Dr Riina Kionka, European Union Ambassador to Pakistan, has urged Pakistani exporters not to just depend on textiles to take advantage of the EU GSP Plus status but should endeavour to export non-textile products too. Pakistan has a strong industrial base in leather, surgical and sports goods, for example, and therefore, these sectors must also focus on exports to EU countries. Moreover, Pakistani SMEs are also not benefitting from GSP Plus in real time and it is imperative that efforts must be made to extend GSP Plus to SMEs that are the backbone of the economy, as well as women-led enterprises.
She was addressing the Board of Directors of the Employers Federation of Pakistan and leaders of various Textile Associations at a luncheon meeting hosted in her honour by EFP. Husnain Iftakhar also attended the meeting, EU Senior Economist and Trade Advisor, Muhammad Feroz Alam, EFP Vice President, Majyd Aziz, EFP Former President, Syed Nazar Ali, EFP Secretary General, Pietr Buszta, EU Counsellor and Head of Trade, EFP Directors Humayun Nazir, Hasnain Mazher, Sadaf Hatif, and Mustafa Diwan, and Masood Naqi, Yasin Siddik, Shaikh Shafiq and Muzzamil Hussain, etc. from the Textile Associations.
The European diplomat disclosed that due to certain reasons, it was decided to technically rollover the current GSP Plus status for all eight countries for up to four more years till 2027. She, however, cautioned that if the reasons for this rollover are resolved before the four-year timeline, then the EU Parliament may ask the eligible exporting countries to re-apply for the next decade long GSP Plus status. She advised the exporters as well as the government to maintain vigilance and ensure full compliance of the conditionalities of GSP Plus and must take into account the fact that despite the continuation of the benefits, there would be no free rides during the next four years.
Dr. Kionka also informed that the EU Monitoring and Evaluation team had visited Pakistan in summer 2022 and its report was issued in October 2023. The good news for Pakistan is that the team gave positive reviews of environment and governance but mixed reviews on Human Rights, Freedom of Association, Blasphemy Laws, Rights of Minorities, Labor Inspection, Child Labor, and Trade Unions formation. She added that the next visit of the team would be in June 2024.
She appreciated the initiatives of EFP in Gender Equality and Women Empowerment, Disability, National Skills Passport, Occupational Safety and Health, Social Dialogue, and Compliance Tools. She emphasized that Human Capital Development, Gender Equality and Women Empowerment, Green Economy, and Green Skills, are priorities of the EU also.
Husnain Iftakhar, EU Senior Economist and Trade Advisor, informed that the UNICEF sponsored Child Labor Survey has been completed by the Punjab and Gilgit-Baltistan Labor Departments, but for other provinces including Sindh, the Survey results are still pending. He advised that before applying for the next GSP Plus status, it is mandatory upon the Pakistan government to submit a work plan and give a timeline on targets at Federal and Provincial levels. Moreover, the burning issue of gender gap in salary and wages needs to be addressed on a fast track.
Muhammad Feroz Alam, EFP Vice President, in his welcome remarks, informed the legal aspects, composition, and mandate of EFP and stated that EFP is the only Pakistani member of International Organization of Employers and the sole employer constituent of ILO. Therefore, it is a custodian of all International Labor and Environment Standards and over the past seven decades has been espousing the cause of positive industrial relations, human resource development, and promoting, protecting and projecting the interests and rights of the private sector.
Majyd Aziz, EFP Former President, informed that EFP has the honor to host the current and previous EU Ambassador and that it is imperative that EFP be properly introduced to diplomats. He said that in 2022, EFP formed a GSP Plus Committee to monitor and create awareness of the progress of the status. He added that GSP Plus has served to stimulate the exports of manufactured products in the long-term, but despite limitations, it has had borderline utility for Pakistan. The envisioned target of $15 billion exports to the EU has not been achieved and it has only reached less than $9 billion. However, it has given impetus to social and human rights impacts, and it is imperative that exporters fully comply with conditionalities.
“Pakistan’s historical trajectory of economic growth is characterized by a fluctuating performance and a number of missed opportunities. Pakistan has recurrently availed itself of the borrowings from external sources, friendly countries, as well as massive domestic borrowing. Private sector has also been burdened with excessive increases in rates of electricity, gas and high inflation. GSP Plus status is therefore extremely crucial for the national economy even though all 27 conditionalities are not fully complied with.”
Majyd Aziz requested EU collaboration, cooperation, and support for awareness raising projects on addiction to drugs in industries and academia, green skills training programs, and gender equality projects and programs. He also offered the services of EFP whenever needed by the EU and requested that EFP should also be under the radar of the EU for future initiatives.
Syed Nazar Ali, EFP Secretary General, gave a detailed presentation on the introduction, initiatives, activities, achievements, and way forward of EFP and highlighted the progress on International Labor and Environment Standards. He disclosed that EFP is preparing the Gender Equality Policy, the Social Contract Policy, the Occupational Safety and Health Policy, the Pakistan Business Disability Network, and the National Skills Passport.
Representatives from the Textile Associations informed that retailers and brands of foreign countries regularly get third party audits done of the Pakistani exporters and it is incumbent upon exporters to fully comply with all conditionalities. They added that the cost of compliance is high and since SMEs rarely depend upon external financing, it is difficult for them to invest and be fully compliant.
They also added that at times, new measures are introduced by the EU and these send shockwaves to the exporters. They also said that usually Pakistani exporters get orders due to spillover of exports by competitive regional countries such as India and Bangladesh. They also referred to the plethora of Labor Laws prevailing in Pakistan and the need to reform the Labor Law legislations. Moreover, frequent visits by Labor, EOBI, SESSI, etc., inspectors also hamper the working of the industries. They are also irked by the attitude of the government that does not fully support and encourage exports of non-traditional products. They added that there is a need for a comprehensive Digital Marketplace platform in order to promote and project Pakistani exportable products.