Transcript Slide 1

Pakistan’s accession to GSP Plus Status
EU GSP Scheme, Regulation 978/12
GSP Plus Scheme
 Article 9 and Annexure VII of Regulation 978/12
A GSP beneficiary country may benefit from the tariff preferences
provided under the special incentive arrangement for sustainable
development and good governance if they have:
 Less than 2% share in imports of EU and seven largest GSP
sections of its imports into the Union of products listed in Annex
IX and represent more than the threshold of 75 % in value of its
total imports of products listed in that Annex, as an average
during the last three consecutive years
 Ratified all the conventions listed in Annex VIII of the Regulation,
undertaking for maintaining the ratification, accepting of regular
monitoring and reporting in accordance to the conventions etc.
 Article 12
“The Common Customs Tariff ad valorem duties on all products
listed in Annex IX which originate in a GSP+ beneficiary country shall
be suspended”
Graduation/Removal of Incentive
 Article 10(5)
Where a GSP+ beneficiary country no longer fulfils the conditions
referred to in points (a) or (c) of Article 9(1), or withdraws any of its
binding undertakings referred to in points (d), (e) and (f) of Article
9(1), the EU may remove the concessions.
 Graduated from vulnerability parameter i.e. 2% of EU Imports or
75% product diversification
Failure in implementation of ratified conventions
Failure to maintain ratification of the conventions
Reservation in the process of monitoring and review as per
ratified contentions
Failure to participate and cooperate in monitoring process
according to Article 13
GSP+ Scheme Coverage
 Article 11 and Annex IX, EU Regulation 978/12
“The products included in the special incentive arrangement for
sustainable development and good governance (GSP+) are listed in
Annex IX of the Regulation”
Annex IX includes complete textiles and clothing value chain i.e.
Harmonized commodity description and coding System (HS)
chapters 50 to 60 under Section 11a and chapters 61 to 63 under
Section 11b”
Duration of the Scheme
 Article 43(3)
“The scheme shall apply until 31st December 2023. However, the
expiry date shall neither apply to the special arrangement for the
least-developed countries, nor, to the extent that they are applied in
conjunction with that arrangement, to any other provisions of this
Reporting Mechanism
 Article 14
“By 1 January 2016, and every two years thereafter, the Commission
shall present to the European Parliament and to the Council a report
on the status of ratification of the relevant conventions”
That report shall include:
(a) the conclusions or recommendations of relevant monitoring
bodies in respect of each GSP+ beneficiary country; and
(b) the Commission’s conclusions on whether each GSP+ beneficiary
country respects its binding undertakings to comply with
reporting obligations,
 Article 29
Under this Article, the Commission can remove tariff preferences in
face of certain trade performance criteria
 Increase by at least 13,5 % in quantity (by volume), as compared
with the previous calendar year
 Those products of a country which exceed 6% of total EU imports of
that product referred to in Article 29(1), shall attract the above
Rules of Origin
 Article 33, “To benefit from the tariff preferences, the products for
which the tariff preferences are claimed shall originate in a
beneficiary country”
 For the purposes of the preferential arrangements referred to in
Article 1(2) of this Regulation, the rules of origin concerning the
definition of the concept of originating products, the procedures
and the methods of administrative cooperation related thereto shall
be those laid down in Regulation (EEC) No 2454/93
 Products originate in a particular beneficiary country if they are:
 wholly obtained in that country, or
 sufficiently worked or processed there
Example of Rules of Origin
 Manufacture of a garment starting from non-originating yarn
confers origin. This means that weaving and all subsequent
manufacturing stages must be carried out in the beneficiary
HS Heading
Chapter 61 (Knit
Description of
Obtained by sewing
together or other
wise assembling two
or more pieces of
knitted fabric
Qualifying Operation (Working or
processing, carried out on non-originating
materials, which confers
originating status)
For LDCs
Other Beneficiary
Manufacture from
Knitting and Making
up (including
Regional Cumulation
 Groups that may benefit from Regional Cumulation are four:
 Group III: Bangladesh , Bhutan , India , Maldives , Nepal , Pakistan,
Sri Lanka
 Materials originating in one country of the group which are further
worked or processed in another beneficiary country of the same
group are considered to originate in the latter country.
 Regional cumulation between countries in the same regional group
shall apply only under the condition that the working or processing
carried out in the beneficiary country where the materials are
further processed or incorporated goes beyond the minimal
operations set out in Annex 16
Pakistan and the Scheme
 Pakistan’s application for attaining the status of a GSP Plus
Beneficiary has cleared all pre-requisites and procedures
 Pakistan has won majority of the votes of MoEP in its favor through
well planned and coordinated efforts
 Eligibility of Pakistan as a GSP+ beneficiary is expected to be
published / notified on January 6th, 2014, however, it would be
effective from January 01, 2014.
 The benefit of zero rate duty will be applicable to Pakistani products
entering in EU on or after January 01, 2014.
 Keeping all other factors constant, Pakistan can now achieve an
increase of around 29% in total exports to EU due to emergence of
GSP Plus with in an year
The increase in textiles and clothing exports can be expected around
The tariff advantage is maximum for the apparel sector of Pakistan
and hence Pakistan should gear up towards value added market.
The experience of ATP has also shown us that we have better
chances to capture the apparel sector as our utilization percentage
is expected to be more than 93% of quota in apparel product lines in
It is also expected that due to various safeguard provisions in the
new GSP Scheme the strong product lines of India and China may go
further into disadvantage as an outcome of expulsion from the GSP
 The prime products in which Pakistan is expected to do the best
 printed bed linen of mmf
 cotton trousers (men and women both)
 dyed and printed bed linen of cotton
 men’s knit trousers
 Towels
 Socks
 cotton jerseys
 printed twill cotton cloth etc
 The real challenge for Pakistan will be to ensure 100% utilization
of its capacities and resources and its diversion towards value
Opportunities and Challenges
 The GSP+ will act like a catalyst to rejuvenate Pakistan’s entire export
products range
Benchmarking of products in which we have a competitive edge, rather
than comparative edge
Modernization of management and processes
Greater use of IT, especially for monitoring of T&C exports
Enabling environment must be created at all levels – legislation,
facilitation and export-friendly policies
Product diversification will be necessary to avoid saturation – 13 tariff
lines share more than 50% of our textiles exports mix
Activity on Ground
 Minister has already convened first meeting with value added
apparel stakeholders on the topic. Following decisions have been
 GSP+ Textiles Facilitation Committee is being notified
 Data sharing with PRAL on a weekly basis to start from January,
FBR to issue single consolidated SRO for apparel sector
Revision of rates of drawbacks by Input Output Coefficient
HS Codes synchronization where necessary
Training for skill and product development
Future Strategy
Proposed Measure
Awareness of GSP+
Scheme and EU Rules
of Origin
Seminars and workshops to
disseminate information on
GSP+ Scheme and Rules of
Textile Industry
Division, FBR
Easing the liquidity
crunch of SMEs
Pending liabilities of Textiles
Policy Initiatives be paid;
Timely refund of Sales Tax and
Drawbacks (textile sector may
again be declared Zero Rated
Finance Division
and FBR
Unskilled Labor
Release of EDF funds for revival Commerce
of Stitching Machinery Operator Division, Textile
Training Scheme (SMOT)
Industry Division
Future Strategy
Sr. Issue
Proposed Measure
Value addition
Simplification of SROs and other
schemes for import of raw material
and accessories for value addition;
Awareness Seminar on Temporary
Importation schemes
FBR, Commerce
Division and
Textile Division
More than 50% of our exports are
confined to only 13 products;
Funds to be allocated to textiles
educational institutes including
National Textile University for
development of new products
Division and
Textile Industry
Future Strategy
Sr. Issue
Proposed Measure
Drawbacks on deemed
import basis are
warranted to increase
share of Blended Products
NTC recommendations be
Increase in Cotton
Production (1 million
cotton bales earn $ 1
•Availability of Certified Seed
•Enactment of Plants Breeders
Rights Act
•Amendments in Seed Act 1976
•Improvement in Extension Services
•NBC meeting to be held
Food Security
Division and
Cotton Standardization
Implementation of Cotton Control Act Provinces
and introduction of quality based
pricing system for seed and lint cotton
Future Strategy
Proposed Measure
Cotton Leaf Curl Virus (CLCV),
prevailing from last 27 years
Research Funds be allocated
for not only CLCV control but
other cotton related
measures such as Extra Long
Staple, heat and drought
tolerance, water and
pesticide efficiency etc
Stringent Regulatory Regime
(28 regulations of different
kinds) for monitoring and
inspecting of operations of
units. There are also a variety
of local levies which increase
cost of doing business
Simplification of procedures
and collection of levies; One
Window Operation
Federal and
Future Strategy
Proposed Measure
Facilitation to
GSP Plus Cell to monitor
performance and to facilitate
the exporters
Textile Industry
Dedicated Textiles and Clothing
Events be held in EU countries
and in Pakistan
Textile Industry
merce Division
Special Funds to be
allocated by Finance