ISLAMABAD: The Ministry of Commerce is making preparations to move a step forward by transforming the GSP Plus status into free trade agreement (FTA) with the European Union.
In all, 406 members of the European Parliament supported the move at a session in Brussels on December 12, 2013 and granted GSP-Plus status to Pakistan on December 12 last year. It was considered as a move to boost the textile and other industries’ exports’ duty-free access to 27 European countries. Under the deal, 75 Pakistani products would have duty-free access to European markets as the GSP-Plus status allowed almost 20 percent of Pakistani exports to enter the EU market at zero tariff and 70 percent at preferential rates.
Free trade agreements are somewhat different because FTA’s eliminate tariffs, import quotas, and preferences on most goods and services traded between the member countries. If people are also free to move between the countries, in addition to FTA, it would also be considered an open border. It can be considered the second stage of economic integration.
Countries choose this kind of economic integration if their economic structures are complementary. If their economic structures are competitive, it is likely there will be no incentive for a FTA, or only selected areas of goods and services will be covered to fulfill the economic interests between the two signatories of FTA.
“The Ministry of Commerce is making preparations to move a step forward by transforming the GSP Plus status into free trade agreement (FTA) with the European Union. The preparations are at consultative stage and file work is being done,” a well-placed source on Saturday disclosed to Customs Today, saying that the Ministry was committed to achieving the milestone for the sake of national interest.
“To achieve this target, high-level exchanges are likely to take place in coming days, especially from Pakistani side to convince EU members through coordinated lobbying and convincing sessions,” the source further revealed. According to the source, upcoming visit of Commerce Minister Khuram Dastgir to the Netherlands is also a part of mutual consultative process.
It is pertinent to note here that the Pakistan government also had to made strenuous efforts to convince EU members to obtain GSP Plus status. At present, some 62 free trade agreements are being implemented among different countries of different regions of the world. However, there are seven FTAs that have been negotiations and signed by the respective head of states but not yet ratified by the countries legislative body.
