Depending on the economic vulnerability criteria, the EU provides unilateral trade preferences to eligible developing countries under the generalized system of preferences (GSP) in addition to duty free quota free market access for the least developed countries. A higher level of preferences under the GSP arrangement is the GSP plus scheme which provides deeper tariff preferences to the EU for developing countries on about 66% tariff lines. However, to get the GSP plus status, a developing country must meet certain eligibility criteria including ratification and effective compliance with 27 international conventions on human rights, environment and labor rights.
Pakistan was a GSP beneficiary in the past; however to assist it in getting the GSP plus status, the TRTAII Programme commissioned an internationally peer reviewed research study in 2012 with the objective to assess the case of Pakistan viz a viz meeting the eligibility criteria for the GSP plus status. The study also conducted sectoral analysis and highlighted the benefits from the scheme should Pakistan gets the GSP plus status. This was followed by holding a PPD and production of a policy recommendation paper in 2013 to initiate a national debate for the needed reform for GSP plus eligibility.
After the grant of GSP plus status to Pakistan effective 01 January 2014, it was realized that there is a need to develop capacity of stakeholders to enhance benefits from the scheme and to remain compliant with the scheme for its continuity. The SMEs particularly found it difficult to understand the scheme or get benefit from it due to their limited capacity. Since the GSP plus scheme only provides tariff preferences, compliance with the Non Tariff Measures (NTMs) including preferential rules of origin is mandatory. Understanding of these requirements was particularly difficult for the SMEs and the new exporters, to understand. Accordingly, a Business Guide on GSP plus scheme was commissioned under Component 1 in consultation with relevant stakeholders in Pakistan to build capacity of the SMEs on the scheme and procedures for exporting to the EU. The Guide was also translated in Urdu, for easy understanding.
The production of the Guide and its dissemination was followed by holding trainings on the EU GSP plus scheme and the Guide in four cities of Pakistan. Two international experts from EU delivered the trainings which were attended by 517 stakeholders from public and private sector in total. 1050 copies of the Guide in Urdu and English were distributed during the trainings and the participants were trained on the use of the Guide.
A detailed database of the invitees was prepared in order to invite the most relevant stakeholders. Logistics were arranged and relevant Chambers of Commerce and Trade associations were involved in the trainings. To mention a few, the training were held in association with the Karachi, Lahore, Faisalabad, and Sialkot Chambers, the Government of the Punjab, and sectoral trade associations such as PREGMEA, PAKSEA, Textile mills Association, Fruits and vegetables producers and exporters Association, such as Footwear Association and Pakistan Dairy Association, with a total of 517 stakeholders attending these trainings. In order to further reach the public at large, wide media attention was given with 54 English and Urdu newspapers, 6 TV channels and radio Pakistan (in Karachi) that covered the trainings.
The trainings and the Business Guide were particularly focused at the SMEs as they face difficulties in understanding the GSP plus scheme as well as export procedures for exporting to EU under the preferential regime. The trainings and the dissemination of the Business Guide will enable new exporters particularly SMEs to export to EU under the GSP plus scheme.
While speaking at the trainings at Karachi, Lahore, Faisalabad and Sialkot, the presidents of the respective Chambers of Commerce and Industry stressed the need to develop the capacity of private sector on the GSP plus scheme in addition to developing infrastructure and overcoming energy crisis”. Emphasizing the need to focus on value-addition which was the only way forward towards raising Pakistan’s exports to European Union, they pointed out that despite being the 4th largest producer of cotton in the world, the country has not been able to convert its local produce into value-added products.
Mr. Arif Anwar Baloch, Secretary Industries, Commerce and Investment Punjab and Mr. Farhan Aziz Khawaja Secretary Labor and Human Resources Punjab, emphasized that the business Community should step up their production and marketing efforts to get maximum benefit from the market access opportunity granted to Pakistan under the EU GSP plus scheme. They stressed public and private sector collaboration to enhance competitiveness and augment exports to EU. They highlighted the efforts of Punjab government and their collaboration with the Component 1 of TRTA II programme in connection with the GSP plus scheme.
While speaking at the occasions, the representative of ITC/EU TRTA II programme Mr. Moammad Owais Khan, Programme Officer highlighted the purpose of training sessions on EU GSP Plus scheme. He informed about the initiatives of ITC under the EU funded TRTA II programme and the recent publication which covers five sectors of export interest to Pakistan in addition to information about the scheme. He said that this training session would certainly help Pakistani exporters better understand and benefit from GSP plus scheme.