Great expectations amid encouraging environment

Editorial Feb, 20 2024
Great expectations amid encouraging environment
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Pakistan is one of the major exporters of textiles. In 2021, Pakistan received a record 19.9 billion dollars, which is more than half of the country's total exports.

Due to the disastrous floods in 2022, the cotton crop was badly affected, which led to severe difficulties for the textile industry in 2023, but the efforts of the people associated with this sector in obtaining raw materials proved fruitful and 2024 started in encouraging conditions.

According to the data released by the National Bureau of Statistics, textile exports in January 2024 reached one billion 450 million dollars after an annual increase of 10.10%, which was one billion 320 million dollars in the same month last year, while on a monthly basis this increase was 3.33%. The percentage is Pakistan has a large tradition of cottage industries of textiles which are a source of livelihood for millions of families.

In addition, they are a major source of raw material for large industries. In this sense, Pakistan's textile industry is based on a strong structure and this is the reason why the textile sector has played a major role in managing the ups and downs that the country has faced economically in the last 76 years.

Due to the tough economic program of the IMF and inflation and low foreign exchange reserves on the other hand, this sector is fighting for its economic survival. A few months ago, the commerce ministry had announced that the government would soon offer regionally competitive energy prices to textile exporters and help them solve their problems by issuing pending tax refunds.

The expectations of the textile sector from the government for its survival and development and if they are justified, arrangements should be made for their fulfillment as soon as possible.

Meanwhile, there is one more good development with regard to increase of our exports. And that is the utilising the Generalized System of Preferences to EU countries.

Just imagine, 34 percent of Pakistan's exports are being absorbed by the EU market and it is mainly due to the GSP plus facility which plays a pivotal role in it. Therefore, an all-out strategy is needed to make it ensure the facility continues and we further expand our exports to the EU market which is an opportunity we must avail in real sense of the word.

Preferences, the countries included in the European Union, in order to support the economic development of more or less 60 developing countries in the world, provide them with the facility to send their exports without duty or on payment of low duty, but it benefits from this. In order to be accepted, these countries have to guarantee the implementation of 27 standards set by the European Union regarding human rights, environment and good governance.

Pakistan has been benefiting from this facility since January 2014 and hence the balance of trade with the European Union is in Pakistan's favor unlike most countries in the world.

The facility was due to expire last year, but  the European Union Parliament voted to extend the current Generalized System of Preferences for developing countries, including Pakistan, to 2027, extending it by four years. The possibility has been clarified, but in this context, in the review report issued by the European Union yesterday, along with praising some reform measures, Pakistan has also been requested to make further reforms through legislation.  Among them are issues of ending forced disappearances, better protection of journalists and reducing the scope of the death penalty in accordance with international standards, while concerns have also been expressed about the political use of corruption accusations and inhumane and humiliating treatment during detention. In its report, the European Union has also called it necessary to create a supportive environment for civil society organizations in Pakistan.

These reforms are undoubtedly indispensable for the improvement of the human rights situation and the promotion of good governance, so the necessary measures should be implemented as quickly as possible in this regard without any delay.

It is to be mentioned here that the EU's GSP is a well-established trade and development policy instrument, which has been in place since 1971. The European Commission in Islamabad from time to time releases updates on this facility.

Pakistan's economy is a major beneficiary of the trading opportunities offered by the GSP. The scheme includes generous tariff preferences, with the most significant benefit being zero duties on two-thirds of all product categories. Pakistan must now make good use of the continuation of this status by expanding our scope of exports.

Due to the challenges faced on the economic front, Pakistan urgently needs to increase its trade relations so that the national economy can stand on its feet.

In this backdrop, any good move regarding the economic uplift brings a sigh of relief to the countrymen.

As the Eu has extended Pakistan's GSP Plus status for another four years, which was to expire at the end of this year, so we need to take full benefit of this facility. The European Union has approved the scheme.  It has decided to introduce new legislation to continue for another 10 years. However, a European official also said that the new terms could prove challenging for Pakistan.

Pakistan is a major trading partner of the European Union, which is a major market for our textile products, especially garments, sheets, towels, hosiery, leather, sports and surgical goods. Efforts are afoot to that all stakeholders should be engaged in lobbying. Now it is the duty of the government to remove all reservations of the European Union by playing an effective diplomatic role in this matter and take steps to take full advantage of this facility.

If the duty free facility ends, Pakistan's exports will be affected which the country cannot afford.

GSP Plus is a scheme that the European Union has given to its member countries and 8 other countries of the world, including Pakistan, which is the first country to benefit from GSP Plus, through which Pakistani products can be exhibited in Europe.

The various benefits which this scheme guarantee include the generous tariff preferences, with the most significant benefit being zero per cent duty on several hundred products under the current regulation.  The new GSP regulation has been applied from last month. And we must make the most of this facility and broaden the scope of our exports which is need of the hour in these testing economic times.

Published in The Daily National Courier, February, 21 2024

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NC Desk
NC Desk https://www.dailynationalcourier.com/author/nc-desk
Daily National Courier is a leading morning English newspaper of twelve pages covering all international and national political developments on 24/7 basis.

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