GSP PLUS STATUS
PAKISTAN WILL GET IT AFTER RATIFYING 27 HUMAN RIGHTS CONVENTIONS BEFORE 2014. IT WOULD ADD UP TO 13.5 PER CENT IN EXPORTS ANNUALLY TO THE EUROPEAN UNION.
June 25 - July 1, 2012
Pakistan's trade deficit is anticipated to cross $21 billion mark during the financial year 2011-12 against an estimated target of $14 billion. The high trade deficit is partially due to the worsening economic situation in international market and surging prices of oil and other imported goods.
The analysts and experts are of the opinion that prices of textile commodities dwindled in international market, which reduced the country's exports level, while on the other hand, oil prices increased in international market.
According to the Pakistan Bureau of Statistics (PBS), the country's trade deficit has expanded by 37.21 per cent during the eleven months (July-May) of the outgoing financial year 2011-12. Trade deficit was registered at $19.433 billion in July-May against $14.163 billion in the similar period last year.
Pakistan exports registered a negative growth of over three per cent during the eleven months of the outgoing financial year, as they were recorded at $21.5 billion in the period under review against the $22.4 billion of the same period last year. On the other hand, imports rose 12 per cent in one year, as they were recorded at $40.9 billion against $36.551 billion.
Pakistan's oil import bill was surged by 43.52 per cent to reach $12.583 billion during the first ten months (July-April) of the outgoing financial year against $8.768 billion in the same period a year ago.
According to the latest figures released by PBS, the split-up of $12.6 billion oil import disclosed that country imported petroleum products worth of $8.355 billion, indicating rise of 70 per cent when compared with $4.9 billion.
In the meantime, the import of petroleum crude increased by 9.89 per cent to $4.228 billion during the period under review against $3.848 billion of the comparable period.
According to the official figures, the exports are planned to grow by five percent to $25.8 billion in the coming financial year. Meanwhile, the imports are suggested to increase by six per cent to $38.1 billion from $36 billion.
Pakistan is hopeful of getting market access to European Union markets by gaining Generalised Trade Preferences (GSP) plus status to be decided in 2013.
Due to the Eurozone crisis, Pakistan's exports to EU witnessed a negative impact. However, duty free market access on 75 Pakistani products in EU markets would help mitigate this negative impact and Pakistan's exports will be on the rise.
Pakistan is following export target of $25.8 billion this year and trends in exports are positive. Compared with exports, imports have witnessed 17.7 per cent growth mainly due to the increase in oil import bill, which was due to the increase in crude oil price, which has touched the mark of $124 per barrel.
Pakistan has fixed an ambitious textile export target of $25 billion till 2014 in the five-year textile policy and the government is fully supporting the industry to achieve this target.
The textile policy 2009-14 announced by the government of Pakistan also allows various incentives including concessional financing to encourage capital investment in value added textile sector. The government has also withdrawn customs duty and sales tax on import of plant and machinery by the manufacturing industries.
Under the new development, Textile City project has been launched in Karachi with the modern facilities besides garment cities in Karachi, Lahore, and Faisalabad and an industrial park in Karachi.
GSP status plus that Pakistan will get after ratifying 27 human rights conventions before 2014 would add up to 13.5 per cent in exports annually to the European Union.
By 2014, the factors impeding productivity of the textile sector in Pakistan would be addressed in the next 18 months.
Assumingly, exports in next two years growing at 10 per cent per annum in the textile items that are qualified for concession would reach euro 500 million by the end of 2013. If Pakistani exports achieve highest possible growth rate, the export of qualified textile items would double to one billion euros in five years from 2014. In this way, the large deficit in trade that is prevalent currently may decline in the near future.