impact of GSP plus on pakistan economy.

1. GSP PLUS AND ITS IMPACT ON PAKISTAN
ECONOMY.
 History of GSP
 What is GSP?
 Type of gsp
 What is gsp plus?
 Eligibility for GSP plus
 Impact of GSP PLUS
 Challenges
 conclusion

2. Baluchistan university of information
technology and management science
Quetta.

4. HISTORY OF GSP
► Developing nations not benefiting from trade.
 Export of only commodities.
 GATT authorized developed nation to discriminate developing
nation while imposing lower tariff.
 In 1971 EU first apply lower tariff for developing nations on import.

5. WHAT GSP MEANS ?
► GSP stand for “ generalized scheme of preferences”
► No reciprocal concession under which developed
countries allow duty free or low entry to imports from
selected developing countries.
► Preference treatment is given in the from reduce or zero
rate of custom duty and it’s specifically design to benefit
certain developing countries and to integrate them in the
world economy.

6. TYPE OF GSP
 The standard GSP scheme.
 The “GSP+” enhanced preference.
 EBA ( everything but arms) for least developed
nations.

7. WHAT IS GSP+?
 The GSP plus means full removal of tariffs on the same
product categories as those are covered by the general
agreement.
 these are granted to countries which ratify and
implement international conventions relating to human,
labor rights, and good governance.

8. NOTE
 GSP+ is only awarded for 10 years.
 GSP+ status is not extended automatically countries
have to apply and will be qualified if they meet the
eligible criteria.
 Under GSP plus 6274 tariff lines are eligible of which
6269 are duty free the country is declared vulnerable.

9. GSP PLUS ELIGIBILITY CRITERIA
 GSP plus granted to countries which ratify and implement
27 specified international conventions.
 Under take to maintain the retification of the conventions
such as labor, human rights and to maintain good
goverence.
 The country is decleared vulnerable.

10. VULNERABLE COUNTRY MEANS
 which is not classified by the world bank as a high income
country during three consecutive years.
 Whose exports to the EU are heavily concentrated in a few
product.
 low level of export is the EU and contribute less then 2% in
GSP covered import.
 less diversified as 75% of its export focus on few sector of EU.

11. DOES PAKISTAN QUALIFY FOR GSP+?
 Pakistan export contribute at 1.6% of EU globle GSP
imports.
 94% of Pakistan exports concentrate only 7 sector of
products.
 Pakistan is a low income country specified by world bank.
Pakistan qualified!!

12. Products cover under GSP+
 Category Products
 Livestock & Meat Horses, Pigeons, Rabbits etc.
 Dairy Products Yogurt, Butter etc.
 Vegetables Potatoes, Onions, Cabbages etc.
 Fruits Banana, Pineapple etc.
 Dry Fruits Dates, Pistachios, Almonds etc.
 Other Edibles Eggs, Honey, Vinegar preserved etc.
 Seeds Vegetable, oil seeds etc.
 Oils Palm oil, Soya bean oil etc.
 Chemicals Hydrogen, Sulfur, Citric Acid etc.
 Textile Cotton, Silks, etc.

14. IMPACT ON PAKISTAN ECONOMY
 The EU ( European Union) is Pakistan's largest trading
partner after the United States.
 GSP Plus would allow Pakistani exports to enter the 28
member countries of EU.
 Market of 500 million consumers is now open for Pakistani
exports.

15. CONT…
 Cotton and Textile products are the largest exporting
sectors of Pakistan.
 Pakistan has edge over its Competitors (China, India,
Vietnam, Thailand, Indonesia). They do not have duty
free access as well as no preferential access.
 Pakistani textile exports are expected to get double.

16. CONT…
 Moreover an additional US $97.1 million can be
earned in leather products.
 Massive employment opportunities would be created
in many industries after the grant of GSP Plus status.
 An additional US$ 280 million can be earned in knitted
and woven apparel, 14.5% of current exports of
products within the 6% threshold.

17. CONT…
 Pakistan exports to the EU, 72 different goods and
that increased the growth in export 15.76 % ( $333.18
million) in previous year,2014.
 After GSP Plus scheme, from January to April, 2014,
was $2,446.52 million, which was $2113.34 million in
2013.In the first four month of 2014, the export in
textile was $300 million.
 The export increased in the 2014 from $5.3 billion to
$6.38 billion, which is 20% more than previous year.

18. CONT...
 Thousand of jobs will be created in due to the
revival of industries, which help people to better
fight with inflation.
 Reduction of unemployment, increasing CPI
lead to economic growth and stability.

19. POLITICAL VIEWS ABOUT GSP+
 According to finance minister ishaq dar stated,
 GSP PLUS will increase our export by $2 billion per annum.
 PM Nawaz sharif said,
 Award of GSP plus status shows confidence of the
international markets on the excellent quality of Pakistani
products.
► This will enable Pakistan to export more than $1 billion worth
of products to the international markets. Only the textile
industry will earn profits of more than Rs 1 trillion per year.

20. OPPORTUNITY FOR PAKISTAN
 Pakistan has edge over its Competitors (China,
India, Vietnam, Thailand, Indonesia). They do
not have duty free access as well as no
preferential access.
 To maintain a long lasting relation with EU by
exporting high quality products.
 To develop industrial sector by focusing on
products exported duty free.

21. CHALLENGES
 Chronic energy shortages.
 High cost of production.
 Less competitiveness in international markets.
 Almost 50% of the textile units in textile city of
Faisalabad have been shut down due to cuts in gas
and electricity supply

22. CONT…
 Volatile prices of raw materials.
 Difficulty in achieving the required market
standards.
 Higher costs of certification.
 To implement and maintain the 27 conventions set
by EU.

23. CONCLUSION
 With the present status of Pakistan
economically which doesn’t perform well
during last decade there is a hope that
Pakistan economy espically in textile sector
after qualifying for GSP Plus and enhance a
long tern economic growth.

24. Thank you!!