ISLAMABAD: Despite overall trade deficit, trade balance with European Union has been in favour of Pakistan for the last two years. Main component of exports to EU states and other countries is textile products. This has been a result of vigorous pursuance of policy of focusing on search of new markets in Europe.
Sources at the Ministry of Commerce told Customs Today that the total value of Pakistani textile products exported to EU member countries stood at $5,126.87 million and $5,226.46 million for the financial years 2014-15 and 2015-16, respectively.
The total value of textile products imported from EU member states stood at $2,561.7 million and $3,146.7 million for financial years 2014-15 and 2015-16 respectively. UK and Germany were the first and second largest export destinations for Pakistani textile products.
The source said that comparison showed slight increase in the exports to EU in respective years whereas there is huge increase in the value of imports from these countries in the said fiscal years. The exports increased by almost $99.59 million whereas imports soared up to around $585 million.
The source observed that as a result of award of GSP Plus status to Pakistan, exports to European Union increased from $6.21 billion in 2013 to $7.54 billion in 2014. This was an increase of $1.32 billion which represented an increase of 21 percent. The textile sector was facing custom tariffs ranging from 6.4 percent to 12 percent, leather sector up to 6 percent and footwear up to 6 percent. “Various sectors, which were facing high customs tariff, have now duty free access to the EU states,” the sources said, adding that the GSP Plus status has helped Pakistani products become more competitive in the market because of the zero tariff regime.
Keeping the sensitivity of the European markets in view, the source said that the government reduced markup rate on long term financing facility from around 11.4 percent to 9 percent to allow export sector industries to make investments on competitive basis. This was further brought down to 6.0 percent in 2015.
