GSP+ to continue

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It’s a great relief that reports that the European Union (EU) might end Pakistan’s GSP+ status upon expiry in about a year have not turned out to be true and the European Commission (EC) has, instead, extended the facility till 2024. That means the $1-1.5 billion in export revenue that this scheme has been getting us every year since 2014 is not going to be compromised at least till the end of this electoral cycle. This is going to give the government much-needed breathing room since any pressure on exports at this point in time, when it is trying to grow the economy out of its troubles, would have sent the current account deficit through the roof.
Yet this scare also shows that Islamabad is going to have to pull its socks up with regard to the type of legislation that the EC requires in countries that it does trade with. And such initiatives would be to Pakistan’s advantage because once they are undertaken nobody would be able to point any fingers at our human rights rules or where the state places the press and minorities. Perhaps even more importantly, such steps would open even more export markets for Pakistan, which is always welcome.
Hopefully the government would have learned from mini-crisis, of sorts, not to delay crucial matters any longer. All the while uncertainty about the future of the GSP+ window was allowed to build, exporters were in an agonising fix about future operations; whether or not to take more credit from the banking sector and expand plants for more exports to the EU, etc. A lot of them hesitated because they didn’t want to commit to large investments only to find the target market struck off the list. Now, they will have a clear direction to follow till at least 2024. Therefore, the government is expected to start work on the future of the deal after that year right now, regardless of whether or not it will be in power at that time. The EU market absorbs 34 percent of Pakistan’s exports; and GSP plays a very big part in it. Therefore, everything should be done to nurture and expand it.