The document discusses Pakistan's Generalized Scheme of Preferences Plus (GSP+) status with the European Union. Some key points: 1. GSP+ provides duty-free access to the EU market for certain goods from developing countries that ratify and implement 27 international conventions related to human and labor rights. 2. Pakistan was granted GSP+ status in 2014, significantly increasing its textile exports to the EU. However, non-textile exports saw less growth. 3. Maintaining GSP+ involves regular reporting on and effective implementation of the 27 conventions. Pakistan's compliance will be reviewed by the EU in early 2016. 4. While benefiting the economy, GSP+ also

1. ASSIGNMEMENT No:-2
Topic: GSP &GSP+
Presented by Tayyba Aslam
Reg;Fa-18-ECO-008

2. What is the Generalized Scheme of Preferences?
Background to the GSP:
 Almost 50 years ago, the United Nations Conference on Trade and Development
asked developed countries to help developing countries integrate into the world
economy.
 The EU's Generalized Scheme of Preferences (GSP), created following UNCTAD
(United_Nations_Conference_on_Trade_and_Developmen) recommendations in
1971.
Purpose:-
• helps developing countries (DC) by making it easier for them to export their
products to the European Union.
• This is done in the form of reduced tariffs for their goods when entering the
EU market.
• Through the additional export revenue which is generated, the GSP fosters
growth in their income and supports economic growth and job creation.

3.  It does not have the ambition or the possibility to tackle other problems faced by developing countries.
The European Union’s GSP covers three separate regimes:-
 The standard GSP, which provides preferences to 16 (previously 177) Developing Countries and partial
 The GSP is a specific instrument focusing on a single dimension only: tariff preferences for trade in goods.
removal of customs duties on two third of tariff lines.
 Special Incentive Arrangement for Sustainable Development and Good Governance, or "GSP+“
zero duties for essentially the same 66% tariff lines for countries which ratify and effectively
implement core international human rights, labor rights and other sustainable development and good
governance conventions. On 1 April 2014, there are 13 beneficiaries and now 8 countries.
 Everything But Arms, or "EBA" special arrangement for the Least-Developed Countries (LDCs) -
full duty-free, quota-free access for all products except arms and ammunition. As of 1 April 2014,
there are 49 beneficiaries and now 32 countries.

4. Conditions Attached to GSP+ Status:-
The EU awards this status to those developing countries which qualify for the following criterion:
• They do not classify as high or upper-middle income countries.
• Their export earnings are below the two percent of EU’s total GSP imports
• The beneficiary countries should have signed, ratified and implemented 27 international conventions
pertaining to social compliance, including human rights, labor rights, environment and good governance.
• GSP+ status will be awarded for a period of 10 years.
• GSP+ status is not extended automatically, countries have to apply and will be qualified if they meet the
eligibility criteria.
• Under GSP+, 6274 tariff lines are eligible, of which 6269 are duty free. Textile products are classified as

5. GSP PLUS IN PAKISTAN:-

6. • In January 2014, the EU granted GSP+ status to Pakistan.
• Pakistan has prepared a report on its progress toward improved human and labor rights,
sustainable development, and good governance. The report will be tabled in January
2016 and Reviewed by the European Parliament in early 2016.
• Both the previous government Pakistan People's Party (PPP) and Pakistan Muslim
League Nawaz (PML-N) worked to secure Pakistan's GSP+ status.
• According to the Ministry of Finance, Pakistan's exports to the EU witnessed a 21%
increase in its first year under GSP+ status. Yet, while GSP+ status has quickly yielded a
significant impact on Pakistan's economy, its good progress towards improving human
rights.

7. Products covered Under GSP+ Status:-
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.
Metals Nickel, Aluminum, Zinc etc.
Equipment Microwave ovens, Video recorders etc.
Vehicles Motorcycles, Bicycles etc.
Value Added Products Cotton products, Flour etc.
others Cigarettes, soaps etc.

8. More specifically, by accepting GSP+ status, Pakistan has committed to maintaining the
ratification of 27 relevant conventions and ensuring their effective implementation.
 Accepting without reservation the reporting requirements imposed by each convention
and regularly monitoring and reviewing the implementing record of relevant monitoring
bodies.
 Cooperating with the European Commission's monitoring procedures.
Therefore, GSP+ status not only offers Pakistan an opportunity to
Improve its economic situation, but also creates a space for the realization of enhanced
human and labor rights protection in Pakistan.

9. IMPACT OF GSP+ STATUS ON ECONOMY:-
• Through its GSP+ status, Pakistan is eligible to export around 78% of its 4 products free of duty to the EU's 28 member
countries. This represents almost 20% of Pakistan's exports globally. In the past, Pakistan has struggled to compete in EU markets
because its competitors, such as Bangladesh, Sri Lanka, Turkey and Morocco, had already secured duty-free access to these
markets.
• With its newly acquired GSP+ status, Pakistan is now the third largest textiles and garment-exporting country in Asia that
possesses duty-free access to EU markets. This status has provided Pakistan with a unique opportunity to strengthen its textile
industry and consolidate a large market share.
• Pakistan's qualification as a GSP+ beneficiary has helped to increase exports and provided the country with a greater potential to
attract investment and generate employment. The status also offers Pakistan an opportunity to make progress on working
conditions, labor right and gender equity.
• The EU has become one of Pakistan's largest trading partners. Between July 2014 and March 2015, 20% of Pakistan's total
exports entered the European Union. The top five EU countries that received imports from Pakistan were the United Kingdom,
Germany, France, Spain and Italy.

10. Impact on Textile Exports:-
Pakistan exported USD 5.9 billion worth of textile goods to the EU in 2014 (May 2014-May 2015) Although GSP+ status
seems to have affected the overall growth of exports, the data clearly indicates that the textile and garment industries have
enjoyed the overwhelming majority of the growth, accounting for USD 1.03billion or 76% of the total growth of
Pakistan exports to the EU in 2014.

11. Non-Textile Exports:-
• While Pakistani textile products have greatly benefited from the country's GSP+ status, non-
textile products exported to the EU in 2014 have proven largely unable to utilize the status to its
full potential.
• Non-textile sectors experienced 17% growth between May 2014 and May 2015, which was
lower than the total annual average.
• This slower rate of growth can in part be attributed to the fact that many of the industries
outside of the textiles sector were unaware of their products' inclusion in the GSP+ system.
• .Responding to concerns regarding over-reliance on a single sector, the EU has launched trade
diversification programs designed to reduce Pakistan's reliance on the textiles and clothing
sector.

12. From 2006 to 2016, EU28 imports from Pakistan have almost doubled from €3,319 to €6,273 million. The growth of
imports from Pakistan has been particularly fast since the award of GSP+ (€5,515 million in 2014)
-
List of Conventions to qualify for 'GSP Plus‘:-
1. International Covenant on Civil and Political Rights
2. International Covenant on Economic Social and Cultural Rights
3. International Convention on the Elimination of All Forms of Racial
Discrimination
4. Convention on the Elimination of All Forms of Discrimination Against
Women
5. Convention Against Torture and other Cruel, Inhuman or Degrading Treatment
or Punishment

13. 6. Convention on the Rights of the Child
7. Convention on the Prevention and Punishment of the Crime of Genocide
8. Minimum Age for Admission to Employment (N° 138)
9. Prohibition and Immediate Action for the Elimination of the Worst Forms of Child
Labor (N° 182)
10. Abolition of Forced Labor Convention (N° 105)
11. Forced Compulsory Labor Convention (N° 29)
12. Equal Remuneration of Men and Women Workers for Work of Equal Value
Convention (N° 100)
13. Discrimination in Respect of Employment and Occupation Convention (N° 111)
14. Freedom of Association and Protection of the Right to Organize Convention (N° 87)
15. Application of the Principles of the Right to Organize and to Bargain Collectively.
Convention (N° 98)

14. 16. International Convention on the Suppression and Punishment of the Crime of
Apartheid
17. Montreal Protocol on Substances that deplete the Ozone Layer
18. Basel Convention on the Control of Trans boundary Movements of Hazardous
Wastes and Their Disposal
19. Stockholm Convention on persistent Organic Pollutants
20. Convention on International Trade in Endangered Species
21. Convention on Biological Diversity
22. Cartagena Protocol on Biosafety
23. Kyoto Protocol to the UN Framework Convention on Climate Change
24. UN Single Convention on Narcotic Drugs (1961)
25. UN Convention on Psychotropic Substances (1971)
26. UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic
Substances (1988)

15. 27. Mexico UN Convention Against Corruption
• According to the Federal Ministry of Commerce, responsibility for Pakistan's
compliance with six of the conventions falls under the responsibility of the Federal
Ministry of Law and Justice, and Ministry of Human Rights.
• The EU reviews a country's status of compliance with the 27 treaties every two years.
Its first review of Pakistan is scheduled for January 2016.
Challenges to Pakistan:-
 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.
 Volatile prices of raw materials.
 Difficulty in achieving the required market standards,
 To implement and maintain the 27 conventions set by EU.

16. Recommendations:-
In order to fully maximize the GSP Plus status, Pakistan needs to increase its exports to the EU.
This can be done in multiple ways:-
• The country can find export markets in other countries of the EU, increase its export of
finished products rather than raw materials, diversify the product base for export by introducing
new products.
• Raw material supply should be insured in a stable manner with lesser volatility in prices,
skilled manpower should be made available to produce good quality products at lower costs.
• We should be investing in new technologies to bring efficiency in production, reducing the
cost of production, providing better infrastructure and insuring reliability of the supply chain.
• This will ensure reliability of the supply, diversify exports, employment and create wealth.

17. Thank You