PRGMEA Hails Commerce Ministry’s Role In Retaining GSP Plus For Another 2 Years

LAHORE – Appreciating the role of commerce ministry the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) on Sunday welcomed the European Union decision to retain the GSP plus status for Pakistan for another two years, stressing the need for an aggressive marketing plan to exploit this huge opportunity of enhancing exports to EU countries.

“The apparel sector appreciates the efforts of Advisor to Prime Minister on Commerce and Industry Razzak Dawood, Secretary Commerce Sardar Ahmad Nawaz Sukhera and the whole team of Commerce Ministry,” said PRGMEA Chief Coordinator Ijaz Khokhar.

Ijaz Khokhar said that the International Trade (INTA) Committee of EU Parliament has extended the Generalised System of Preferences-Plus status for Pakistan, enabling the country to continue to enjoy preferential duties on exports for the next two years. While this facility has been available to Pakistan since Jan 2014, its continuation is an award for Pakistan’s progress in enacting new laws and developing new institutions for implantation of 27 core conventions of GSP-Plus, especially the National Action Plan for human rights.

He said that in view of the outcome of 3rd Biennial Review of GSP so far, the PRGMEA would like to commend the efforts of the government especially the commerce ministry, which coordinated with other ministries, federal and provincial departments to formulate policies and laws so that 27 conventions related to GSP Plus could be fully implemented.

He said that Pakistan’s exports to the European Union have enhanced from 4.538 billion Euros since the grant of GSP Plus in 2014 to 7.492 billion Euros in 2019, registering an increase of 65% which is not so significant.

“We could not take full advantage of the GSP plus benefit, primarily due to lack of solid marketing plan to improve our exports.”

PRGMEA coordinator said that the renewal of GSP+ status for another two years is a golden opportunity which our exporters could exploit and make most out of it in order to meet export target. He said that value-added textile sector has been the main driver of the economy for the last 50 years in terms of foreign currency earnings and jobs creation. There is no alternative industry or service sector other than textile that has the potential to benefit the economy with foreign currency earnings and new jobs creation.

“We have not made any marketing plan before and after granting of the GSP facility. We have no clear road map to increase our share under GSP facility available.” The PRGMEA chief coordinator said that a close consultation with the stakeholders needed to determine issues being confronted by the industry and then to suggest measures to ensure its viability and competitiveness in the international market.

Ijaz Khokhar also stressed the need for enhancing the product lines of our exports and for that purpose some incentives should also be announced by the government for the motivation of our exporters, he added.

“Currently the garment sector has a limited product line for export market due to non-availability of the latest fabric locally. Foreign buyers demanding new garments based on G3, G4 and Technical fabric material. We need to offer more diversified products to take benefit from the GSP Plus.” Ijaz Khokhar said.

Another key challenge is the 17% sales tax on exporters, as almost every exporter’s 45-60% cash liquidity is blocked due to this taxation, which is major hurdle in exports growth. Value-added textile sector leader urged the Prime Minister to immediately restore zero-rating of sales tax to fully exploit the GSP Plus facility for the country.

Also, he appealed to the PM to direct the FBR for instant release of refunds otherwise thousands of SMEs will close down, which will create an economic fiasco affecting all segments of the economy.

He asked the government to identify textile as a key priority area, setting the right policies and incentives that encourages private sector investment in value addition.

Regarding extreme cash flow crunch he observed that the government has given assurance to clear all pending claims, but the factual position is that more and more refund claims are piling up. The government should announce a clear policy to finally clear all the pending refund claims, he demanded.–PRESS RELEASE