood announced the development that had been under consideration since the third Biennial Assessment of GSP+ was published on February 10.

“This would strengthen our resolve to continue to improve the social and economic conditions of our people. I urge the business community to diversify their exports to capitalise on this opportunity to the optimum,” Dawood wrote.

The Biennial Assessment underscores 27 conventions for international trade, including steps about climate change and improved vigilance against crime and narcotics. Compliance with these steps ensures that countries stay in the GSP+.

In a video, Dawood commended all the federal ministries whose contributions led to a positive assessment and thus extension of the status.

Since 2014, when the grant of GSP+ was awarded, Pakistan’s exports to the European Union have soared 65%, from 4.538 billion Euros in 2013 to 7.492 billion Euros in 2019.

The sectors to avail the most benefit out of the tariff concessions were textile and garments.

This development is despite the fact that Pakistan is still on the FATF’s Grey List. According to the EU report, Pakistan did well on the 27 international conventions.

The duty-free access helps Pakistan’s exports stay competitive in a market dominated by India, Turkey, Vietnam and China. For Pakistan, the EU’s GSP+ status means full removal of tariffs on over 66% of product categories for exports to the EU. The textile exports used to face customs tariffs of between 6.4% and 12%.

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