EU trade package for Pakistan: textile Ministry seeks clarification of implementation procedure
December 05, 2012
The European Union (EU) exceptional trade package for Pakistan has been implemented, however the implementation procedure for the items entitled 25 percent quantity cap is ambiguous, informed sources revealed to Business Recorder. Textile Industry, the main stakeholder, is in a quandary regarding the implementation procedure of the package, as the EU has yet to issue policy guidelines for the items entitled to quantity cap, sources maintained.
According to the notification, the package is being implemented from November 15, 2012. It further maintains that 75 items at H.S code 8 digit level have been granted duty free market access out of which 64 are of textiles sector. Out of the total 64 textiles items, 16 items are subjected to Tariff Rate Quota (TRQ), while the remaining 48 items are under a 25 percent quantity increase cap based on average of last three years export.
Article 4 titled “Removal of products from the scope of Regulation” states that in the calendar year 2012 or 2013, imports based on customs import data for a product originating from Pakistan and increase in volume by 25 percent or more, as compared to the average of the years 2009 to 2011, that product shall be removed from the scope of this regulation for the remainder of that year. For the purpose of this paragraph, the commission shall be empowered to adopt delegated acts, in accordance with Article 6 to amend Annex 1 to remove that product from the scope of this regulation for the remainder of that year.
An official said that the products have been removed from the Regulation, but no guidelines have been issued pertaining to its regulation or the adoption of delegated acts. The monitoring of quota items is prescribed properly, however, there is ambiguity in items where a quantity cap has been imposed. Textile Ministry has requested the government to seek clarification from EU on the procedure. The Textile Ministry further urged the government to develop focal points amongst Customs and Trade Development Authority of Pakistan (TDAP) on the issue. It also proposed that a marketing campaign in EU may be initiated, which may help Pakistan exporters attain the maximum benefit of preference.
A senior official of the Textile Ministry told Business Recorder that 25 percent quantity cap was not included in the original package. However on the demand of several countries including various EU countries, India and Bangladesh the package has been curtailed. This restriction will hamper prospects of export growth and better price realisation for the country.
The EU had approved trade concessions for Pakistan in a move to help the country recover from July-August 2010 floods, causing nearly $10 billion damage. The EU package, which had to be implemented from January 1, 2011, has been implemented now, which will cover Pakistani export items from cotton sheets to clothing and ethanol.