Page 23 - April-May 2021

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GSP+ status commotion:

Threats and developments

EU parliament’s resolution for reviewing the prefer- ing, Prime Minister stressed that the government
ential scheme for imports from Pakistan has would not compromise on the laws about the finality
triggered some panic across the country, especially of Prophethood. The participants, during the meet-
in the textile sector of Pakistan. The European ing, decided to address the reservations of the
Parliament adopted a resolution demanding European Union. It was also unanimously agreed
Pakistan to allow space for religious freedom. It that the protection of minorities in the country would
urged the EU authorities to review GSP plus status be ensured. The participants, according to reports,
for Pakistan amid the increasing number of blasphe- said the GSP Plus trade agreement has nothing to
my cases. with the blasphemy laws. The meeting was briefed
that Pakistan could lose $3 billion if the GSP Plus
With the spread of Covid-19 in India and Bangla- status is revoked.
desh, Pakistan received the bulk of export orders
from the US and other European countries. Trade In reaction to the development mentioned above,
numbers best tell this story. Though Pakistan’s textile Pakistan had said it was disappointed at adopting
industry also showed some concerns due to the the resolution at the European Parliament on
lockdown threats, the following month saw a quick blasphemy laws in the country. Though there is
recovery as textile units were allowed to reopen and panic in the business community, yet the future is
exports from the sector reported a steady pace. bright. Pakistan’s textile industry is providing textile
items at a cheap rate than other countries. The
The EU is a prominent destination and trading brands switching to other countries in this pandemic
partner for Pakistan as it contributes nearly 34 have fewer opportunities available due to the worst
percent of Pakistan’s total exports. Due to the GSP+ scenario of COVID-19 among competitors like India
status, almost 80 percent of Pakistan’s exports go to and Bangladesh.
the EU. The textile sector is the dominant player in
rising exports to the EU with linen items, towels, Pakistan’s exports are increasing with other coun-
garments, and yarns. The textile industry contributes tries, including the USA and China. There is enor-
over 60 percent to the country’s exports. Hence, it is mous potential to expand the exports further if the
no surprise that the business community is alarmed EU market continues to losing interest or ask for
over the development and underperformed sector at non-realistic actions. Another important strategy shift
the Pakistan Stock Exchange. could be the customer driving approach of the
textile industry. The textile sector should introduce
Prime Minister Imran Khan chaired a critical meeting technical products and market them with appropri-
to discuss a resolution passed by the European ate strategies instead of being customer-driven.
Parliament a few days ago which calls for a review of Though it is time taking, such a shift is inevitable for
Pakistan’s GSP Plus status. Addressing the gather- the survival of the industry.

April/May 2021