MAINTAINING THE STATUS AND ENHANCING TRADE WITH EUtrtapakistan.org/wp-content/uploads/2016/01/BEYOND... · 1 import data for EU28 Member States. The adopted methodology was that of

THE PROGRAMME IS IMPLEMENTED BY UNIDO IN ASSOCIATION WITH ITC & WIPOTHE TRTA II PROGRAMME IS FUNDED BY THE EUROPEAN UNION

PITAD IS THE FOCAL POINT FOR THE TRTA II PROGRAMME

The International Trade Centre implemented the Trade Policy Capacity Building Component of the European Union funded TRTA II programme. It is aimed at the Ministry of Commerce and Government of Pakistan in developing a coherent trade policy and attendant regulations for export competitiveness. Specifically, it will aim to reinforce the skills of government officers working in trade related ministries and implementing agen-cies on issues related to trade policy, commercial diplomacy and regulatory reform. The main way in which to achieve this through the institutional capacity building of key local training institutes, which is intended to have an immediate effect on the capacity of government officers working on trade policy issues.

In addition, Component 1 promotes comprehensive, regular and well informed public-private dialogue among the government, private sector and civil society for trade policy development, monitoring and evaluation. To promote local ownership and legitimacy of the dialogue, a steering committee comprising equal representa-tion of the public and private sectors has been established with the formal approval of the Ministry of Com-merce of Pakistan. Its mandate is to oversee the planning, implementation and monitoring of public-private dialogue on key issues. To better inform the public-private dialogue process, research studies are commis-sion and internationally peer reviewed before dissemination to stakeholders. After extension of the TRTA II programme, Component 1 was assigned the additional responsibility of building the institutional capacity of the Competition Commission of Pakistan (CCP).

The targeted interventions of Component 1 to achieve these goals constitute the following:

Result for Component 1: Coherent trade policy and regulatory reform for export competiveness

1. The Pakistan Institute for Trade and Development (PITAD) institutional capacity is strengthened.2. PITAD’s and other research institutes’ expertise on trade policy strengthened.3. Government officers’ capacity on specific trade policy and international trade negotiations strengthened.4. Research studies contributing to the development of a national export strategy conducted.5. Public-private dialogue for a coherent national export strategy is fostered.6. Institutional Capacity of CCP is strengthened.

For further information about the ITC implemented Component 1 and the TRTA-II programme visit: http://trtapakistan.org

TRADE RELATED TECHNICAL ASSISTANCE PROGRAMME

BEYOND THE GSP PLUS STATUS

MAINTAINING THE STATUS AND ENHANCING

TRADE WITH EU

Photos: © Thinkstock.com

Address: Trade Related Technical Assistance (TRTA II) Programme, Programme Management Office (PMO), 7th Floor, Serena Business Complex, Khayaban-e-Suharwardy, Sector G-5/1, Islamabad, Pakistan

Telephone: +92 51 8354 810

Fax: +92 51 2600 124

E-mail: [email protected]

Internet: http://trtapakistan.org

For enquiries and further details about Component 1 contact: Khalid Hanif, Programme Officer (Trade Policy), International Trade Centre (ITC), EU funded TRTA II programme, Islamabad, E-mail: [email protected]

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BEYOND THE GSP PLUS

STATUS:

MAINTAINING THE STATUS AND

ENHANCING TRADE WITH EU

BEYOND THE GSP PLUS STATUS - MAINTAINING THE STATUS & ENHANCING TRADE WITH EU

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iii

PREFACE

Pakistan was allowed special market access to the European Union (hereinafter, the EU) through the Generalized System of Preferences Plus (hereinafter, GSP Plus) Scheme, with effect from 1 January 2014. Having completed nearly two years utilizing this special market access tool, it is now important to look back, and make an assessment as to the impact that this preferential market access scheme has had on Pakistani exports to the EU. Analysis from the impact assessment would help in providing insights as to how to maximize and maintain the benefits emanating from the EU’s GSP Plus Scheme.

This study was carried out as part of the Trade Policy Capacity Building Component, implemented by the International Trade Centre (ITC), of the European Union Trade Related Technical Assistance (TRTA II) Programme, which aims at strengthening the capacity of Pakistan to participate in international trade.

Tippu Sultan, Consultant, wrote this study. He is entirely responsible for the views expressed in this report. Paolo R. Vergano, Partner at Fratini Vergano - European Lawyers, was the peer reviewer of this study. The study was overseen by Mohammad Owais Khan, Programme Officer, Trade Policy, ITC, TRTA II, Islamabad, and Jean-Sébastien Roure, Senior Officer, Business and Trade Policy, ITC, was the overall supervisor.

This is an empirical study, utilizing EUROSTAT1 import data for EU28 Member States. The adopted methodology was that of comparing of pre- and post- scenarios. Calendar Year (CY) 2013 is taken as the pre-GSP Plus year, and is compared with CY 2014, the post-GSP Plus period, when the tariff preferences granted to Pakistan had been utilized for one full year. By taking out direct extracts from the EUROSTAT through its COMEXT2 feature, the comparison moves forward. Further, by rationalizing these extracts, tables are formed to display value (EURO), and quantity (100 KG) of imports. It is acknowledged that simple weight does not capture the quality of most products for comparing per unit prices. However, it has been utilized wherever appropriate for certain products, in order to look at the price per unit comparison with competitors in the EU market. The data highlights Pakistan’s products, which are doing significantly well in the EU market, and is also indicative of further export products, which may, with more support from the policymakers, make significant inroads into the EU market.

Finally, we thank the Ministry of Commerce and TDAP (Trade Development Authority of Pakistan) for their overall support as well as active involvement in a public private consultative process, whose findings informed this study.

1 EUROSTAT is the statistical office of the European Union situated in Luxembourg. Its task is to provide the European Union with statistics at European level. 2 COMEXT is a EUROSTAT feature for extracting detailed external trade data from its database.


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TABLE OF CONTENTS PREFACE ..................................................................................................................................................... III ABBREVIATIONS ......................................................................................................................................... 6 INTRODUCTION ........................................................................................................................................... 7 DISTINGUISHING FEATURES OF GSP PLUS ........................................................................................... 8 UTILIZATION ANALYSIS ........................................................................................................................... 11 FEEDBACK FROM EXPORTERS .............................................................................................................. 14 IDENTIFYING POTENTIAL EXPORT PRODUCTS ................................................................................... 16 THE 27 UN CONVENTIONS ....................................................................................................................... 42 CONCLUSIONS AND RECOMMENDATIONS .......................................................................................... 44 ANNEX 1: QUESTIONNAIRE FOR EXPORTERS ..................................................................................... 52 ANNEX 2: MAIN FINDINGS FROM QUESTIONNAIRES .......................................................................... 53 ANNEX 3: BUSINESS PERSONS INTERVIEWED .................................................................................... 55 ANNEX 4: RATIFIED UN CONVENTIONS UNDER GSP + ....................................................................... 56 ANNEX 5: LIST OF EU 28 MEMBER STATES .......................................................................................... 57

Table-AA: Comparative table ........................................................................................................................ 8 Table 6: Vulnerability analysis (for Pakistan) .............................................................................................. 10 Table 4: Utilization of preference regime ..................................................................................................... 12 Table 5: Comparing Export Growth in the current year 2015 ...................................................................... 13 Table 2: Euro 50 million plus sections ......................................................................................................... 16 Table 7A: Section 11b – Knitted readymade garments (Knitted RMG)....................................................... 16 Table 7A(1): Knit RMG – Competitor analysis ............................................................................................ 18 Table 7B: Section 11b – Woven readymade garments (Woven RMG) ....................................................... 19 Table 7B (1): Woven RMG - competitor analysis ........................................................................................ 20 Table 7C: Section 11b –Home textiles ........................................................................................................ 21 Table 7C (1): Home textiles-Competitor analysis .................................................................. 22 Table 8: Section 11a- Textiles ..................................................................................................................... 23 Table 8 (1): Textiles – Competitor analysis ................................................................................................. 24 Table 9: Section 8b- Leather products ........................................................................................................ 24 Table 9 (1): Leather products – Competitor analysis .................................................................................. 25 Table 10: Section 20 –Seats, toys, sports equipment ................................................................................. 25 Table 11: Section 8a- Leather & hides ........................................................................................................ 26 Table 12 (1): Surgical & medical instruments/appliances –competitors ...................................................... 27 Table 12: Section 18 – Surgical & medical instruments/appliances ............................................................ 27 Table 13: Section 7a – Plastics ................................................................................................................... 28 Table 13 (1): Plastics – Competitor analysis ............................................................................................... 29 Table 14: Section 15b – Base metals & articles of base metals ................................................................. 29 Table 15: Section 12a – Footwear............................................................................................................... 30 Table 15 (1): Footwear – Competitor analysis ............................................................................................ 32 Table 16 A (1): Sugars & sugar confectionery: Competitor analysis ........................................................... 33 Table 16A: Section 4b- Sugars & sugar confectionery................................................................................ 33 Table 16B: Section 4b – Cooked products .................................................................................................. 34 Table 16C: Section 4b –Prepared fruit & vegetable products ..................................................................... 35 Table 16D: Section 4b –Beverages, spirits & vinegar ................................................................................. 35 Table 17: Section 16 – Electrical & mechanical appliances ........................................................................ 36 Table 18: Section 5 –Mineral products ........................................................................................................ 37


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Table 18(1): Mineral products - Competitor analysis ................................................................................... 37 Table 19: Section 2b – Vegetables & fruits ................................................................................................. 38 Table 3: Fastest growing product groups (sections) ................................................................................... 39 Table 20: Section 1b - Fish .......................................................................................................................... 39 Table 21: Section 9a – Wood articles .......................................................................................................... 39 Table 22 – Section 9b – Cork articles ......................................................................................................... 40 Table 23 – Section 14 – Gold silver jewellery ............................................................................................. 40 Table 24 –Section 15a- Ferro alloys / Articles of iron & steel ..................................................................... 40 Table 25 – Section 17b – Parts & accessories of rail, aircrafts, boats ........................................................ 41 Table 26: Dissecting Section 11b data ........................................................................................................ 44 Table 27: Key policy .................................................................................................................................... 49


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ABBREVIATIONS

Ch Chapter Number of the Harmonized System of Tariffs

CN Combined Nomenclature used in the EU Tariff Code

COMTRADE United Nations Commodity Trade Statistics Database

EBA Everything but Arms

EC European Commission

EU European Union

EUROSTAT European Statistical System of the European Commission

FTA Free Trade Agreement

GSP European Union’s Generalized System of Preferences

HS Codes Harmonized Systems Code for Tariffs

ILO International Labour Organization

IPR Intellectual Property Rights

LDCs Least developed countries

MFA Multi-Fibre Agreement

MFN Most favoured nation

NTBs Non-tariff barriers

Pak Pakistan

PET Polyethylene terephthalate

PSQCA Pakistan Standards and Quality Control Authority

SMEs Small and medium-sized enterprises

SMEDA Small and Medium Enterprises Development Authority

SPS Sanitary and Phytosanitary Measures

TBT Technical Barriers to Trade

TDAP Trade Development Authority of Pakistan

TPO Trade Promotion Organization

TSO Trade Support Organizations

TRTA Trade Related Technical Assistance

UN United Nations


7

INTRODUCTION

Since 1971, the (then) European Community (now EU) has been granting trade preferences to developing countries under the arrangement titled the Generalized Scheme of Preferences (GSP). This scheme has continuously been improved upon with a view to better support the developing nations in enhancing their trade, and as a consequence their development. After the Lisbon Treaty3 a strong need was felt to redesign the GSP Regulation to reflect the reinforced role of the European Parliament in trade policy. It was agreed that GSP was no longer adapted to the current global landscape, and required to be updated to better focus on those countries most in need, which are the low and lower middle income countries. The scheme needed to promote core principles of sustainable development and good governance and also enhance legal certainty and stability.

Following this realization, in 2012, a new GSP scheme was introduced, which focused preferences exclusively on those countries that needed them the most. The number of GSP beneficiary countries was thus nearly halved from the earlier 176 countries. While remaining “eligible” the upper middle income developing countries ceased to receive preferences, and were no longer “beneficiary” countries. Moreover, it was realized that some developing countries, despite having low per capita income, still had successful export sectors for many industries. These industries (e.g., textiles, chemicals, leather goods) were competitive worldwide at the highest level, and did not need preferences to successfully penetrate world markets. A “graduation”4 mechanism was devised to withdraw preferences from those particular competitive sectors. The new GSP scheme maintains the core principles behind graduation, while correcting some anomalies by increasing product sections from 21 previously to 32,5 while graduation no longer applies to GSP Plus, but only to the GSP (general management).

In this study, we focus on the distinguishing features of GSP Plus from the other two sub-groups of the new GSP scheme, namely the Everything But Arms (EBA) scheme, and the GSP general arrangement. Pakistan was granted GSP Plus status from Calendar Year (CY) 2014. Utilizing the official data source of the EU, the EUROSTAT, the study looks at how Pakistan has made use of the GSP Plus Scheme in its first completed year, and which products have shown export growth potential. The study also examines the critical condition to maintain eligibility for GSP Plus status – implementing of the 27 U.N. Conventions6 on labor, human rights, and environment. The study concludes with suggestions and recommendations that could help Pakistan maintain its GSP Plus status, while enhancing its trade with the EU.

3 The Treaty of Lisbon, signed by the European Union (EU) Member States on 13 December 2007, is an international agreement, which amends the two treaties that form the constitutional basis of the EU. 4 Graduation means that imports of particular groups of products (sections) and originating in a given GSP beneficiary country lose GSP preferences. Graduation applies when the average amounts of a section from a country exceeds 17.5% of GSP imports of the same products from all GSP beneficiary countries during three years (the trigger is 14.5% for textile and clothing). 5 The 32 sections (or product groups) are listed in Annex IX of the EU Regulation 978. 6 The 27 conventions are listed in Annex VIII of EU Regulation 978.


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DISTINGUISHING FEATURES OF GSP PLUS

Prior to 1 January 2014, Pakistan was exporting to the EU Member States under the older version of the GSP scheme. The EU Regulation 978,7 dated October 25, 2012, repealed the previous regulations governing GSP imports as a new scheme of generalized tariff preferences was put into place. This Scheme consists of a general arrangement and two special arrangements, namely: a special arrangement for least-developed countries (called Everything But Arms (EBA)), and a special incentive arrangement for sustainable development and good governance (called GSP Plus). While the EBA arrangement includes Afghanistan, Bangladesh, Cambodia and others,8 the GSP Plus beneficiary countries include Pakistan, the Philippines, Armenia, and a short list of a few more countries.9

Which of the three arrangements confers the greatest benefit?

In descending order of benefit, the EBA arrangement confers the highest benefit, followed by the GSP Plus scheme, and then comes the general GSP arrangement, as may be observed from the comparative table below:

Table-AA: Comparative table

SCHEME FEATURE

What item included for duty free entry?

Any quantitative restrictions?

Which countries qualify?

Graduation from sections

EBA Everything except Arms & Ammunition No Only least developed

countries No

GSP-PLUS

Only specified list of items (Annex IX of Regulations 978) allowed duty free

Quantitative ceilings exist, beyond which safeguard measures are triggered

Only “vulnerable” countries falling in low income developing countries

No

GSP (General Arrangement)

Only “Non-Sensitive items” as per (Annex-V of Regulation 978 allowed duty free

“Sensitive items” have quantitative restrictions

Only for eligible developing countries Yes

Observing the above comparative table, the EBA arrangement is clearly the most advantageous one, not only in terms of allowing the beneficiary country’s exports to enter the EU duty-free, but also by allowing all goods duty-free except arms and ammunitions. The GSP Plus scheme, while allowing a very large number of items to enter the EU duty-free, places growth ceilings on certain sectors, like agriculture and fisheries. Similarly to GSP (general arrangement), the list of items allowed duty-free entry is further shortened and only goods classified as “non-sensitive” enjoy the facility.

However, as compared to the old GSP regime that Pakistan was previously exporting under, the present GSP Plus arrangement entitles Pakistan to a significant margin of preference. For example, under the pre-2014 arrangement, Pakistan’s textile made-ups exports faced a 9.6% tariff in the EU. Since January 1, 2014 Pakistan’s textile made-ups enter EU28 Member States duty-free (like Bangladesh and Cambodia’s products), while textile made-ups from Pakistan’s competitors like India and China face custom duties of 9.6% and 12%, respectively. Pakistan thus enjoys a significant margin of preference for textile made-ups over its competitors (like China, India and Vietnam), while it has a level playing field with its LDC competitors (like Bangladesh and Cambodia).

7 http://trade.ec.europa.eu/doclib/docs/2012/october/tradoc_150025.pdf 8 Annex IV of Regulation 978 lists the countries included in this special arrangement for least developed countries, commonly known as the EBA arrangement. 9 Annex III of Regulation 978 lists the countries included in this special incentive arrangement for good governance and sustainable development, commonly known as the GSP Plus.


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What are the salient features of the GSP Plus arrangement, and how does it work?

Which products are included?

Annex IX of the Regulation 978 lays out the list of products, which Pakistan (and other beneficiary countries included in the GSP Plus arrangement) are allowed to export duty-free to the 28 EU Member States.10 The list of such products is split into 32 sections, wherein each section is formed so as to group similar items in one section. For example, S-11a (Section 11a) groups together chapters of Common Custom Tariff from chapter 50 to chapter 60, a total of 11 chapters, all relating to textile items. Similarly, S-11b (Section 11b) groups together chapters 61, 62, and 63 of the Custom Tariff, into a section of Textile Apparel and Made-ups.

How do safeguards work?

While there are General Safeguards11 applicable to all three schemes under the new GSP, there are also certain specific safeguards in the textile, agriculture and fisheries sectors. Products from chapters from 1 to 24 of the Common Custom Tariff (related to agriculture and fisheries) may be subjected to special surveillance to avoid any undue disruption in the Union market. For Textiles (sections S-11a and S-11b), while there are safeguards on exceeding growth ceilings in GSP (general arrangement), there is no such limits to growth if a country is a GSP Plus beneficiary country. A safeguard would, however, apply to a section (or a group of products) en bloc, and not to individual products at 6- digit or 8-digit level. The only exceptions are some specific chemical products12 , to which the quantitative safeguards apply, if exported by a GSP Plus beneficiary country.

Which items are not included for duty-free treatment?

No products from the following chapters of the Common Custom Tariff are included in the specified list of items allowed duty-free access: chapters 14 (vegetable products), 26 (metal ores), 30 (glands, organs, blood, vaccines, and medicaments), 47 (wood pulp), 48 (paper and newsprint), 49 (printed books), and 93(weapons).

Rules of Origin and ‘Cumulation’:

To benefit from the tariff preferences under GSP Plus, the products shall ‘originate’ in a beneficiary country. The Rules of Origin covering the definition of the concept of originating products are laid out in detail in EC Regulation 1063 of 18 November 2010. However, most relevant to Pakistan, is the concept of ‘regional cumulation’. Cumulation implies that, when a product is made in one of a designated regional group of countries, the product shall be considered to originate in the beneficiary country if the unprocessed product is acquired from another member of the same regional group. The Regulation has designated four regional groups for this, and Pakistan falls in Group III, whose other members are Bangladesh, India, Sri Lanka, Nepal, Bhutan, and Maldives. Thus, for example, in case of knitted readymade garments (Knitted RMG), if a Pakistani manufacturer imports knitted fabric from India, converts it into a knitted RMG, and exports it to the EU, the exported product would be considered to originate in Pakistan. Least developed countries (like Bangladesh, for example), however, have an advantage in that they may import knitted fabric from anywhere in the world, convert it into a knitted RMG, and then export it duty-free to EU. It would be considered a product originating13 in the LDC despite the imported knitted fabric from any worldwide source.

Where does Pakistan stand on the “Vulnerability” criterion to remain eligible for GSP Plus?

10 The list of current EU28 Member States is placed at Annex-5 11 Where a product originating in a beneficiary country, is imported in volumes and/or at prices which cause, or threaten to cause, serious difficulties to Union producers of like or directly competing products, normal Common Customs Tariff duties on that product may be reintroduced. 12 These products are : 3814-0090 (prepared paint or varnish removers, not based on butyl acetate),3824-9097 (prepared binders for foundry moulds), 3820-0000 (anti-freeze preparations),2207-1000 (undenatured ethyl alcohol), 2207-2000 (denatured ethyl alcohol), 2909-1910 (ethyl ether). 13 Annex 13a to the EC Regulation 1063 specifies the “List of Products and Working or processing Operations which confer Originating Status” for different product groups.


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Table 6: Vulnerability analysis (for Pakistan)

PERCENT_VULNERABILITY YEARS

2009 2010 2011 2012 2013

PERCENT_VULNERABILITY 5.49 5.36 5.42 4.82 5.23 PERCENT_DIVERSIFICATION 94.21 94.76 94.83 94.71 94.88

A country may qualify for GSP Plus if it is considered to be ‘vulnerable14’ due to a lack of diversification and insufficient integration within the international trading system.

Looking at the above Table 6, it appears that Pakistan would continue to be classified as a vulnerable country as its diversification percentage is well above the minimum required to qualify, lying around 95% in 2013. Also the Percent Vulnerability for the country is hovering around 5% (as seen in Table 6), and hence there is no immediate concern of not meeting this criterion for entitlement to GSP Plus status.

Other requirements to qualify for and maintain GSP Plus status:

There are some other noteworthy aspects of the GSP Plus arrangement. First, that it is a ten year arrangement, and would last till December 31, 2023. Second, as it may be noted from the title of this GSP Plus arrangement – Special Incentive Arrangement for Sustainable Development & Good Governance – it is a unilateral granting of this status by the EU to a beneficiary country, which agrees to the binding undertaking to maintain ratifications of the relevant international conventions and to ensure effective implementation of these 27 conventions15, on human rights, environment, labor rights, corruption, and drug trafficking. The beneficiary country is bound to participate in and cooperate with the monitoring and review of its implementation record. Every two years, starting with January 1, 2016, the European Commission shall present to the European Parliament and to the Council a report on the status of ratification of the relevant conventions, the compliance of the GSP Plus beneficiary countries with any reporting obligations under those conventions and the status of the effective implementation. If it is found that the beneficiary country is not respecting these binding obligations, the special incentives under the GSP Plus arrangement would be withdrawn. The burden of proof of showing compliance with obligations is upon the beneficiary country.

14 A vulnerable country means a country (a) of which, in terms of value, the seven largest GSP sections of its imports into the Union of products listed in Annex IX of EC Regulation 978, represent more than the threshold of 75% in value of its total imports of products listed in that annex, as an average during the last three consecutive years; AND (b) of which the imports of products listed in Annex IX into the Union represent less than the threshold of 6.5% in value of the total imports into the Union of products listed in that Annex originating in countries listed in Annex II, as an average during the last three consecutive years. 15 The 27 Conventions are listed in Annex 4


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UTILIZATION ANALYSIS

Analysing Utilization of the Scheme through pre-/post Comparison for Pak Exports

To assess the utilization of the GSP Plus arrangement, we undertake a pre-post scenario, comparing the year 2013 (pre-GSP Plus) with the year 2014 (post-GSP Plus). Table 1 below, lays out the EU import data from Pakistan:

Table 1: Pak exports to EU (Section-wise)

EU IMPORT FROM PAKISTAN AND EXTRA EU REGION16 VALUE IN EUROS GROWTH AND SHARE IN %

Extra - EU import Import from Pakistan Share Growth 2014 2014 2013 2014 2013

TOTAL (00) 1,680,223,081,523 5,502,137,116 4,538,217,203 0.33 0.27 21.24

Sub total 1,487,590,392,778 5,153,590,779 4,201,107,054 0.346 0.28 22.67

Sections S-1a Live animals and animal

products excluded fish 274,689,139 0 120 0 0.00004 -100

S-1b Fish, crustaceans, molluscs and aquatic invertebrates

16,458,879,500 2,920,926 592,939 0.004 392.62

S-2a Live plants and floricultural products 1,610,645,798 70,202 76,268 0.004 0.005 -7.95

S-2b Vegetables and fruit 10,625,446,812 52,469,050 62,883,912 0.49 0.65 -16.56 S-2c Coffee, tea, mates and

spices 9,521,532,728 7,068,141 5,931,082 0.074 0.065 19.17

S-2d Cereals, flour, nuts, resins and plaiting 9,358,454,376 8,826,506 8,566,788 0.094 0.083 3.03

S-3 Animal or vegetable oils, fats and waxes 6,605,467,969 121,196 109,928 0.002 0.002 10.25

S-4a Meat, fish, crustaceans, molluscs preparations 4,251,118,319 0 0 0 0 0

S-4b Prepared foodstuffs (excl. meat and fish), beverages, spirits and vinegar

20,497,011,345 68,083,474 77,821,034 0.332 0.404 -12.51

S-4c Tobacco 2,668,359,771 407,727 2,983,766 0.015 0.115 -86.34 S-5 Mineral products 444,284,930,967 52,901,292 808,643 0.012 0 6441.98 S-6a Inorganic and organic

chemicals 40,426,997,643 113,019 251,297 0.0003 0.0006 -55.03

S-6b Products of the chemical industry (excl. inorganic and organic products)

30,379,156,243 4,290,615 4,871,413 0.014 0.016 -11.92

S-7a Plastics 33,845,317,325 76,469,932 45,171,924 0.226 0.141 69.29 S-7b Rubber 15,805,854,534 5,062,066 6,015,366 0.032 0.039 -15.85 S-8a Raw hides and skins and

leather 2,698,873,623 105,546,445 93,680,913 3.91 3.65 12.67

S-8b Articles of leather and fur skins 10,998,139,532 348,035,906 319,072,862 3.164 3.12 9.08

S-9a Wood and wood charcoal 10,219,993,293 610,753 70,265 0.006 0.001 769.21 S-9b Cork, straw and plaiting 445,760,880 133,005 1,044 0.03 0 12639.94 S-11a Textiles 17,370,483,766 795,314,969 769,081,577 4.58 4.68 3.41 S-11b Textile Clothing & Made-

ups 81,681,844,190 3,095,542,082 2,378,548,352 3.79 3.179 30.14

S-12a Footwear 17,149,609,248 72,795,926 56,289,218 0.424 0.359 29.32 S-12b Headgear, umbrellas, sun

umbrellas, sticks, whips, feathers and down

2,521,230,893 3,425,919 2,762,874 0.136 0.124 24

S-13 Articles of stone, ceramic 11,341,637,784 6,708,658 4,859,827 0.059 0.048 38.04

16 Imports into the EU region from outside the Union are categorized by EUROSTAT as “Extra EU Region” imports, while trading within the Union is classified as “Intra EU Region” imports.


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products and glass S-14 Pearls and precious metals 55,799,979,184 23,949,553 14,188,841 0.043 0.025 68.79 S-15a Iron, steel and articles of

iron and steel 45,584,748,864 13,000,873 6,831,419 0.029 0.016 90.31

S-15b Base metals (excl. iron and steel), articles of base metals (excl. articles of iron and steel)

33,589,326,214 74,734,907 84,395,850 0.222 0.259 -11.45

S-16 Machinery and equipment 357,176,849,866 55,516,083 28,861,326 0.016 0.008 92.35 S-17a Railway and tramway

vehicles and products 1,493,651,266 28,401 70,449 0.002 0.004 -59.69

S-17b Road vehicles, bicycles, aviation and space, boats and parts thereof

92,743,145,347 16,648,333 9,853,506 0.018 0.011 68.96

S-18 Optical, Watches, Clock and Musical Instruments 60,562,529,558 98,685,670 91,346,833 0.163 0.157 8.03

S-20 Miscellaneous 39,598,726,801 164,109,150 125,107,418 0.414 0.357 31.17 All statistical tables have been extracted or derived using the external trade statistics of the European Commission (EUROSTAT).

The first year of implementation of the GSP Plus arrangement –calendar year (CY) 2014 - shows over 21% growth (in value terms) over calendar year 2013. As can be seen in Table-1, the list of GSP Plus approved items is divided into Sections, grouped together as like products. Numbered from Section 1 to Section 20, these sections total 32 in number. Previously, there were 21 sections in the old GSP arrangement. Table 1 above also indicates growth rates for each section (or product group), over the pre-GSP Plus year 2013. As is the tradition for Pak exports, Textile & Clothing and Leather & Leather Made-ups (sections S-11a, S-11b, S-8a, S-8b respectively), formed the bulk of Pakistan’s exports in CY 2014, comprising nearly 80% share of total export to the EU.

Determining ‘Utilization percentage’

To assess the utilization of the preferential scheme by the exporters, the following extract from Eurostat–Table 4, may be seen:

Table 4: Utilization of preference regime

EU-EXTRA Imports by tariff regime DECLARANT europe28 INDICATORS VALUE_IN_EUROS PARTNER PAKISTAN PERIOD Jan.-Dec. 2014 PRODUCT TOTAL

IMPORT_REGIME/ELIGIBILITY ONLY MFN GSP AND/OR PREFERENCES UNKNOWN

U10 MFN ZERO € 402,679,444 € 78,850 U11 MFN NON ZERO € 51,540,059 € 286,086,201 U70 ANY PREFERENCE ZERO € 4,599,387,843 U71 ANY PREFERENCE NON ZERO € 7,190,679 UZZ UNKNOWN € 92,560 € 28,896,511 € 14,444,620

Preference Utilization = (U70+U71) / ( U11+U70+U71) = 93.17%

The above Table 4, was extracted from Eurostat, using COMEXT. As per this Table, in terms of value of exports from Pakistan to EU28, 93.17% of the exports utilized the tariff preference regime.

Comparing Pakistan’s CY 2015 export growth to other Developing Countries

The following, Table 5, is to present a comparative statement of the latest available data, to show the growth trend for Pakistan and other comparable countries, regarding their exports into EU over the period January to April 2015.


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Table 5: Comparing Export Growth in the current year 2015 Value in Euros

PARTNER PERIOD

Jan-Apr 2014 Jan-Apr 2015 increase growth%

EXTRA EU28 552,023,725,763.00 568,821,152,968.00 16,797,427,205.00 3.0

PAKISTAN 1,789,934,650.00 2,018,557,485.00 228,622,835.00 12.8

PHILIPPINES 1,789,555,010.00 2,203,140,958.00 413,585,948.00 23.1 SRI LANKA 842,150,363.00 911,172,251.00 69,021,888.00 8.2

INDIA 12,626,611,090.00 13,955,899,431.00 1,329,288,341.00 10.5

BANGLADESH 4,101,828,448.00 5,188,684,296.00 1,086,855,848.00 26.5

From the above Table 5, Pakistan’s export growth seems to be slowing down, as compared to the growth in CY 2014. For a 4-month period of CY 2015, the growth rate has been 12.8%. The depreciating EURO, when Pak rupee is appreciating, has been a major contributor to the slowing export value, to the EU. This trend may continue, as the European Central Bank is pressing on with Quantitative Easing, thus virtually printing a trillion EURO during the period March 2015 to September 2016.


14

FEEDBACK FROM EXPORTERS

Interviews were conducted with exporters, during which a questionnaire17 was completed by the exporters. The product sectors covered were: Garments, Leather, Electric Fans, Plastic Caps, Surgical Instruments, Salt, Rice, PET Resins, Fabrics, Curtains, Bedwear, Gems & Jewellery, Sugar Confectionery, and Fruit.

Exporters of Leather articles, and Gems & Jewellery were of the view that there would be no impact of GSP Plus for their sector, as these articles were already duty free under the old GSP program. The companies that filled in the questionnaire mentioned that they had increased both machines and manpower to increase the production. However, this growth could not be attributed to GSP Plus facility, and was in the general nature of growth of their business.

A fan manufacturer stated that Pakistan has great potential in the sector of domestic fans in Europe. However, the biggest hurdle was the acquiring of CE-marking, without which no fan could be sold in Europe. The letters ‘CE’ appear on many products traded in the extended Single Market in the European Economic Area (EEA). They signify that products sold in the EEA have been assessed to meet high safety, health, and environmental protection requirements. Though the CE marking is not a mandatory certification, it is voluntarily used by producers to show compliance with the relevant EU standards and technical regulations. It nevertheless requires an undertaking by the importer that the overseas manufacturer has met all the EU safety standards and specification for the product. The fan manufacturer was of the view that an undertaking by an EU recognized company still required a pledge that the manufacturer had met the standards required by EU. There was no company in Pakistan which could provide such undertaking or verification for fans manufactured in Pakistan. Specific support by the Government of Pakistan may be able to help arrange for specialized companies to provide the undertaking on behalf of leading producers of fans in Pakistan.

Garment manufacturers indicated that they were facing supply-side problem. All the required certification is already available in Pakistan and most of them are compliant of the EU buyers’ and legal requirements. Pakistan Readymade Garments Manufacturers & Exporters Association was of the view that, in order to get the maximum benefit from GSP Plus, Pakistan should devise a GSP Plus focused program as part of the export policy. A general trade policy could not assist the exporters in increasing their production and exports. Some garment manufacturers blamed the high cost of labour in Pakistan (minimum US $ 120 per month), as compared to Bangladesh (minimum $70 per month), for example. They also complained of the high energy cost, unavailability of gas, and water. Delay in getting the refund of sales tax, and custom duties18, has led to a backlog of over 100 billion rupees (at the time of this study), which had hurt the exporters’ liquidity position. Some of the entrepreneurs privately expressed reluctance in enhancing production facilities for GSP Plus, because they felt that Pakistan may – in a couple of years- puncture the 6.5% Vulnerability ceiling and thus may not remain eligible for the GSP Plus status.

However, one of the larger firms, which is producing Home-Textiles, stated that they had increased their business in Europe because of GSP Plus, and thus enhanced production capacity by increasing machines, as well as manpower. This shows a diverse set of opinions within the industry.

The majority of the Surgical and Dental Instruments manufacturers have mentioned that the high cost of compliance is the biggest issue in accessing the EU. An exporter of PET Resins, mentioned that the product is already zero rated under normal GSP, but a 4% Countervailing Duty is imposed on products from Pakistan. This has placed Pakistani companies in a disadvantageous position. Moreover, competition in the EU market has greatly increased as both Turkey and Egypt have developed surplus capacities of PET production.

Exporters of Rice, Salt, Plastic Caps and Liquid level Gauges have submitted filled in questionnaires and mentioned that they face no specific procedural issues in exporting to Europe. The Rice exporter

17 Sample of questionnaire placed at Annex-1; list of interviewees at Annex 3. 18 These duties are paid on the imports for manufacturing goods for exports. Once the goods have been exported, these exporters file claims for refund of these levies.


15

was unaware of the custom duty paid by the importer, as was the Salt exporter. However, Salt exports to the EU were on the rise, and hence the exporter was increasing production. Exporter of Plastic caps and Liquid level Gauges mentioned that under GSP Plus the duty was now zero. However, the increased demand was such that it could be met through more intensive use of existing machines and manpower.

Regarding the implementation of 27 Conventions (required under GSP Plus; list placed at Annex D), most businessmen were not specifically aware of the Treaty Implementation Cells (T.I.C.s) set up at the Ministry of Commerce, and in all four provinces. Businesspeople were generally aware of the eight (8) conventions pertaining to labor laws and standards (out of the 27 conventions for GSP Plus).

Brief and tabulated information received from exporting companies and Associations is placed at Annex-B.


16

IDENTIFYING POTENTIAL EXPORT PRODUCTS

In order to identify high potential export products, the approach adopted here is to first identify the best performing sectors in the first completed year for Pakistan under GSP Plus. Sections (product groups) with export over EURO 50 million in CY 2014 were selected. Second, the sectors with fastest growth over the previous year, over 50%, were short-listed for more detailed examination. Table 2 lists the EURO 50 Million Plus sections, while Table 3 lists those Sections (or product groups) –in descending order- that show promise with most rapid growth in CY 2014, as compared to the previous CY 2013.

Table-2 below lists the EURO 50 Million Plus sections. Textile made-ups (Section 11b) head the highest performing sections (or group of products), followed by the Textiles group and Leather made-ups, which has been a traditional pattern of Pak exports to the EU. Together, these first three Sections comprise over 80% of the value of Pakistan’s exports to the EU. However, besides these traditionally strong product groups, some new sections –amongst the EURO 50 Million Plus list- are showing great potential, and have utilized the preferences offered by the GSP Plus arrangement to rapidly grow their markets shares.

Table 2: Euro 50 million plus sections

S-11b – Textile Apparel and Made-ups 3,095,542,082 S-11a- Textile 795,314,969 S-8b- Articles of Leather 348,035,906 S-20- Furniture 164,109,150 S-8a- Leather & Hides 105,546,445 S-18- Medical & Surgical Instruments 98,685,670 S-7a- Plastics 76,469,932 S-15b- Base Metals & Articles 74,734,907 S-12a- Footwear 72,795,926 S-4b- Prepared Foods 68,083,474 S-16- Electrical & Mechanical Machinery 55,516,083 S-5- Minerals, cement, Fuels 52,901,292 S-2b- Vegetables, Dry Fruit, Fresh Fruit 52,469,050

Starting from the top performing Section 11b (Textile Made-ups), it is immediately obvious that this section out-performs all others by a very wide margin, and has been doing so over many years. Comprising of products in Common Custom Tariff chapters 61, 62, 63, it would be more useful to look at each chapter individually since there are a large number of high performing products within each chapter. Thus we break up the Section into three sub-groups comprising of each of the three chapters. The high potential products are marked in ‘green’ color, in the tables below.

Table 7A: Section 11b – Knitted readymade garments (Knitted RMG)

FLOW IMPORT PERIOD Jan.-Dec. 2014 REPORTER EU28

PARTNER EU28_EXTRA EU28 Extra price p.u. PAKISTAN PAKISTA

N price p.u.

mkt shar

e PRODUCT/INDICATOR

S VALUE Unit (100kg)

euros/100kg VALUE Units(100k

g) euro/100

kg %

61033200 MEN'S OR BOYS' JACKETS AND BLAZERS OF COTTON

€ 60,775,449 40786 1490 €10,702,967 9426 1135 18

61033900 MEN'S OR BOYS' JACKETS OF TEXTILE MATERIALS)

€ 14,878,484 18697 796 € 2,015,673 2653 760 14


17

61034200 MEN'S OR BOYS' TROUSERS, SHORTS OF COTTON

€ 385,683,299 385957 999 €52,113,257 50205 1038 14

61034900 MEN'S OR BOYS' TROUSERS, SHORTS OF TEX. MATERIALS

€ 25,522,207 43212 591 € 2,292,021 2951 777 9

61046200 WOMEN'S OR GIRLS' TROUSERS, SHORTS OF COTTON

€1,420,962,358 1165113 1220 €42,543,173 40414 1053 3

61046900 WOMEN'S/ GIRLS' TROUSERS,OF TEXTILE MATERIALS

€ 234,824,834 191209 1228 € 1,246,467 1374 907 1

61051000 MEN'S OR BOYS' SHIRTS OF COTTON, (EXCL. T-SHIRTS)

€1,174,765,899 781541 1503 €59,648,372 49696 1200 5

61052010 MEN'S /BOYS' SHIRTS OF SYNTH. FIBRES (EXCL. T-SHIRTS)

€ 197,299,375 136070 1450 € 6,433,920 8556 752 3

61059090 MEN'S OR BOYS' SHIRTS OF TEXTILE MATERIALS

€ 18,784,054 23142 812 € 6,058,285 7598 797 32

61091000 T-SHIRTS, SINGLETS AND OTHER VESTS OF COTTON

€5,666,505,007 4652090 1218 €57,886,325 57454 1008 1

61099020 T-SHIRTS, SINGLETS OF WOOL OR MAN-MADE FIBRES

€2,384,315,862 1206233 1977 €14,861,059 19602 758 1

61099090 T-SHIRTS, SINGLETS AND OTHER VESTS

€ 317,605,260 184280 1723 € 9,652,197 9499 1016 3

61102010 FINE KNIT TURTLENECK AND PULLOVERS OF COTTON

€ 114,183,442 83762 1363 € 2,719,912 2900 938 2

61102091 MEN'S OR BOYS' JERSEYS, PULLOVERS,OF COTTON,

€1,554,003,107 1065651 1458 €101,460,497 99599 1019 7

61102099 WOMEN'S OR GIRLS' JERSEYS, PULLOVERS,OF COTTON

€ 2,285,052,675 1413934 1616 € 43,725,156 41349 1057 2

61109090 JERSEYS & SIMILAR ARTICLES OF TEX. MATERIALS

€ 157,247,462 174170 903 € 2,919,096 4232 690 2

61159500 LONG STOCKINGS, SOCKS AND OTHER HOSIERY

€ 1,093,673,211 1223907 894 € 79,501,446 106375 747 7

61159699 FULL-LENGTH STOCKINGS, SOCKS AND OTHER HOSIERY,

€ 195,537,224 202831 964 € 3,033,495 2808 1080 2

61161020 GLOVES, IMPREGNATED, COATED WITH RUBBER

€ 277,280,549 351374 789 € 20,288,604 16533 1227 7

61161080 MITTENS AND MITTS, COATED WITH RUBBER

€ 245,210,751 235218 1042 € 24,309,842 20772 1170 10

61169200 GLOVES, MITTENS , OF COTTON, (EXCL. FOR BABIES)

€ 50,629,436 89476 566 € 24,700,006 51594 479 49

61169300 GLOVES, MITTENS , OF SYNTHETIC FIBRES,

€ 201,830,029 133549 1511 € 12,682,564 7692 1649 6

61169900 GLOVES OF TEXTILE MATERIALS (EXCL. OF WOOL,COTTON)

€ 14,372,924 14305 1005 € 1,146,679 1852 619 8


18

Knitted Readymade Garments (RMG) – shown in Table 7A above, is a high potential group of products, as EU28 is a huge market for knitted RMG, importing over EURO 36 billion worth of the product in 2014. Pakistani products have a significant presence in the Knitted RMG market; however, Pakistan is still underperforming in the export of those Knitted RMG products that have a billion EURO plus market (highlighted in green in the table above). On the basis of market size, the following products amongst Knitted RMG are identified as HIGH POTENTIAL products: Women Cotton Trousers, Men Cotton Shirts, T-Shirts of Cotton and Man-Made Fibres, Men and Women Cotton Jersey and Pullover, Socks & Stockings.

To have a closer look, some of the high potential products identified in pre-para, are compared with other competitor countries, in the table 7A(1) below. As it may be seen from the table below, despite being the least per unit cost supplier, Pakistan has a very small share as compared to its non-EU competitors. Therein lies the huge potential for Pakistan’s knit RMG products to significantly increase their share in the EU market.

Table 7A(1): Knit RMG – Competitor analysis Main non-EU competitors

H.S.Code Country mkt share value % Euro / 100kg Tariff Landed Price

Euro / 100kg

61046200 1.5B mkt; women-girls cotton trousers & shorts

China 22% € 997 12% 1116

Turkey 15% € 1,988 0 1988

Bangladesh 26% € 1,079 0 1079

India 10% € 1,369 9.60% 1501

Pakistan 3% € 1,054 0 1054 Lowest

61051000 1B mkt; Mens/boys cotton shirts

China 17% € 1,910 12% 2139

Turkey 12% € 3,169 0 3169

India 12% € 1,688 9.60% 1851

Bangladesh 34% € 1,090 0 1090

Pakistan 5% € 1,200 0 1200 2nd Lowest

61091000 cotton T-shirts over 5B mkt

China 11% € 1,287 12% 1441

Turkey 19% € 2,001 0 2001

India 12% € 1,499 9.60% 1643

Bangladesh 41% € 959 0 959

Pakistan 1% € 1,008 0 1008 2nd Lowest

Sri Lanka 2% € 1625 9.60% 1781

61159500 Cotton Socks China 37% € 700 12% 784

Turkey 41% € 1,179 0 1179 Indonesia 6% € 812 9.60% 890 Pakistan 7% € 747 0 747 Lowest


51

Table 7B: Section 11b – Woven readymade garments (Woven RMG)

FLOW IMPORT REPORTER EU28

PARTNER EU28_EXTRA EU28 Extra price p.u.

euro/100kg

PAKISTAN Pakistan price p.u.

euro/100kg

mkt share

value% PERIOD 2014 2014 2014 2014

PRODUCT/INDICATORS VALUE Quantity VALUE Quantity 62032280 MEN'S OR BOYS' ENSEMBLES, OF COTTON (EXCL. TRACKSUITS)

€ 15,958,981 18486 863 € 3,011,159 3094 973 18.87

62034211 MEN'S OR BOYS' IND. & OCCUP. TROUSERS OF COTTON

€ 66,098,701 168751 984 € 8,504,686 7609 1118 5.12

62034231 MEN'S OR BOYS' TROUSERS AND BREECHES OF COTTON DENIM

€ 2,413,657,360 1699062 1421 € 376,855,178 317690 1186 15.61

62034235 MEN'S OR BOYS' TROUSERS OF COTTON (EXCL. DENIM)

€ 2,092,689,868 1450306 1443 € 112,674,573 83113 1356 5.38

62034290 MEN'S OR BOYS' SHORTS OF COTTON

€ 668,960,218 430315 1555 € 53,444,301 36994 1445 7.99

62034311 MEN'S OR BOYS' TROUSERS OF SYNTHETIC FIBRES, IND. & OCCUP.

€ 260,020,658 195391 1331 € 9,450,380 8462 1117 3.63

62034319 MEN'S OR BOYS' TROUSERS AND BREECHES OF SYNTHETIC FIBRES

€ 549,161,992 369951 1484 € 11,531,966 7775 1483 2.10

62034331 MEN'S OR BOYS' OVERALLS OF SYNTHETIC FIBRES, IND. & OCCUP.

€ 60,127,561 49341 1219 € 1,856,802 1475 1259 3.09

62034390 MEN'S/BOYS' SHORTS OF SYNTHETIC FIBRES (EXCL. UNDERPANTS)

€ 86,524,837 114438 1630 € 2,757,472 1927 1431 1.48

62033990 MEN'S OR BOYS' JACKETS OF TEXTILE MATERIALS

€ 59,770,083 22212 2691 € 1,156,147 822 1407 1.93

62034919 MEN'S OR BOYS' TROUSERS AND BREECHES OF ARTIFICIAL FIBRES

€ 32,011,455 31696 1010 € 5,029,198 2858 1760 15.71

62034990 MEN'S OR BOYS' TROUSERS / SHORTS OF TEXTILE MATERIALS

€ 83,728,103 57874 1447 € 1,825,758 1533 1191 2.18

62046231 WOMEN'S /GIRLS' COTTON DENIM TROUSERS (EXCL. IND. & OCCUP.)

€ 1,664,032,443 982073 1694 € 195,575,997 137281 1425 11.75

62046239 WOMEN'S/GIRLS' TROUSERS, OF COTTON (EXCL. IND. AND OCCUP.)

€ 1,933,633,892 1257839 1537 € 50,161,073 34721 1445 2.59

62046311 WOMEN'S /GIRLS' TROUSERS OF SYNTHETIC FIBRES, IND. & OCCUP.

€ 23,812,910 20525 1160 € 1,347,737 1320 1021 5.66

62046318 WOMEN'S OR GIRLS' TROUSERS, OF SYNTHETIC FIBRES

€ 636,140,381 368779 1725 € 4,280,650 3506 1221 0.67

62046918 WOMEN'S TROUSERS OF ARTIFICIAL FIBRES

€ 229,535,570 139174 1649 € 12,587,151 6806 1849 5.48

62052000 MEN'S/BOYS' SHIRTS OF COTTON € 2,349,491,812 1180534 1990 € 3,885,122 3606 1077 0.17


20

(EXCL. SINGLETS & OTHER VESTS) 62053000 MEN'S OR BOYS' SHIRTS OF MAN-MADE FIBRES

€ 248,718,712 189863 1310 € 1,032,817 576 1793 0.42

62063000 WOMEN'S /GIRLS' BLOUSES, SHIRTS AND SHIRT-BLOUSES OF COTTON

€ 929,261,101 396004 2347 € 1,341,796 973 1379 0.14

62079990 MENS, BOYS SINGLETS, BATHROBES OF TEX. MATERIALS

€ 4,956,858 6087 814 € 1,210,172 2118 571 24.41

62113210 MEN'S/BOYS' INDUSTRIAL AND OCCUPATIONAL CLOTHING OF COTTON

€ 132,482,820 98419 1346 € 7,362,401 6155 1196 5.56

62113290 MEN'S OR BOYS' GARMENTS, OF COTTON, N.E.S.

€ 49,881,240 31899 1564 € 3,168,279 3539 895 6.35

62114210 WOMEN'S /GIRLS' OVERALLS, & IND. & OCCUP. CLOTHING OF COTTON

€ 53,926,866 52879 1020 € 4,470,844 7273 615 8.29

Woven Readymade Garments (RMG) – shown in Table 7B above, is a high potential group of products, as EU28 is a huge market for Woven RMG, importing over EURO 36 billion worth of the product in 2014. Pakistani products have a larger presence in the Woven RMG market as compared to the market shares in the Knitted RMG; however, in the products that have a billion EURO plus market (highlighted in green in the table above), Pakistan is still way below potential. On the basis of market size, the following products amongst Woven RMG are identified as HIGH POTENTIAL products: Men/Women Trousers of Cotton and of Denim, Men Cotton Shirts, Women Cotton Shirts & Blouses.

To have a closer look, some of the high potential products identified in pre-para, are compared with other competitor countries, in the table 7B(1) below. As it may be seen from the table below, despite being the least per unit cost supplier, Pakistan has a smaller share as compared to its non-EU competitors. With very strong backward linkages with domestic spinning and weaving industries, there is huge potential for Pakistan’s Woven RMG exports to significantly increase their share in the EU market.

Table 7B (1): Woven RMG - competitor analysis Main Non-EU Competitors

H.S.Code Country mkt share euro/100kg Tariff Landed pr 62034231-Mens Denim trousers

China 13% 1166 12% 1306 Turkey 19% 2323 0 2323 Bangladesh 25% 1081 0 1081 Tunisia 10% 2788 9.60% 3055 Pakistan 16% 1186 0 1186 Lowest

62046231-Women Denim trousers

China 21% 1290 12% 1445 Turkey 25% 2776 0 2776 Tunisia 7% 2988 9.60% 3275 Bangladesh 19% 1308 0 1308 Pakistan 12% 1425 0 1425 2nd Lowest

62052000-Mens Cotton shirts

China 22% 1712 12% 1918 Turkey 13% 3748 0 3748 India 12% 1445 9.60% 1583 Bangladesh 23% 1626 0 1626 Pakistan 0.17% 1077 0 1077 Lowest Vietnam 6% 2403 9.60% 2634


21

62063000-Women Cotton shirts &blouses

China 20% 2253 12% 2523 Turkey 15% 1982 0 1982 Pakistan 0.14% 1379 0 1379 Lowest Bangladesh 14% 2131 0 2131 India 30% 3074 9.60% 3369

Table 7C: Section 11b –Home textiles


PARTNER PRODUCT/INDICATORS

EU28_EXTRA VALUE

EU28_EXTRA Quantity (100kg)

price p.u. euro

/100kg

PAKISTAN VALUE

PAKISTAN Quantity (100kg)

price p.u. euros/100kg

mkt share value

% 63071010 FLOORCLOTHS, DISHCLOTHS, KNITTED

€ 109,699,072 200,266 548 € 4,006,700 14,690 273 3.7

63071030 FLOORCLOTHS, DISHCLOTHS, DUSTERS, OF NONWOVENS

€ 39,405,132 97,313 405 € 363,430 1,138 319 0.9

63071090 FLOORCLOTHS, DUSTERS, OF ALL TYPES OF TEXTILE MATERIALS (EXCL. KNITTED )

€ 118,372,626 226,949 522 € 6,246,900 43,870 370 13.7

63079010 MADE-UP ARTICLES OF TEXTILE MATERIALS, INCL. DRESS PATTERNS, KNITTED, n.e.s.

€ 140,136,530 170,335 823 € 702,490 718 978 0.5

63079098 MADE-UP ARTICLES OF TEXTILE MATERIALS, INCL. DRESS PATTERNS, N.E.S.

€1,165,028,761 2,315,667 503 €15,653,768 29,231 536 1.3

63059000 SACKS & BAGS, FOR PACKING OF GOODS, OF TEXTILE MATERIALS

€ 13,413,563 18,242 735 € 2,491,861 3,544 703 18.6

63053390 SACKS AND BAGS, FOR PACKING , OF P.E. or P.P.

€ 131,838,787 648,560 203 € 300,863 1,699 177 0.2

63053290 FLEXIBLE BULK CONTAINERS, OF MAN-MADE TEXTILE MATERIALS (EXCL .P.E. or PP)

€ 101,603,597 418,603 243 € 323,749 774 418 0.3

63052000 SACKS AND BAGS, FOR THE PACKING OF GOODS, OF COTTON

€ 23,802,732 25,032 951 € 1,014,230 1,836 552 4.3

63039990 CURTAINS, INCL. DRAPES, OF TEXTILE MATERIALS

€ 58,513,091 88,022 665 € 1,812,490 4,679 387 3.1

63039290 CURTAINS, INCL. DRAPES, OF SYNTHETIC FIBRES

€ 501,560,755 808,061 621 €25,746,538 47,466 542 5.1

63039100 CURTAINS, INCL. DRAPES, AND INTERIOR BLINDS, OF COTTON (EXCL. KNITTED)

€ 105,953,453 158,954 667 €17,558,932 29,286 600 16.6

63031900 CURTAINS, DRAPES, KNITTED (EXCL. OF SYNTHETIC

€ 5,104,429 9,673 528 € 488,086 1,033 472 9.6


22

FIBRES, AWNINGS) 63029100 TOILET LINEN AND KITCHEN LINEN OF COTTON (EXCL. OF TERRY FABRICS)

€ 165,663,324 293,211 565 €32,065,431 76,845 417 19.4

63026000 TOILET LINEN AND KITCHEN LINEN, OF TERRY TOWELLING

€ 899,193,178 1,584,226 568 €182,608,943 405,093 451 20.3

63025100 TABLE LINEN OF COTTON (EXCL. KNITTED OR CROCHETED)

€ 148,421,264 196,341 756 € 8,590,140 14,946 575 5.8

63023100 BEDLINEN OF COTTON (EXCL. PRINTED, KNITTED OR CROCHETED)

€ 667,390,481 987,420 676 €300,226,411 485,085 619 45.0

63021000 BEDLINEN, KNITTED OR CROCHETED

€ 294,790,610 552,416 534 €109,152,989 235,762 463 37.0

Home-Textiles is Pakistan’s premier sub-sector within the Textile Products section (S-11b), with over EURO 3 billion exports in FY2014, when it grew over 30% as compared to FY 2013. With excellent backward linkages through production of yarn, and wide-width woven fabric, Pakistan is now one of the significant players in the EU market in Home-Textiles. Consequently, the country’s Home-Textile products are well recognized for quality in this market. The high potential products, seen in highlighted green in the above Table-7C, have a EURO half a billion plus market. The HIGH POTENTIAL products identified are: Made-up articles of textile materials incl. dress patterns, Curtains & Drapes, Toilet Linen and Kitchen Linen, and Bed-linen of Cotton.

To have a closer look, some of the high potential products identified in pre-para, are compared with other competitors, in the Table-7C(1) below. Generally, the price levels of Pakistani products are lower than the average price of imports. Probably, that is the reason why Pakistan’s Home–Textile products enjoy a significant market share in Toilet and Kitchen linen, of terry toweling.

Table 7C (1): Home textiles-Competitor analysis Main Non-EU Competitors

H.S. Code 63039290 Country mkt share

value % Euro / 100kg

Tariff Per unit Landed price(EURO)

China 73% € 563 12% 630 Turkey 11% € 1,098 0% 1098 Pakistan 5% € 542 0% 542 Lowest

63026000- Toilet and Kitchen linen, of terry toweling

Bangladesh 6% € 466 0% 466 India 17.6% € 528 9.60% 579 China 13% € 506 12% 567 Turkey 36% € 750 0% 750 Pakistan 20% € 451 0% 451 Lowest

63023100-Bedlinen of cotton

Bangladesh 10% € 682 0% 682 India 10% € 752 9.60% 824 China 13% € 683 12% 765 Pakistan 45% € 619 0% 619 Lowest


23

Table 8: Section 11a- Textiles $ FLOW IMPORT PERIOD Jan.-Dec. 2014 REPORTER EU28 Value in Euros; Quantity Units in 100kgs

PARTNER EU28 Extra EU28 Extra

p.u. price Pakistan Pakistan p.u.

price mkt

share PRODUCT/INDICATORS Value Units Value Units value%

52081216 PLAIN WOVEN FABRICS>= 85% COTT BY WT.,> 100 G TO 130 G/M²,UNBL.,WD<= 165cm

31,080,322 62,139 500 4,693,539 11,464 409 15

52081219 PLAIN WOVEN FABRICS, >= 85% COTT. BY WT.,>100 G TO 130 G/M², UNBL.,WD>165cm

107,309,253 271,447 395 57,195,828 141,975 403 53

52081296 PLAIN WOVEN FABRICS,>= 85% COTTON BY WT.>130 G TO 200 G/M²,UNBL.,WD<=165cm

42,982,972 107,528 400 8,091,763 23,217 349 19

52081299 PLAIN WOVEN FABRICS, >= 85% COTT. BY WT., > 130 G TO 200 G/M², UNBL.,WD>165cm

40,383,375 122,882 329 17,645,618 49,749 355 44

52081300 WOVEN FABRICS, >= 85% COTTON BY WT., <= 200 G/M², IN TWILL, UNBLEACHED

33,251,257 70,342 473 21,593,416 46,647 463 65

52081900 WOVEN FABRICS ,>= 85% COTT BY WT.,<= 200 G/M², UNBL.(EXCL. TWILL)

92,313,671 152,494 605 40,249,109 79,022 509 44

52082190 PLAIN WOVEN FABRICS,>= 85% COTTON BY WT., <= 100 G/M², BLEACHED

14,932,890 26,292 568 4,315,316 8,142 530 29

52083100 PLAIN WOVEN FABRICS OF COTTON,WITH >= 85% COTT BY WT,WT<= 100 G/M²,Dyed

9,028,320 11,345 796 1,135,944 2,130 533 13

52085100 PLAIN WOVEN FABRICS OF COTTON, WITH >= 85% COTT BY WT.,<= 100 G/M², PRINTED

12,487,954 11,339 1101 1,712,361 3,672 466 14

55134100 PLAIN WOVEN,MOSTLY,BUT < 85% POLY FIBRES BY WT.,W/COTT,<= 170 G/M²,PRINTED

22,873,328 58,220 393 19,319,076 52,864 365 84

55132100 PLAIN WOVEN MOSTLY,BUT < 85% POLY FIBRES BY WT.,W/COTTON,<= 170 G/M²,DYED

31,668,685 65,821 481 14,041,606 34,841 403 44

55131120 PLAIN WOVEN,MOSTLY < 85% POLY FIBRES BY WT.,W/COTT,<= 170 G/M²,WDTH<=165

28,310,630 74,200 382 10,653,071 29,058 367 38

55131190 PLAIN WOVEN, MOSTLY,BUT< 85% POLY FIBRES BY WT.,W/COTT,<= 170 G/M²,>165cm

58,133,607 156,669 371 33,629,818 93,136 361 58

55095300 YARN ,MOSTLY BUT < 85% POLY FIBRES BY WT.,W/COTT(EXCL. SEWING THREAD)

86,520,521 363,980 238 17,094,646 70,517 242 20

57011010 CARPETS & OTHER FLOOR COVERINGS, OF WOOL,KNOTTED,CONTAINING > 10% SILK

19,073,813 6,368 2995 2,460,270 1,302 1890 13

57011090 CARPETS AND OTH. TEX.FLOOR COVERINGS,OF WOOL,KNOTTED,(EXCL.W/ >10% SILK)

136,091,976 81,147 1677 22,569,107 9,400 2401 17

Pakistan is a major supplier of Textiles (S-11a), as it may be seen in the Table 8 above. In many of the products, Pakistan enjoys over 50% of the market share. The HIGH POTENTIAL products identified on the basis of EURO 50 million plus EU market are: Plain Woven Fabrics, (unbleached, of greater than 85% Cotton by weight, and of various weights per square meter), Yarn (with less than 85% poly fibers by weight), and Carpets (of wool, knotted).


24

Table 8 (1): Textiles – Competitor analysis Main Non-EU Competitors

H.S. Code Country mkt share value % Euro / 100kg Tariff Landed Price 52081219-Plain Woven Fabric

China 10% € 452 8% 488 Turkey 14% € 395 0 395 Bangladesh 0.0% 0 India 8% € 386 4.50% 404 Pakistan 53% € 403 0 403

Table 9: Section 8b- Leather products


PARTNER EU28 Extra EU28 Extra

price p.u. PAKISTAN PAKISTAN price p.u. mkt

share

PRODUCT/INDICATORS Value Unit (100kg)

euro /100kg Value Unit

(100kg) euro/100kg value%

42010000 SADDLERY AND HARNESS FOR ANY ANIMAL,

€317,825,894 296158 1073 € 2,343,117 2419 969 0.74

42022100 HANDBAGS, WITH OUTER OF LEATHER OR COMPOSITION LEATHER

€1,151,246,991 229965 5006 € 2,691,913 957 2813 0.23

42022210 HANDBAGS, WITH OUTER SURFACE OF PLASTIC SHEETING

€1,026,060,880 1311836 782 € 68,896 81 851 0.01

42022290 HANDBAGS, WITH OUTER SURFACE OF TEXTILE MATERIALS

€ 484,716,354 441418 1098 € 182,381 554 329 0.04

42029215 MUSICAL INSTRUMENT CASES € 14,756,414 20772 710 € 32,360 38 852 0.22

42029219 INSULATED FOOD OR BEVERAGE BAGS

€ 514,244,663 837357 614 € 341,888 346 988 0.07

42029291 SMALL ARTICLES OF LEATHER WITH OUTER SURFACE OF TEXTILE MATERIALS

€1,044,396,188 1184289 882 € 7,510,021 8675 866 0.72

42029298 INSULATED FOOD OR BEVERAGE BAGS, SHOPPING BAGS

€ 749,703,868 993754 754 € 9,467,979 14727 643 1.26

42029900 TRAVELLING-BAGS TOOL BAGS, CUTLERY CASES

€ 231,178,408 302277 765 € 546,802 930 588 0.24

42031000 ARTICLES OF APPAREL, (EXCL ACCESSORIES, FOOTWEAR)

€ 932,020,659 176628 5277 €205,331,931 56631 3626 22.03

42032100 GLOVES FOR USE IN SPORT, € 39,834,970 16478 2417 € 16,738,373 9729 1720 42.02

42032910 PROTECTIVE GLOVES FOR ALL TRADES € 322,952,145 355380 909 € 76,373,940 53546 1426 23.65

42032990 GLOVES, (EXCL. SPECIAL SPORTS & PROTECTIVE GLOVES)

€ 126,502,393 35275 3586 € 18,701,473 6837 2735 14.78

42033000 BELTS AND BANDOLIERS, € 169,578,297 84530 2006 € 1,957,191 1474 1328 1.15

42034000 CLOTHING ACCESSORIES OF LEATHER

€ 17,497,437 7065 2477 € 1,970,105 1322 1490 11.26

42050090 ARTICLES OF LEATHER (EXCL. SADDLERY AND HARNESS BAGS)

€ 372,180,276 180086 2067 € 641,342 472 1359 0.17


25

Leather Products (S-8b) have traditionally been one of the strengths of Pak exports. As it may be noted in the Table 9 above, the EU is a big market for Leather Products: Handbags (EURO 3 billion), Gloves (EURO 1 billion), Apparel & Accessories (EURO 1.5 billion). With strong back linkages with domestic leather-producing industry, Pakistan could develop an even stronger Leather Products manufacturing industry. On the basis of EU market size of EURO one billion plus, the HIGH POTENTIAL products identified in this group are: Handbags (with outer cover of leather or plastic sheeting), Assorted articles of Leather (with outer surface of textile materials), Leather Apparel.

With very competitive prices (see Table-9(1) below for selected products), there is great potential for Pak leather products to garner a larger share of this considerable EU market.

Table 9 (1): Leather products – Competitor analysis Main Non-EU Competitors

H.S. Code Country mkt share value % Euro / 100kg 42022100-Handbags with outer of leather or composition leather

China 27% € 2,990 India 21% € 2,953 Bangladesh 0.5% € 2,984 Indonesia 1.1% € 5,375 Turkey 6% € 9,925 Pakistan 0.2% € 2,813

42029298-Insulated Food or Beverage Bags

China 77% € 742 Vietnam 7% € 592 India 6% € 631 Pakistan 1% € 645

42032910-Protective Gloves India 38% € 908 China 34% € 706 Pakistan 24% € 1,426

Table 10: Section 20 –Seats, toys, sports equipment

FLOW: IMPORT PERIOD: Jan.-Dec. 2014 REPORTER: EU28

PARTNER PRODUCT/INDICATORS EU Extra VALUE PAK VALUE Share

(%) 94032080 METAL FURNITURE (EXCL. FOR OFFICES, MEDICAL, SURGICAL, DENTAL) € 1,515,486,407 € 297,854 0.020

94036010 WOODEN FURNITURE FOR DINING ROOMS AND LIVING ROOMS (EXCL. SEATS) € 1,082,512,373 € 305,209 0.028

94036090 WOODEN FURNITURE (EXCL. FOR OFFICES OR SHOPS, KITCHENS, LIVING ROOMS AND BEDROOMS) € 1,136,896,909 € 157,512 0.014

94049010 ARTICLES OF BEDDING AND SIMILAR FURNISHING, (EXCL. MATTRESSES AND SLEEPING BAGS) € 141,666,404 € 445,738 0.315

94049090 MATTRESS SUPPORTS, FILLED WITH MATERIAL OTHER FEATHERS OR DOWN € 862,959,395 € 27,144,220 3.145

94052091 ELECTRIC TABLE,BEDSIDE OR FLOOR-STANDING LAMPS, USED WITH FILAMENT LAMPS € 225,504,084 € 505,943 0.224

94052099 ELECTRIC TABLE, DESK, OR FLOOR-STANDING LAMPS, USED WITH DISCHARGE LAMPS € 280,816,527 € 354,731 0.126

94055000 NON-ELECTRICAL LAMPS AND LIGHTING FITTINGS, N.E.S. € 313,844,143 € 638,813 0.204

94059900 PARTS OF LAMPS AND LIGHTING FITTINGS, ILLUMINATED SIGNS AND NAMEPLATES AND THE LIKE, N.E.S.

€ 459,426,223 € 374,481 0.082

95030041 STUFFED TOYS REPRESENTING ANIMALS OR NON-HUMAN CREATURES € 706,296,220 € 171,819 0.024

95030095 PLASTIC TOYS, N.E.S. € 1,072,829,142 € 485,902 0.045


26

95049080 TABLES FOR CASINO GAMES, BOWLING ALLEY EQUIPMENT, AND OTHER TABLE OR PARLOUR GAMES, € 412,206,712 € 271,835 0.066

95061900 SKI EQUIPMENT FOR WINTER SPORTS (OTHER THAN SKIS AND SKI-FASTENINGS [SKI-BINDINGS]) € 41,019,419 € 213,559 0.521

95065900 BADMINTON AND SIMILAR RACKETS, WHETHER OR NOT STRUNG (excl TENNIS & TABLE-TENNIS BATS) € 54,698,232 € 1,898,277 3.470

95066200 INFLATABLE BALLS € 244,137,512 € 82,470,227 33.780 95066910 CRICKET AND POLO BALLS € 3,424,936 € 1,460,681 42.648 95066990 BALLS (EXCL. INFLATABLE, GOLF, TABLE-TENNIS, TENNIS, CRICKET AND POLO BALLS) € 59,750,946 € 3,831,315 6.412

95069110 EXERCISING APPARATUS WITH ADJUSTABLE RESISTANCE MECHANISMS € 592,044,342 € 232,382 0.039

95069190 Articles and equipment for general physical exercise, gymnastics or athletics-Other € 641,795,189 € 8,084,330 1.260

95069910 CRICKET AND POLO EQUIPMENT (EXCL. BALLS) € 9,306,588 € 844,529 9.075 95069990ARTICLES & EQUIPMENT FOR GENERAL PHYSICAL EXERCISE, OR ATHLETICS € 822,709,233 € 25,517,255 3.102

96031000 BROOMS AND BRUSHES, CONSISTING OF TWIGS OR OTHER VEGETABLE MATERIALS BOUND TOGETHER € 18,378,509 € 326,968 1.779

96039099 MOPS AND LEATHER DUSTERS; FOR BROOM OR BRUSH MAKING; BROOMS AND BRUSHES, N.E.S. € 157,488,683 € 1,685,751 1.070

96082000 FELT-TIPPED AND OTHER POROUS-TIPPED PENS AND MARKERS € 152,596,004 € 220,746 0.145

96190050 NAPKINS AND NAPKIN LINERS FOR BABIES, AND ARTICLES, OF TEXTILE MATERIALS € 30,747,405 € 1,206,908 3.925

96190081 NAPKINS AND NAPKIN LINERS FOR BABIES (EXCL. OF TEXTILE MATERIALS) € 127,537,460 € 177,225 0.139

Mostly comprising of Toys and Sports Equipment products, Pakistan is not a significant player, in the section (S-20), as it may be seen in the Table 10 above. Nevertheless, within the section the following products have been identified as HIGH POTENTIAL, on the basis of a significant market size, as well as Pakistan supplying a reasonable quantity of exports already: Articles of Bedding & Furnishing (fitted with springs or stuffed), Inflatable Balls, and Miscellaneous Articles (for general physical exercise, or athletics). Inflatable Balls largely comprises of soccer balls, for which Pakistan has already earned the status of a high quality supplier, over the years.

Table 11: Section 8a- Leather & hides

FLOW IMPORT

PERIOD Jan.-Dec. 2014

REPORTER EU28

PARTNER PRODUCT/INDICATORS

EU28_EXTRA VALUE

EU28 Extra Unit

(100kg)

price p.u. euro /100k

g PAKISTAN

VALUE

PAKISTAN

Unit (100kg)

price p.u.

euro/100kg

mkt share

value %

41044919 WHOLE HIDES AND SKINS OF BOVINE, € 7,387,232 8692 850 € 337,246 177 1905 5

41044990 HIDES AND SKINS OF EQUINE ANIMALS, IN THE DRY STATE "CRUST",

€ 4,079,256 3148 1296 € 106,339 72 1477 3

41079910 LEATHER "INCL. PARCHMENT-DRESSED LEATHER" € 57,427,143 39623 1449 € 5,495,917 2523 2178 10

41079210 GRAIN SPLITS LEATHER "INCL. PARCHMENT-DRESSED LEATHER",

€202,251,448 130094 1555 €17,447,380 7315 2385 9

41071910 LEATHER "INCL. PARCHMENT-DRESSED LEATHER",

€ 15,117,462 6773 2232 € 717,170 305 2351 5

41071990 LEATHER , WHOLE HIDES , UNSPLIT FULL GRAINS LEATHER

€ 20,788,931 18399 1130 € 669,797 1074 624 3

41071219 GRAIN SPLITS LEATHER "INCL. PARCHMENT-DRESSED € 62,987,200 26436 2383 € 8,956,345 3623 2472 14


27

LEATHER",

41071291 GRAIN SPLITS LEATHER "INCL. PARCHMENT-DRESSED LEATHER",

€376,200,759 252579 1489 €19,339,197 13950 1386 5

41120000 LEATHER FURTHER PREPARED AFTER TANNING OR CRUSTING

€ 75,056,590 17019 4410 € 1,860,015 483 3851 2

41131000 LEATHER FURTHER PREPARED AFTER TANNING OR CRUSTING ,OF GOATS OR KIDS, )

€124,377,804 49595 2508 €37,350,584 12219 3057 30

41139000 LEATHER FURTHER PREPARED AFTER TANNING ,OF ANTELOPES,AND OTHER ANIMALS

€ 18,279,824 4575 3996 € 997,110 1040 959 5

4114 CHAMOIS LEATHER, INCL. COMBINATION CHAMOIS LEATHER)

€ 21,557,536 14403 1497 € 1,785,064 666 2680 8

Pakistan supplied over EURO 100 million of Leather & Hides (S-8a) to the EU market of nearly EURO 3 billion, in CY 2014. On the basis of EU market for the product being over EURO 100 thousand, HIGH POTENTIAL products are identified in green in the above Table 11. These are: Grain Splits Leather and Leather further prepared after tanning and crusting.

Surgical & Medical Instruments/Appliances

In this section (S-18), Pakistan is exporting a large variety of products to the EU market, as may be seen in the Table 12 below. However, only two items could be designated HIGH POTENTIAL products, namely: Instruments and appliances used in Dental Sciences, and in Medical, Surgical, or Veterinary Sciences. Table 12(1) below is indicative of the market shares enjoyed by various competitors of these products in the EU market. Pakistan already has a cluster (in and around Sialkot, Punjab) producing surgical items, and given support these products have the potential to obtain larger shares in the EU.

Table 12 (1): Surgical & medical instruments/appliances –competitors Main Non-EU Competitors

H.S. Code Country mkt share value % 90184990-Instruments / appliances for Dental Sciences China 7%

Switzerland 43% Pakistan 2%

90189084-Surgical Instruments United States 48% Mexico 16% China 6% Switzerland 7% Pakistan 2%

Table 12: Section 18 – Surgical & medical instruments/appliances


PARTNER EU28_EXTRA PAKISTAN mkt

share

PRODUCT/INDICATORS VALUE VALUE in value

(%) 90158011 ELECTRONIC METEOROLOGICAL, HYDROLOGICAL AND GEOPHYSICAL INSTRUMENTS AND APPARATUS

€ 155,423,248 € 1,010,306 0.650

90184910 BURRS, DISCS, DRILLS AND BRUSHES, FOR USE IN DENTAL DRILLS € 47,569,323 € 394,519 0.829

90184990 INSTRUMENTS AND APPLIANCES USED IN DENTAL SCIENCES, N.E.S. € 439,113,357 € 10,816,277 2.463


28

90185010 OPHTHALMIC INSTRUMENTS AND APPLIANCES, NON-OPTICAL, N.E.S. € 220,727,195 € 598,306 0.271

90185090 OPHTHALMIC INSTRUMENTS AND APPLIANCES, OPTICAL, N.E.S. € 358,006,330 € 463,882 0.130

90189010 INSTRUMENTS AND APPARATUS FOR MEASURING BLOOD-PRESSURE € 151,014,215 € 226,452 0.150

90189020 ENDOSCOPES USED IN MEDICAL, SURGICAL OR VETERINARY SCIENCES € 562,381,670 € 612,455 0.109

90189040 DIATHERMIC APPARATUS (EXCL. ULTRAVIOLET OR INFRA-RED APPARATUS) € 91,431,680 € 1,129,709 1.236

90189050 TRANSFUSION APPARATUS USED IN MEDICAL SCIENCES € 196,636,192 € 84,407 0.043

90189060 ANAESTHETIC APPARATUS AND INSTRUMENTS € 379,924,087 € 522,368 0.137

90189084 INSTRUMENTS AND APPLIANCES USED IN MEDICAL, SURGICAL OR VETERINARY SCIENCES, N.E.S.

€ 4,304,506,129 € 73,909,309 1.717

90219090 APPLIANCES, WORN, CARRIED, OR IMPLANTED IN THE BODY, TO COMPENSATE FOR A DISABILITY

€ 1,640,451,968 € 64,628 0.004

90271010 ELECTRONIC GAS OR SMOKE ANALYSIS APPARATUS € 163,145,238 € 58,675 0.036

90279050 PARTS AND ACCESSORIES OF INSTRUMENTS AND APPARATUS FOR PHYSICAL OR CHEMICAL ANALYSIS,

€ 1,006,050,892 € 118,090 0.012

90318038 ELECTRONIC INSTRUMENTS, APPARATUS FOR MEASURING OR CHECKING, N.E.S. IN CHAPTER 90

€ 1,039,369,330 € 123,722 0.012

90321089 NON-ELECTRONIC THERMOSTATS, WITHOUT ELECTRICAL TRIGGERING DEVICE € 92,250,271 € 98,796 0.107

92059090 WIND MUSICAL INSTRUMENTS (EXCL. BRASS-WIND INSTRUMENTS) € 50,943,690 € 201,897 0.396

92060000 PERCUSSION MUSICAL INSTRUMENTS, E.G. DRUMS, XYLOPHONES, CYMBALS, CASTANETS, MARACAS

€ 69,461,203 € 540,812 0.779

Table 13: Section 7a – Plastics

FLOW

IMPORT

PERIOD Jan.-Dec. 2014 REPORTER EU28

PARTNER PRODUCT/INDICATOR

S

EU28_EXTRA

VALUE

EU28_EXTRA

Unit(100kg )

price p.u.

euros/100kg

PAKISTAN VALUE

PAKISTAN

Quantity (100KG)

price p.u. euros/100k

g

mkt shar

e value

% 39206219 PLATES, SHEETS, FOIL AND STRIP, OF NON-CELLULARP.E.T.

485,158,965 204,7091 237 4,023,334 26686 151 0.8

39206290 PLATES, SHEETS, FOIL AND STRIP, OF NON-CELLULAR P.E.T.,

76,409,313 380,511 201 64,252 451 142 0.1

39031900 POLYSTYRENE, IN PRIMARY FORMS (EXCL. EXPANSIBLE)

242,144,869 1,677,633 144 26,360,552 192754 137 10.9

39076020 PET, IN PRIMARY FORMS, VISCOSITY NUMBER OF >= 78 ML/G

776,172,809 7,569,457 103 5,881,047 58870 100 0.8

39076080 PET, IN PRIMARY FORMS, VISCOSITY NUMBER OF < 78 ML/G

233,111,471 2,015,522 116 24,268,222 237154 102 10.4


29

Pakistan has been a significant supplier of Polystyrene and PET, both in primary forms, which could be regarded as HIGH POTENTIAL products in this section (S-7a), as also seen in the CY 2014 data in the Table 13 above. Pakistan’s PET exports have been losing their market share as new production kicks in, in Turkey and Egypt, which is more than needed for domestic consumption in these countries, and hence the exportable surplus is being shipped to the EU market. Table 13 (1) below, is indicative of the market shares of the main players in the EU market, in this sector.

Table 13 (1): Plastics – Competitor analysis Main Non-EU Competitors

H.S. Code Country mkt share value %

Euro / 100kg Tariff CVD19 Total duty Landed price

39031900-Polytyrene Forms

Korea 23 151 6.5% 6.5% 161 India 11 140 5.20% 5.20% 147 Egypt 22 133 5.20% 5.20% 140 Turkey 3 152 0 0 152 Pakistan 11 137 0 0 137

39076080-PET Forms

Korea 6 111 6.50% 6.50% 118 India 7 103 5.20% 5.20% 108 Egypt 1.2 101 5.20% 5.20% 106 Turkey 26 80 0.00% 0.00% 80 Pakistan 10 102 0.00% 4% 4% 106

Table 14: Section 15b – Base metals & articles of base metals

FLOW IMPORT PERIOD 2014 REPORTER EU28

PARTNER EU28 Extra EU28 Extra per unit Pakistan Pakistan per unit mkt

share

PRODUCT/INDICATORS Value Unit (100kg) euro/100kg Value Unit(100kg) euro/100kg

in value (%)

74031300 COPPER, REFINED, IN THE FORM OF BILLETS

€ 5,027,522 10582 475 € 2,439,484 4716 517 48.52

74031900 COPPER, UNWROUGHT (EXCL. COPPER BILLETS, CATHODES)

€ 72,226,133 141675 510 € 379,425 759 500 0.53

74032100 COPPER-ZINC BASE ALLOYS "BRASS" UNWROUGHT

€ 48,447,853 125009 388 € 109,347 263 416 0.23

74032200 COPPER-TIN BASE ALLOYS "BRONZE" UNWROUGHT

€ 25,093,766 47012 534 € 167,510 402 417 0.67

74040010 WASTE AND SCRAP, OF REFINED COPPER (EXCL. INGOTS)

€748,818,024 1882310 398 €13,357,297 26608 502 1.78

74040091 WASTE AND SCRAP, OF COPPER-ZINC ALLOYS (EXCL. INGOTS)

€261,469,737 778567 336 €1,608,690 4658 345 0.62

74040099 WASTE AND SCRAP OF COPPER ALLOYS

€856,926,238 2099860 408 €21,518,674 46234 465 2.51

76121000 COLLAPSIBLE TUBULAR CONTAINERS, OF ALUMINIUM

€ 16,668,935 14033 1188 € 909,296 831 1094 5.46

81019700 TUNGSTEN WASTE AND SCRAP (EXCL. ASH CONTAINING TUNGSTEN)

€ 65,757,050 34069 1930 € 350,922 183 1918 0.53

83071000 FLEXIBLE TUBING OF IRON OR €130,488,041 146253 892 € 154,144 232 664 0.12

19 A Countervailing Duty (CVD) has been imposed by the EU on Pakistan’s PET exports.


30

STEEL, WITH OR WITHOUT FITTINGS 83062900 STATUETTES AND OTHER ORNAMENTS, OF BASE METAL

€277,089,059 588525 471 € 180,032 333 541 0.06

83024900 BASE METAL MOUNTINGS, FITTINGS AND SIMILAR ARTICLES )

€351,175,797 573400 612 € 736,566 740 995 0.21

82159910 SPOONS, FORKS,TABLEWARE OF STAINLESS STEEL

€157,688,360 223640 705 € 582,849 570 1023 0.37

82159990 SPOONS, FORKS, FISH-KNIVES, OR TABLEWARE OF BASE METALS

€ 15,330,135 32417 473 € 142,945 304 470 0.93

82149000 HAIR CLIPPERS, OTHER ARTICLES OF CUTLERY OF BASE METAL

€ 29,675,137 33109 896 € 219,189 84 2609 0.74

82142000 MANICURE INSTRUMENTS, INCL. NAIL FILES OF BASE METAL

€ 74,159,945 69967 1060 € 9,349,605 3883 2408 12.61

82130000 SCISSORS, SIMILAR SHEARS, AND BLADES THEREOF

€ 83,806,887 112784 743 € 7,787,747 4302 1810 9.29

82121090 NON-ELECTRIC RAZORS OF BASE METAL (EXCL. SAFETY RAZORS)

€ 59,185,007 34408 1720 € 181,130 72 2516 0.31

82119300 KNIVES HAVING OTHER THAN FIXED BLADES, OF BASE METAL

€102,028,199 93561 1090 € 969,118 661 1466 0.95

82119200 KNIVES WITH FIXED BLADES OF BASE METAL

€170,612,071 164919 1035 € 1,000,190 715 1399 0.59

82055980 HAND TOOLS, INCL. GLAZIERS' DIAMONDS, OF BASE METAL, N.E.S.

€294,430,160 429738 685 € 801,516 335 2393 0.27

82055100 HOUSEHOLD HAND TOOLS, WITH PARTS OF BASE METAL

€193,025,164 321626 600 € 161,602 130 1243 0.08

82032000 PLIERS, INCL. CUTTING PLIERS, FOR NON-MEDICAL USE

€166,945,117 191990 870 € 3,132,320 1425 2198 1.88

Table 14 above may be seen for Pak exports of Base Metals and Articles of base metals to the EU in CY 2014. While the highest exports are for Waste & Scrap (of copper or of copper alloys), there is a large variety of manufactured articles of base metals exported as well. Despite having lower export value, these products may be seen as HIGH POTENTIAL products in this group of products (S-15b): Manicure Instruments, Scissors & Blades, Knives, and Pliers. Each of these has an export value of over EURO 1 million, but with focus and support, these values could rise rapidly.

Table 15: Section 12a – Footwear FLOW IMPORT PERIOD Jan.-Dec. 2014 REPORTER EU28

PARTNER EU28 Extra EU28 Extra per unit PAKISTAN PAKISTAN per unit

mkt shar

e PRODUCT/INDICATOR

S Value(Euros) Unit(100kg)

euro/100kg

Value(Euros)

Unit(100kg)

euro/100kg

value (%)

64031900 SPORTS FOOTWEAR, WITH OUTER SOLES OF RUBBER, PLASTICS,LEATHER

117,861,224 59,837 1,970 € 1,961,928 1,529 1,283 1.66

64032000 FOOTWEAR WITH OUTER SOLES OF LEATHER, AND

13,684,568 5,595 2,446 € 353,288 262 1,348 2.58


31

UPPERS OF LEATHER 64035950 SLIPPERS & OTHER INDOOR FOOTWEAR, WITH OUTER SOLES OF LEATHER

16,137,525 10,892 1,482 € 390,604 178 2,194 2.42

64035991 FOOTWEAR WITH OUTER SOLES AND UPPERS OF LEATHER,

13,736,296 3,043 4,514 € 642,543 294 2,186 4.68

64035999 WOMEN'S FOOTWEAR WITH OUTER SOLES AND UPPERS OF LEATHER,

109,399,059 20,819 5,255 € 515,883 287 1,798 0.47

64039111 FOOTWEAR WITH OUTER SOLES OF RUBBER, PLASTICS

249,808,223 122,408 2,041 € 560,516 422 1,328 0.22

64039113 FOOTWEAR NON-IDENTIFIABLE AS MEN'S OR WOMEN'S FOOTWEAR,

373,894,884 305,388 1,224 € 2,476,479 2,150 1,152 0.66

64039116 MEN'S FOOTWEAR WITH OUTER SOLES OF RUBBER, PLASTICS

519,319,665 334,922 1,551 € 4,083,934 3,459 1,181 0.79

64039118 WOMEN'S FOOTWEAR WITH OUTER SOLES OF RUBBER,

794,254,709 368,667 2,154 € 7,570,852 4,419 1,713 0.95


22,150,557 12,649 1,751 € 967,251 747 1,295 4.37

64039196 MEN'S FOOTWEAR WITH OUTER SOLES OF RUBBER,

39,885,580 27,728 1,438 € 579,884 581 998 1.45

64039198 WOMEN'S FOOTWEAR WITH OUTER SOLES OF RUBBER, PLASTICS

283,513,440 125,428 2,260 € 2,534,254 1,277 1,985 0.89


216,232,673 89,878 2,406 € 2,147,419 1,165 1,843 0.99

64039936 MEN'S FOOTWEAR WITH OUTER SOLES OF RUBBER, PLASTICS ,

49,735,004 33,408 1,489 € 712,001 740 962 1.43

64039938 WOMEN'S FOOTWEAR WITH OUTER SOLES OF RUBBER, PLASTICS

191,954,973 90,663 2,117 € 1,726,397 890 1,940 0.90

64039950 SLIPPERS & INDOOR FOOTWEAR, WITH OUTER SOLES OF RUBBER

41,494,012 37,026 1,121 € 381,509 550 694 0.92


327,305,512 180,515 1,813 € 928,992 783 1,186 0.28


438,346,759 285,301 1,536 € 3,591,105 2,990 1,201 0.82

64039996 MEN'S FOOTWEAR WITH OUTER SOLES OF RUBBER, PLASTICS

1,164,022,664 756,369 1,539 €15,253,453 12,646 1,206 1.31

64039998 FOOTWEAR WITH OUTER SOLES OF RUBBER, PLASTICS FOR WOMEN

1,054,769,591 540,499 1,951 €14,678,614 8,164 1,798 1.39

64041100 SPORTS FOOTWEAR, INCL. TENNIS SHOES, GYM

1,587,569,511 940,217 1,689 € 476,707 809 589 0.03


32

SHOES, TRAINING SHOES 64041990 FOOTWEAR WITH UPPERS OF TEX. MATERIALS

2,121,287,075 2,312,671 917 € 1,235,016 1,587 778 0.06

64061010 UPPERS AND PARTS THEREOF, OF LEATHER (EXCL. STIFFENERS)

767,379,911 216,720 3,541 € 1,157,413 298 3,884 0.15

64069030 ASSEMBLIES OF UPPERS AFFIXED TO INNER SOLES

67,590,861 39,651 1,705 € 1,259,314 576 2,186 1.86

64069090 PARTS OF FOOTWEAR AND SIMILAR ARTICLES, AND PARTS THEREOF

138,195,477 99,447 1,390 € 2,922,248 1,637 1,785 2.11

With a EURO 8 billion market for Footwear with uppers of leather, and a EURO 4 billion market for Footwear with uppers of textile material, Pakistan not only has a large potential market in the EU, it also has the good fortune of solid back linkages domestically, for their raw materials (leather, textile material). Moreover, from the above Table 15, it may be noted that Pakistan’s footwear exports contain quite a diversity of products, though volume of each product is still quite small. On the basis of an over EURO 1 billion market for each, HIGH POTENTIAL products identified in the Footwear group (S-12a), are: Men’s & Women’s Footwear with outer soles of rubber or plastic, Sportswear, and Footwear with uppers of textile materials.

Table 15(1) below compares the market shares and per unit prices for Pakistan’s main competitors for Footwear exports to the EU market. Though value per kg is not a very precise comparison for footwear products, it does give an idea about the pattern of prices. Pakistan’s per unit prices in footwear appear to be the lowest amongst competitors. Despite being a strong producer of leather, plastics, and textile materials, Pakistan has a very insignificant share in the EU footwear market, which seems to have been captured mainly by China, followed by Vietnam and India.

Table 15 (1): Footwear – Competitor analysis Main Non-EU Competitors

H.S.Code Country mkt share value % Euro / 100kg Tariff Landed pr 64041990 Footwear with uppers of textile materials

China 71% € 814 17% € 953 Vietnam 17% € 1,378 13.60% € 1,566 Bangladesh 1.5% € 816 0 € 816 India 0.7% € 1,580 13.60% € 1,795 Pakistan 0.1% € 792 0 € 792

64039998 Footwear for Women with outer soles of rubber or plastics

China 33% € 1,545 7% € 1,653 Vietnam 16% € 1,983 3.50% € 2,052 India 7% € 1,908 3.50% € 1,975 Bangladesh 2% € 2,350 0 € 2,350 Pakistan 1.4% € 1,797 0 € 1,797

64039996: Men Footwear with outer soles of rubber or plastic

China 21% € 1,438 8% € 1,553 Vietnam 20% € 1,518 4.50% € 1,586 India 25% € 1,426 4.50% € 1,490 Bangladesh 3% € 1,557 0 € 1,557 Pakistan 1.3% € 1,206 0 € 1,206

Sugars & sugar confectionery

The group of products comprising Foodstuffs (S-4b) contains a wide range of products; hence it has been sub-divided into four sub-groups, in order to have a closer look at each of the products. These are detailed below in Tables 16A (Sugar & Sugar Confectionery), 16B (Cooked Products), 16C (Prepared Foodstuffs), and 16D (Beverages & Spirits).


33

Molasses appears to be the most high value export in the Table 16A below; however, the Government is not interested in encouraging exports of molasses, as it has imposed a 15% ad valorem regulatory duty on its export. Shown in the Table 16A (1) below is the comparison of competitors in some of the above tabulated sugar confectionery products. Pakistan appears to have a negligibly small market share in these products, despite very competitive prices.

Table 16 A (1): Sugars & sugar confectionery: Competitor analysis Main Non-EU Competitors

H.S. Code Country mkt share value % Euro / 100kg ad val Tariff landed price/100kg 17041010 Turkey 39% € 204 0% € 204

China 29% € 150 6.20% € 160 Pakistan 1.6% € 251 0 € 251

17041090 Turkey 44.2% € 336 0 € 336 Pakistan 2.0% € 243 0 € 243

17049075 Turkey 46% € 148 0.00% € 148 China 10% € 501 6.30% € 532 Pakistan 1% € 171 0 € 171

17049099 Turkey 23% € 362 0 € 362 China 14% € 395 6.30% € 420 Pakistan 3% € 176 0.00% € 176

In the Table 16C, for Prepared Fruit & Vegetable Products, unfermented Orange Juice (liquid state or frozen) appears to be a HIGH POTENTIAL product, with nearly a EURO 1 billion EU market. With a significant domestic production of Oranges, Pakistan has a potential to grab a significantly larger share of the Orange Juice market in the EU.

Ethyl Alcohol (ethanol) appears as a major export product in the Table 16D, below, amongst the group of products Beverages & Spirits (S-4b). However, there is a ceiling on the annual export growth through a safeguard20 mechanism, which restraints the product to be classified as high potential product for Pakistan. Non-alcoholic Beverages could thus be the only product which could be marked as having a HIGH POTENTIAL due to the presence of a significant market size in the EU, and Pakistan already testing the EU market through over a million EURO worth of exports in the CY 2014.

Table 16A: Section 4b- Sugars & sugar confectionery FLOW IMPORT PERIOD Jan.-Dec. 2014 REPORTER EU28

PARTNER EU28_Extra EU28_Extra per unit PAKISTAN PAKISTAN per unit

mkt shar

e

PRODUCT/INDICATORS VALUE Unit(100kg) euro/100kg VALUE Unit(100kg

) euro/100k

g value (%)

17021900 LACTOSE IN SOLID FORM AND LACTOSE SYRUP, BY WT < 99% LACTOSE

2,027,358 4,601 441 € 50,531 259 195 2

17023090 GLUCOSE IN SOLID/SYRUP FORM , NO ADDED FLAVOURING/COLOURING

3,531,379 40,089 88 € 937,513 11,123 84 27

17031000 CANE MOLASSES FROM THE 205,801,199 15,061,414 14 €10,054,278 693,785 14 5

20 Article 29 of EC Regulation states that safeguard would come into effect if quantity (volume) of ethanol increases by over 13.5% over the previous year.


34

EXTRACTION OR REFINING OF SUGAR 17041010 CHEWING GUM, WHETHER OR NOT SUGAR-COATED, < 60% SUCROSE

15,800,578 73,481 215 € 248,078 970 256 2

17041090 CHEWING GUM, WHETHER OR NOT SUGAR-COATED, >= 60% SUCROSE,

11,414,398 36,598 312 € 228,423 945 242 2

17049075 TOFFEES, CARAMELS AND SIMILAR SWEETS

19,705,545 99,982 197 € 190,260 1,125 169 1

17049099 PASTES, MARZIPAN & OTHER PREPRD. SUGAR CONFECTIONRY,NO COCOA

73,406,483 221,353 332 € 2,027,827 11,544 176 3

Table 16B: Section 4b – Cooked products FLOW IMPORT PERIOD Jan.-Dec. 2014 REPORTER EU28

PARTNER EU28_EXTRA EU28_Extra per unit Pakistan Pakistan per unit mkt share

PRODUCT/INDICATORS VALUE Unit(100kg) euro/100kg VALUE Unit(100kg) euro/100kg value(%) 19059030 BREAD,NO ADDED HONEY,EGGS,CHEESE OR FRUIT,<= 5% SUGARS/FATS

116,09,897 63,148 184 226,077 2,064 110 1.95

19059090 PIZZAS & OTHER UNSWEETENED BAKINGS (EXCL. TOASTED PRODUCTS)

113,721,419 516,538 220 521,430 4,710 111 0.46

19053199 SWEET BISCUITS, WHETHER OR NOT CONTAINING COCOA, < 8% MILKFATS

70,071,138 339,787 206 393,474 2,650 148 0.56

19049010 RICE, PRE-COOKED OR OTHERWISE PREPARED, N.E.S.

15,877,315 56,616 280 61,978 198 313 0.39

19023010 DRIED, PREPARED PASTA (EXCL. STUFFED)

154,193,688 968,324 159 196,628 2,151 91 0.13

19023090 PASTA, COOKED OR OTHERWISE PREPARED (EXCL. STUFFED/ DRIED PASTA)

64,327,369 348,480 185 104,193 649 161 0.16

19021990 UNCOOKED PASTA,WITH COMMON WHEAT FLOUR/MEAL BUT NO EGGS

29,697,286 286,189 104 104,089 958 109 0.35

19019091 FOOD PREPARATIONS OF FLOUR,WITH NO MILKFATS,OR < 1,5% MILKFAT

5,707,799 34,446 166 1,021,851 7,286 140 17.90

19019099 FOOD PREPARATIONS OF FLOUR,

42,421,425 186,013 228 610,000 1,610 379 1.44


35

While there appears no product of significant potential in the Table 16B above, it is encouraging to note that Pakistani exporters are managing to export numerous food preparations into the highly regulated EU market.

Table 16C: Section 4b –Prepared fruit & vegetable products PERIOD Jan.-Dec. 2014 REPORTER EU28

PARTNER EU28_Extra EU28_Extra per unit Pakistan PAKISTAN per unit

mkt shar

e

PRODUCT/INDICATORS VALUE Unit(100kg) euro/100kg VALUE Unit(100kg

) euro/100k

g value (%)

20019010 MANGO CHUTNEY, PREPARED OR PRESERVED BY VINEGAR OR ACETIC ACID

13,013,043 144,870 90 82,429 539 153 0.63

20019020 FRUIT OF GENUS CAPSICUM, PREPARED/PRESERVED BY VINEGAR/ACETIC ACID

58,170,462 430,070 135 83,874 467 180 0.14

20019092 GUAVAS,MANGOES,"PAPAYAS", LYCHEES,CASHEW NUTS,"BETEL" NUTS

2,874,592 16,235 177 490,483 3,059 160 17.06

20019097 VEGEES,FRUIT,NUTS & EDIBLE PARTS OF PLANTS

46,447,320 311,132 149 1,248,696 8,595 145 2.69

20029091 TOMATOES, PREPARED/PRESERVED ,DRY MATTER OF> 30%, packing > 1 KG

142,183,852 1,719,008 83 136,458 1,430 95 0.10

20049091 FROZEN COOKED ONIONS ,372,146 1,540 242 24,596 141 174 6.61

20059950 MIXTURES OF VEGETABLES, PREPARED/PRESERVED OTHERWISE,NOT FROZEN

22,149,193 160,387 138 126,604 1,094 116 0.57

20059980 VEGETABLES, PREPARED OR PRESERVED OTHERWISE THAN BY VINEGAR

84,733,054 528,000 160 332,693 2,015 165 0.39

20091199 FROZEN ORANGE JUICE,UNFERMENTED(VALUE<= 30 EURO/100 KG)

60,890,626 424,759 143 430,211 3,362 128 0.71

20091998 ORANGE JUICE, UNFERMENTED, BRIX VALUE >20 BUT<= 67 @20°C

983,577,063 6,913,481 142 344,268 2,587 133 0.04

20097919 APPLE JUICE,UNFERMENTED,BRIX VALUE >67@20°C,VALUE > 22 EURO/100kg

119,120,172 1,152,322 103 244,121 2,420 101 0.20

Table 16D: Section 4b –Beverages, spirits & vinegar


PARTNER EU28_Extra EU Extra per unit Pakistan Pakistan per unit mkt shar

e

PRODUCT/INDICATORS VALUE Unit(100kg)

euro/100kg Value Unit(100kg

) euro/100k

g value (%)

22090011 WINE VINEGAR, IN CONTAINERS HOLDING <= 2 L

708,844 5,959 119 2,025 12 169 0.29

22090019 WINE VINEGAR, IN CONTAINERS HOLDING 475,797 6,516 73 1,886 56 34 0.40


36

> 2 L

22090091 VINEGAR & SUBSTITUTES OBTAINED FROM ACETIC ACID,IN CONTAINERS<= 2 L

5,971,210 43,776 136 6,738 100 67 0.11

23024002 BRAN AND OTHER RESIDUES OF RICE, WHETHER OR NOT IN PELLETS

1,226,223 38,674 32 10,462 235 45 0.85

23024008 BRAN AND OTHER RESIDUES OF RICE, WITH STARCH CONTENT OF > 35%

389,680 20,920 19 10,464 50 209 2.69

23031090 RESIDUES OF STARCH MANUFACTURE AND SIMILAR RESIDUES,

3,006,234 75,921 40 1,322,521 20,856 63 43.99

22021000 WATERS,INCL.MINERAL & AERATED,W/ADDED SUGAR/SWEETENER/FLAVOUR

553,266,797 5,185,133 107 288,781 5,077 57 0.05

22029010 NON-ALCOHOLIC BEVERAGES,NO MILK(EXCL. WATER,FRUIT/VEGEE JUICES)

174,579,573 2,100,295 83 1,073,403 23,976 45 0.61

22071000 UNDENATURED ETHYL ALCOHOL, OF ALCOHOLIC STRENGTH OF >= 80%

323,027,969 4,733,519 68 42,755,115 594,271 72 13.2

4

22072000 DENATURED ETHYL ALCOHOL AND OTHER SPIRITS OF ANY STRENGTH

9,278,755 106,112 87 4,094,508 44,969 91 44.13

Table 17: Section 16 – Electrical & mechanical appliances


PARTNER EU28_EXTRA PAKISTAN mkt share

PRODUCT/INDICATORS VALUE VALUE % 84118220 GAS TURBINES OF A POWER > 5.000 KW BUT <= 20.000 KW € 148,756,209 € 5,217,341 3.5

84118280 GAS TURBINES OF A POWER > 50.000 KW € 217,195,446 € 794,631 84119900 PARTS OF GAS TURBINES, N.E.S. € 2,434,263,152 € 2,385,169 0.1 85044030 STATIC CONVERTERS USED WITH TELECOM APPARATUS, AUTOMATIC DATA-PROCESSING MACHINES

€ 1,873,433,165 € 134,456

85176990 APPARATUS FOR THE TRANSMISSION OR RECEPTION OF VOICE, IMAGES OR OTHER DATA

€ 423,395,172 € 844,807 0.2

85389099 PARTS SUITABLE FOR USE PRINCIPALLY WITH THE APPARATUS OF HEADING 8535, 8536 OR 8537, N.E.S.

€ 1,185,691,685 € 201,108

While the export numbers for Pakistan for products falling under Electrical & Mechanical Appliances (S-16), are low (as may be observed in Table 17 above), it is nevertheless heartening to note that entrepreneurs are making inroads into the highly sophisticated market of electrical/mechanical machines in the EU. In particular, Gas Turbines (5000 to 20,000kw), and Parts of Gas Turbines, stand out as HIGH POTENTIAL products.

This group of products – chapters 84 and 85 of Common Custom Tariff – calls for special attention to be paid by policymakers in Pakistan, as the EU market size is simply huge for these products –over


37

EURO 350 billion in CY 2014. Some of the countries of comparable development as Pakistan are exploiting the EU market to the fullest. India, Indonesia, Malaysia, Philippines, Vietnam exported EURO 4.3 billion, 1.8 billion, 12 billion, 3.5 billion, and 10 billion, respectively, in CY 2014. Even Egypt and Sri Lanka managed to export for EURO 430 million, and 94 million respectively, whereas Pakistan could only manage exports of EURO 55 million to EU in CY 2014.

Table 18: Section 5 –Mineral products


PARTNER EU28_EXTRA EU28 Extra price p.u. Pakistan PAKISTAN price p.u. mkt share

PRODUCT/INDICATORS (Euros) Unit (100kg) euro/100kg Value (Euro)

Unit (100kg) euros/100kg (%)

25292100 FLUORSPAR CONTAINING BY WEIGHT <= 97% CALCIUM FLUORIDE

38,268,577 1,796,186 21 574,261 27,924 € 21 1.50

25261000 NATURAL STEATITE, TRIMMED OR MERELY CUT INTO BLOCKS OR SLABS

36,688,034 2,086,603 18 19,602,386 112,2424 € 17 53.43

25262000 NATURAL STEATITE AND TALC, CRUSHED OR POWDERED

24,818,913 1,038,474 24 9,871,804 598,095 € 17 39.78

25232900 PORTLAND CEMENT (EXCL. WHITE,) 82,517,039 11,904,256 7 3,110,163 263,691 € 12 3.77

25151200 MARBLE AND TRAVERTINE, MERELY CUT, INTO BLOCKS OR SLABS

21,445,010 796,327 27 66,260 5,321 € 12 0.31

25010010 SEA WATER AND SALT LIQUORS 3,753,898 212,501 18 102,731 1,624 € 63 2.74

25010051 SALT, DENATURED OR FOR OTHER INDUSTRIAL USES, INCL. REFINING

11,409,311 3,041,265 4 132,663 9,865 € 13 1.16

25010091 SALT SUITABLE FOR HUMAN CONSUMPTION 31,705,538 4,214,528 8 2,915,094 98,192 € 30 9.19

25010099 SALT AND PURE SODIUM CHLORIDE, (EXCL. TABLE SALT)

60,990,903 11,859,069 5 2,781,308 121,894 € 23 4.56

27090010 NATURAL GAS CONDENSATES 5,738,059,502 92,252,309 62 25,723,276 394,110 € 65 0.45

27090090 PETROLEUM OILS , CRUDE 264,626,075,488 4,794,854,314 55 24,050,494 389,210 € 62 0.01

In the Mineral Products group, as shown in Table 18 above, Natural Gas Condensates stands out as a HIGH POTENTIAL product in the group. While the EU market for this product is huge (nearly EURO 6 billion in CY 2014), there may be a capacity limitation regarding Pakistan’s possible output of this product. Natural Steatite (in blocks or powdered form) is also a product of note, in which Pakistan already controls nearly half of the EU market. However, since the market size is small, much export growth of this product cannot be counted upon. A point to note in Table 18(1) below, regarding competitors in the Natural Steatite market, is that the mineral in powdered form is being sold by Pakistan exporters at way below the price of the next closest supplier, which is China.

Table 18(1): Mineral products - Competitor analysis Main Non-EU Competitors

H.S. Code Country mkt share value % Euro / 100kg 25261000-Natural Steatite in blocks Australia 30 € 15.28

China 12 € 24.75 Pakistan 53 € 17.46

25262000- Natural Steatite crushed or powdered China 36 € 30.38 USA 10 € 92.32

Pakistan 40 € 16.51


38

Table 19: Section 2b – Vegetables & fruits


PARTNER EU28_Extra EU28_Extra price p.u. Pakistan Pakistan price p.u. mkt

share

PRODUCT/INDICATORS Value Unit(100kg) euro/100kg Value Unit(100k

g) euros/100

kg value(

%) 08021290 FRESH OR DRIED ALMONDS, SHELLED

€ 1,296,568,533 2,309,748 561 € 1,634,578 2,563 € 638 0.13

08023200 FRESH OR DRIED WALNUTS, SHELLED

€ 421,430,414 523,924 804 € 87,989 112 € 786 0.02

08029050 PINE NUTS, FRESH OR DRIED, SHELLED OR PEELED

€ 126,305,932 86,657 1458 €31,668,681 18,841 € 1,681 25.07

08029085 NUTS,FRESH/DRIED,SHELLED OR PEELED (Excl. ALMONDS)

€ 5,274,175 11,000 479 € 167,092 236 € 708 3.17

08039010 BANANAS, FRESH (EXCL. PLANTAINS)

€ 3,055,533,707 50,363,976 61

08039090 BANANAS, DRIED (EXCL. PLANTAINS)

€ 7,665,705 32,602 235

08041000 FRESH OR DRIED DATES € 174,420,309 884,318 197 € 7,374,675 90,185 € 82 4.23

08042090 DRIED FIGS € 103,708,718 294,383 352 € 2,666 7 € 381 0.00 08045000 FRESH OR DRIED GUAVAS, MANGOES AND MANGOSTEENS

€ 402,063,033 2,711,740 148 € 8,316,036 38,706 € 215 2.07

08051080 FRESH OR DRIED ORANGES (EXCL. FRESH ORANGES)

€ 949,374 13,007 73 € 6,544 501 € 13 0.69

08052050 FRESH OR DRIED MANDARINS AND WILKINGS

€ 110,716,740 1,029,031 108 € 603,589 16,695 € 36 0.55

08055010 FRESH OR DRIED LEMONS € 282,160,026 2,465,127 114

08055090 FRESH OR DRIED LIMES € 138,627,297 1,136,820 122

08131000 DRIED APRICOTS € 136,433,782 379,734 359 € 449,548 995 € 452 0.33

08133000 DRIED APPLES € 30,104,674 104,583 288 € 13,410 23 € 583 0.04 08134095 DRIED FRUIT (EXCL. NUTS,BANANAS,DATES,FIGS,GUAVAS)

€ 92,844,441 132,960 698 € 651,052 1,425 € 457 0.70

In the Vegetables & Fruits group, seen in the Table 19 above, Dates (fresh or dried), and Mangoes (Fresh or dried) appear to be the HIGH POTENTIAL items in the group. Pakistan is the 3rd largest world exporter of dates, hence this product’s potential. However, looking at the table above, one can observe that Dates are still being exported at way below the average unit price.

Fastest growing products

Now let us look closely at the Sections (product groups), that have registered the fastest growth in CY 2014, as compared to CY 2013, as listed in Table 3 below:


39

Table 3: Fastest growing product groups (sections) Section Description Growth S-1b Fish. 390% S-5 Magnesium Oxide, Quicklime, Cement, Mineral Fuels. 6000% S-7a Plastics. 69% S-9a Wood articles. 769% S-9b Articles of cork; manufactures of straw. 12000% S-14 Semi-precious stones; artificial jewellery. 69% S-15a Ferro-alloys; articles of iron and steel. 90% S-16 Mechanical appliances and electrical machinery. 92% S-17b Parts & accessories of railways, aircraft, boats. 69%

Table 20: Section 1b - Fish FLOW IMPORT PERIOD Jan.-Dec. 2014 REPORTER EU28

PARTNER EU28_EXTRA price p.u.

PAKISTAN price p.u. mkt share

PRODUCT/INDICATORS VALUE Quantity (100kg)

€/100kg

VALUE Quantity (100kg)

€ / 100kg value %

03028910 FRESH OR CHILLED FRESHWATER FISH, N.E.S.

405,007 932 435 3,356 6 559 0.83

03033910 FROZEN FLOUNDER "PLATICHTHYS FLESUS"

195,130 710 275 80,555 340 237 41.28

03061799 FROZEN SHRIMPS AND PRAWNS, EVEN IN SHELL

725,156,401 1,260,918 575 969,463 1845 525 0.13

Frozen Shrimps and Prawns, in this group of products, are showing HIGH POTENTIAL of growth. However, the rapid growth in this sector in CY2014, compared to the year before, is because of the EU ban on Pak fisheries export to the Union from 2007 to 2013, due to the product failing to meet the SPS standards required. In mid-2013, however, the ban was lifted, but only two Pakistani firms were approved for export to EU, while the other exporters were asked to meet the sanitary standards before they could be allowed to export. Gradually, Pak fisheries exports may go back to the levels it had achieved before the EU ban, which was around EURO 40 million. Pakistan is already exporting about EURO 300 million of fisheries products to China and other South East Asian countries.

Table 21: Section 9a – Wood articles


PARTNER EU28 Extra EU28_EXTRA per unit Pakistan PAKISTAN per

unit

PRODUCT/INDICATORS Value(Euro) Unit (100KG) € / 100kg Value Unit

(100kg) € / 100kg

44170000 TOOLS, TOOL BODIES, TOOL HANDLES, BROOM OR BRUSH BODIES, OF WOOD;

33,424,843 225,865 148 4,726 3 1575

44209099 CASKETS AND CASES FOR JEWELLERY OR CUTLERY, AND SIMILAR ARTICLES

137,689,562 288,020 478 11,444 96 119


40

Table 22 – Section 9b – Cork articles


PARTNER EU28 Extra EU28 Extra price p.u. PAKISTAN PAKISTAN price p.u. mkt

share

PRODUCT/INDICATORS Value (Euro)

Units (100kg) euro/100kg Value(Euro) Units(100kg) euro/100kg value

% 46021990 BASKETWORK,& OTHER ARTICLES, FROM VEG. PLAITING MATERIALS

192,850,537 523,824 368 14,919.00 45 332 0.01

46029000 BASKETWORK & OTHER ARTICLES, FROM NON-VEG. MATERIALS

53,208,304 127,669 417 115,215.00 278 414 0.22

Table 23 – Section 14 – Gold silver jewellery PERIOD Jan.-Dec. 2014 REPORTER EU28

PARTNER EU28_EXTRA per unit Pakistan Pakistan per unit mkt share

PRODUCT/INDICATORS Value Unit (100kg) euro/100kg Value Unit

(100kg) euro/100kg value %

71129900 WASTE AND SCRAP OF SILVER, INCL. METAL CLAD WITH SILVER,

€1,475,732,470 284,317 5190 7,065,627 4,626 1527 0.5

71151000 CATALYSTS IN FORM OF WIRE CLOTH OR GRILL, OF PLATINUM

€ 119,046,367 135 881,825

Table 24 –Section 15a- Ferro alloys / Articles of iron & steel


PARTNER EU28 Extra EU28 Extra price p.u. Pakistan Pakistan price p.u. mkt

share

PRODUCT/INDICATORS Value(Euro) Unit (100kgs)

euro/100 kg

Value (Euro)

Unit (100kg) euro/100kg value

% 72042110 WASTE AND SCRAP OF STAINLESS STEEL, 473,096,375 3514929 135 933,531 3468 269 0.20

72041000 WASTE AND SCRAP, OF CAST IRON (EXCL. RADIOACTIVE)

18,058,621 615428 29 122 0 0.00

73069000 TUBES, PIPES (EXCL. SEAMLESS OR WELDED TUBES AND PIPES)

32,770,462 299943 109 253,918 4109 62 0.77

73211190 APPLIANCES FOR BAKING, GRILLING, COOKING 331,667,533 841160 394 37,815 50 756 0.01

73219000 PARTS OF DOMESTIC APPLIANCES NON-ELECTRICALLY HEATED

121,615,797 447532 272 1,911,293 2546 751 1.57


41

Table 25 – Section 17b – Parts & accessories of rail, aircrafts, boats PERIOD Jan.-Dec.2014 REPORTER EU28

PARTNER EU28_EXTRA PAKISTAN market share

PRODUCT/INDICATORS VALUE VALUE value % 87019020 AGRI & FORESTRY TRACTORS, OF AN ENGINE POWER > 18 KW BUT <= 37 KW € 226,672,597 € 22,185 0.010

87019031 AGRI & FORESTRY TRACTORS, OF AN ENGINE POWER > 59 KW BUT <= 75 KW € 156,541,159 € 28,523 0.018

87019050 AGRICULTURAL TRACTORS AND FORESTRY TRACTORS, ( USED) € 50,494,213 € 421,554 0.835

87082990 PARTS & ACCESSORIES FOR:TRACTORS,MOTOR VEHICLES FOR THE TRANSPORT OF >= 10 PERSONS

€ 1,931,875,852 € 60,873 0.003

87084091 PARTS FOR GEAR BOXES OF CLOSED-DIE FORGED STEEL, FOR TRACTORS, MOTOR VEHICLES € 111,338,337 € 2,262,814 2.032

87084099 PARTS FOR GEAR BOXES FOR TRACTORS, MOTOR VEHICLES € 660,971,500 € 1,130,481 0.171

88033000 PARTS OF AEROPLANES OR HELICOPTERS, N.E.S. (EXCL. THOSE FOR GLIDERS) € 9,991,519,244 € 899,436 0.009

Pakistan has a well-developed auto-parts producing sector, and that is reflected in the export figures shown in the Table 25 above. Even sophisticated products – like parts of airplanes and helicopters - were exported to the EU, to the tune of one million EURO. Though not in itself a high value, it nevertheless is indicative of the latent potential and engineering know-how, which if properly supported and encouraged by policymakers, could lead to significant export growth of these high value engineering products.

Policy Focus needed for which products?

From the analysis of best performing product groups in this chapter, it is encouraging to note that Pakistan has managed to export a diversified range of products, within each section of products. Given the high standards demanded in the EU market, Pakistan has done well to export a very large proportion of manufactured products in its total exports portfolio. In the short to medium term however, it appears that the following products have to be focused upon and supported by the policymakers. Domestically, for these products, a strong backward linkage, and a critical mass of manufacturing expertise, already exists. The European Union imported nearly EURO 100 billion of just these four goods in CY2014. Hence policy support for the following should pay rich dividends in the form of significantly enhanced exports to the EU:

1. Knitted readymade garments and woven readymade garments

2. Leather products

3. Footwear

4. Surgical goods


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THE 27 UN CONVENTIONS

It may always be kept in view that GSP Plus is actually a ‘Special Incentive arrangement for Sustainable Development and Good Governance’. Thus after a developing country meets the ‘vulnerability’ criterion, and becomes a beneficiary country after ratifying the 27 U.N. conventions21, the country is required to provide a binding undertaking to maintain ratification of these conventions and ensure effective implementation thereof. Thereafter, the country is required to meet the reporting requirements of each convention, and undertakes to participate in and cooperate with the monitoring procedures. The burden of proof for compliance with its obligations resulting from the binding undertakings shall be on the GSP Plus beneficiary country. If the European Commission finds that compliance is not satisfactory, it may withdraw the tariff preferences granted through the special arrangement, by removing the name of the country from the list of beneficiary countries. Hence, it is imperative for a beneficiary country to organize and plan for an in-house monitoring system for compliance in order to stay vigilant, as well as have appropriate data collection, for assisting the European Commission when it prepares a report on compliance to the European Parliament every two years , starting from January 1, 2016.

In order to provide cooperation to the European Commission for purposes of monitoring the implementation of conventions, the Pakistani Government has set up a Treaty Implementation Cell (T.I.C.). TIC is a high level body, housed in the Ministry of Commerce, Islamabad, comprising of three Federal Secretaries – of Commerce, of Law, and of Foreign Affairs, and Law Secretaries of each of the four provinces. The Cell is currently headed by Advocate Ashtar Ausaaf Ali, who is a Special Assistant to the Prime Minister. Provincial levels T.I.Cs have also been formed, which are headed by the respective Provincial Law Secretary. The Punjab Government has a formed a Cabinet Committee on GSP Plus as well, in order to give due priority to and to oversee implementation of the conventions.

To meet the information / data requirements as per the compliance through the Scorecard22 mechanism, the T.I.C. has developed a roadmap, which identifies legislative and administrative steps that need to be taken up by the federal as well as the provincial governments. This roadmap has been prepared with the assistance of the Federal Ministry of Overseas Pakistanis and Human Resource Development. To date, two such Scorecards have been done, and the last visit of the Assessment Team of the EC was in May 2015. The Team visited various ministries, including the Commerce Ministry, and generally showed satisfaction with progress on monitoring mechanisms for compliance on conventions. TIC is also involving Civil Society Organizations (CSOs), that are engaged in the relevant area pertaining to a specific convention, for the purpose of disseminating information on these 27 conventions.

Eight(8) of the twenty-seven (27) Convention are related to labour rights23 , which are relevant to the business sector, as regards their implementation on the factory-floor. A U.N. agency, the I.L.O. has been very proactive in Pakistan to help educate and train, both business managers and workers, about these conventions pertaining to labour. By engaging the Employers’ Federation of Pakistan (EFP), and the Pakistan Workers’ Federation (PWF), the I.L.O. has undertaken numerous projects through their Decent Work Country Program (DWCP) in Pakistan, in order to develop a public-private partnership, and make tangible progress on implementation of the Conventions pertaining to labor rights. These projects have been undertaken with export-related industries, which would have a positive impact on Pakistan’s Scorecard when EC delegation visits Pakistan to review the implementation of conventions. Following is a short summary of some of the projects:

21 Annex VIII of EC Regulation 978 lists the 27 international conventions. 22 Article 13 of Regulation 978 stipulates that EC would monitor implementation of the 27 conventions by a GSP plus beneficiary. Scorecard shall be the EC’s reporting mechanism to the European Parliament every two years starting from January 1, 2016. 23 Eight Conventions on labour concern: Forced or compulsory labour; Freedom of association and protection of the right to organize; Right to organize and bargain collectively; same pay for same work for men and women workers; Abolition of forced labour; Discrimination in employment and occupation; Minimum age for admission to employment; Elimination of worst forms of child labor.


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1. Soccer Ball Industry Model replicable for child labour elimination: Over 50 representatives from government, workers, employers and economic sector leaders endorsed the Sialkot Soccer Ball Industry Model as a way forward for other industries to do business in the current GSP Plus environment. Participants endorsed the application of International Labour Standards in sectoral supply chains for enhanced productivity and better competitiveness in global markets.

2. Increasing productivity and competitiveness through labour law compliance in Pakistan’s textile sector: ILO and Government of Pakistan signed a Letter of Understanding to support the public-private partnership (PPP) on labour law compliance24, targeting 210 industrial units in the textile sector, in Faisalabad. Starting in February 2015, ten industrial units shall be benefitting from the initiative with a progressive roll out. Planned for three years, the intervention will also attempt to act as a bridge between the domestic industry and the international buyers to enhance compliance through advocacy and dissemination of good practices resulting from the intervention.

3. Strengthened capacity of constituents to address unacceptable forms of work in the textiles and garment sector in Pakistan: Activities include- establishing policy oversight committees at federal and provincial levels to report on International Labour Standards (ILS) and good practices, engage with industrial associations to promote “Responsible Workplace Practices”, initiate a process of social dialogue between workers and employers at enterprise level in the textile and garment sectors. Funded by the governments of Sweden and Denmark, the project timeline is 1 July 2014 – 30 September 2015. More than 20 local and international brands have joined a forum created by the Project, to undertake Decent Work for the sustainability of Pakistan’s textile sector. These brands will work together to promote better compliance with standards in order to allow Pakistan’s textile sector to remain competitive and attractive internationally, while assuring better compliance to international conventions on labour.

4. Instituting Labour standards in global supply chains: Funded by G.I.Z., and running from 1 December 2014 – 30 November 2015, the project shall support all levels of the Pakistani government to strengthen minimum wage fixing and collective bargaining mechanisms, and increase access to information on wages, working conditions, and industrial relations. This is expected to lead to evidence of better implementation of convention concerning right to organize and collective bargaining to fix wages.

In summary, work on implementation on 27 conventions is progressing on a broad front. I.L.O. in Pakistan, a partner for the TIC, already has vast experience on reporting of eight (out of the 27) Conventions pertaining to labour. Similarly other UN agencies are already obtaining annual reports from relevant ministries of the federal government, on conventions on human rights, on environment, and on drug control. Using the experience reporting to UN agencies over the years, these same ministries are partnering with the TIC for specific reporting on the GSP plus as well.

24 This targets better implementation in workplace, of conventions pertaining to labor, e.g. concerning discrimination in employment and occupation, and right to organize and bargain collectively.


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CONCLUSIONS AND RECOMMENDATIONS

When comparing per unit prices of Pakistani products with other competitors, Pakistan consistently appears as the near lowest-priced supplier. Does that imply that Pakistan is a low end supplier, or is it a lack of marketing effort resulting in under-pricing? Similarly, Pakistan’s food products are generally unable to make inroads due to strict Sanitary and Phytosanitary (SPS) standards. Pak fisheries export to the EU stayed suspended from 2007 to 2013. Pakistani Electric Fans are unable to make a dent in the EU market, as fan manufacturers are unable to claim CE marking without which these fans are unacceptable to European consumers. From such analysis in the previous chapters, in particular while sifting for ‘potential export products’ and documenting ‘feedback from exporters’, we are led to offer the following conclusions and recommendations.

Place all your eggs in one basket:

Looking at -Identifying Potential Export Products- it is quite apparent that Textile Made-ups (Section 11b) is the horse to bet on, at least in the short to medium term. Already crossing the EURO 3 billion mark in CY 2014, it still has a world of potential ahead of it. Moreover, this potential is well supported by the domestic textile resources of the country. Starting with ample domestic cotton crop, and the upstream robust yarn and fabric industry, the Textile Made-ups sector has the potential for a quantum leap. Within the Textile Made-ups section, Readymade Garments (RMG) –both knit and woven- deserve a national focus of the policymakers. EU28 imported over 81 billion Euros of Textile Made-ups from the rest of the world in CY 2014 (See Table 1). Out of this sum, lion’s share was of the RMGs, over EURO 72 billion. See Table 26 below:

Table 26: Dissecting Section 11b data

FLOW—IMPORT INDICATORS--VALUE_IN_EUROS MILLION REPORTER--EU28

PRODUCT KNITTED WOVEN PARTNER/PERIOD 1999 2004 2009 2014 1999 2004 2009 2014

EU28_EXTRA 15,249 20,955 27,940 36,679 18,145 23,765 29,608 36,471 BANGLADESH 897 2,192 3,468 6,587 895 1,536 1,705 4,451

CHINA 2,786 4,325 11,600 13,332 3,777 7,262 14,254 15,020 INDIA 752 1,237 1,928 2,306 945 1,248 2,194 2,329

SRILANKA 341 423 667 869 332 392 519 600 VIETNAM 99 144 332 598 513 492 879 1,637 PAKISTAN 249 446 355 772 279 473 544 1,056

EU28_EXTRA 100 137 183 241 100 131 163 201 BANGLADESH 6% 10% 12% 18% 5% 6% 6% 12%

CHINA 18% 21% 42% 36% 21% 31% 48% 41% INDIA 5% 6% 7% 6% 5% 5% 7% 6%

SRILANKA 2% 2% 2% 2% 2% 2% 2% 2% VIETNAM 1% 1% 1% 2% 3% 2% 3% 4%

PAKISTAN 2% 2% 1% 2% 2% 2% 2% 3%

PRODUCT HOME-TEXTILES

PARTNER/PERIOD 1999 2004 2009 2014

EU28_EXTRA 3,061 4,955 6,188 8,578

BANGLADESH 47 132 213 317

CHINA 618 1,398 2,487 3,444

INDIA 481 668 726 988


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SRILANKA 10 7 13 19 VIETNAM 39 81 92 174 PAKISTAN 465 753 792 1,270

EU28_EXTRA 100 162 202 280 BANGLADESH 2% 3% 3% 4%

CHINA 20% 28% 40% 40% INDIA 16% 13% 12% 12%

SRILANKA 0% 0% 0% 0% VIETNAM 1% 2% 1% 2% PAKISTAN 15% 15% 13% 15%

Taking the CY 1999 figures of EU28_Extra as the base year (=100), we look at every succeeding year after a five-year interval, coming up to CY 2014. It can be seen that the base year figure of 100(in CY 1999) increases by 2.41 times for Knitted RMG, by 2.01 times for Woven RMG, and 2.80 times for Home-Textiles, by CY 2014. Though the Home-Textiles shows the highest rate of increase, its CY 2014 figure for EU28_Extra is only around EURO 8.5 billion, which is much smaller to Knitted RMG and Woven RMG figures for that year - of over EURO 36 billion each. Hence, the recommended focus on RMG (Knitted and Woven), despite the fact that in Home-Textiles Pakistan holds a very significant market share of 15%.

Now looking at the country shares of the EU market in Table 26, while Bangladesh has tripled its share of the Knitted RMG from 6% (CY 1999) to 18%(CY 2014), and of the Woven RMG from 5 % to 12 %, Pakistan has just held on to its share of 2% for the Knit RMG and increased from 2% (in CY 1999) to 3% (CY 2014) for the Woven RMG in the fifteen year period.

Besides having a great potential to make a quantum leap in exports through the RMG sector (like Bangladesh), there is a multi-faceted impact of the sector on the country’s socio-economic scenario, as the sector comprises a very large proportion of the manufacturing sector, as well as employment source. Its contribution thus, comes in the form of various forward and backward linkages to suppliers of inputs, banking and insurance, shipping and logistics, transport and communications, the government exchequer, professional services, engineering services, utilities, real estate, and hotel & tourism.(Bhattacharya & Rahman, 2000) Moreover, nearly 70% employees in the export-oriented RMG sector are women. Women’s participation in income generation activities leads to their improved status within the family unit. Women’s earnings lead to reduced dependency on male income, and thus lessen their vulnerability. Studies have also shown that women save more than men, leading to higher family savings.

Within the RMG sector, the EU market for Knitted has been growing faster than for Woven garments, as may be seen from the above table (Table 26). In Pakistan however, the Woven RMG has developed stronger backward linkages, through huge investments on spinning, and weaving units. Specific issues and suggested remedies are detailed below, for RMG, both Knit and Woven:

Recommendations for the RMG sector

a) During the MFA (Multi-fibre Arrangement) regime, Pakistani exporters enjoyed guaranteed quota for Knit RMGs, and were complacent in investment and expansion of the back support of setting up knitting units for production of knitted fabric. Consequently, as the MFA ended, China, which had made huge investments in production of yarn for knitted fabric, as well as the knitted fabric itself, grabbed the lion’s share of the world market for Knit RMG. Also as predicted, the global market expanded significantly in the post-MFA period, while Pakistan’s backward linkage investment in the production of yarn and fabric for knitwear sector fell behind, despite much lower investment required in setting-up of a knitting unit as compared to a weaving unit. This weaker backward linkage is retarding faster potential growth in the Knit RMG. Policymakers may need to provide an incentive structure to stimulate investment in the knitting sector.


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b) Currently, there is a growing demand in the EU market for knitwear, with greater polyester content as compared to cotton. Pakistan’s Knitted RMG has traditionally been more cotton based. While the world’s demand is now closer to 75:25 ratio (between man-made fibre (MMF) and cotton), Pakistan is still producing more in the reverse ratio with cotton still holding sway in the mix. This has led to reduced demand for our Knitted RMG. To import polyester fabrics and other fabrics with high MMF content, the Duty & Tax Remission (DTRE) Scheme is used by the Knitted RMG exporters. However, DTRE has been found to be an extremely onerous arrangement for the Knitted RMG producers, as there are frequent audits involved, which implies cost in the form of increased manpower, as well as potential of corruption. DTRE and the Bonded Warehouse Scheme (BWS) may be much simplified and be made user-friendly.

c) Currently, the EU’s Rules of Origin (RoO) for textile garments allow ‘cumulation’. Cumulation lets Pakistan import fabric-for example- only from other member countries of Group III (India, Sri Lanka, Bangladesh, Nepal, Bhutan), and convert it into a garment for export to the EU, in order to get the duty-exemption under the GSP Plus arrangement. However, Pakistani knit RMG producers are barred from importing knitted fabric of synthetic fiber from India( which is a significant producer of the item), as such synthetic knitted fabrics are placed on the ‘Negative List for Import from India’ under the current Trade Policy. Pakistani knit RMG producers source their knitted fabric from China, thus losing the benefit under GSP Plus, if they intend to export to the EU market. Knitted fabric may thus be removed from the Appendix-G of the Trade Policy.

d) A critical bottleneck in Pakistan, retarding RMG exports (and all other manufactured exports as well), is the gap between demand and supply of utilities – water, gas, electricity. For water, for example, textile dyeing/finishing plants are forced to install in-house reverse osmosis plants, which add to the production costs. Similarly, enterprises are forced to set up their own generators using diesel or furnace oil. Since resulting energy cost is 2-3 times higher than the energy received through the national grid, competitiveness of the resulting products is undermined. SMEs are particularly vulnerable, as they may not be able to afford in-house generators for production.

e) One common weakness is Pakistan’s inability to go into higher-end RMG products, where quality, lead time, fashion and design are critically important for the EU buyer. That could be the reason for low per unit price of Pakistani RMG products, as may be seen in Tables 7A(1) and (2). Though a few of the producers are managing to enter by ‘branding’ their product for higher-value, it is largely out of bounds for most manufacturers, as it calls for a huge investment outlay. The national Trade Promotion Organization (TPO) could come in and provide consultants to qualified producers, and thus help these producers launch brands for their product lines.

f) RMG clusters may be set up on a federal-provincial collaboration basis, like the Garment City project in Faisalabad. Each cluster location may be declared a mini Textile City, where 24/7 supply of utilities may be guaranteed, along with specially trained security force. A 10-year tax holiday may be allowed for setting up RMG units in these clusters, provided a minimum number of workers are employed. There may be distinct Knitted RMG clusters, and Woven RMG clusters. Such clusters improve supply chain responsiveness, provide easier access to market talent, and substantially lower logistic costs. Each cluster can be made a model of social compliance through internal auditors.

g) Global Value Chains (GVCs) are steadily garnering larger and larger share of international trade. The national TPO be given a task to invite, and facilitate opening of office space on a gratis basis in Pakistan, for world famous brands, like GAP, MANGO, H &R, etc. This will help medium-sized local producers by making it easier for them to become part of a GVC, and thus improve their standards and processes. Moreover, the TPO should continuously be in touch with the Buying Offices or Liaison offices of well known international companies already operating in the country, like Walmart and Target.


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h) ‘Product Champions’ in each of the product categories of RMGs be identified, and be given wide publicity through state media, and embassies and missions abroad. These champions may be identified both on ‘highest total export’ basis, and on ‘highest per unit price basis.

i) Product Display Centres may be developed at strategic locations in the EU commercial centres, where maximum exposure for the quality and range of products may be seen, for Pakistan RMG products.

j) Domestically, RMG trade associations be empowered to better serve the sector through enhanced funding via the Export Development Fund. These funds be utilized by the associations for increased international marketing efforts, as well as a Product Development Centre for diversifying into newer products within the RMG sector. Currently, very few tariff lines are being utilized, even within the RMG chapters. Pak RMG exports are more focused towards the Men’s Wear, whereas there is greater scope for Women wear, and Children wear, in the EU market. Similarly, 65% polyester content in RMGs is the current demand, but Pak products still emphasize 70% cotton fibre content.

Capacity-building of other high potential sectors:

In Chapter titled “Identifying Potential Products”, besides the RMG sector, Leather Products, Footwear, and Surgical Goods, were the other sectors identified for their high export potential to the EU market. It is suggested that Sectoral Studies for each of these three sectors be undertaken to generate further understanding of the lagging factors holding back these sectors from significantly enhanced export growth rates. However, following are recommendations to generally strengthen the capabilities of the export sector, which flow from the analysis in the previous chapters, in particular:

a) In the food sector (including Fruits & Vegetable, Fish & Meats etc.), there are strict SPS (Sanitary & Phytosanitary) requirements in the EU market. Similarly, in Footwear, and other Light Engineering sectors, strict TBT (Technical Barriers to Trade), and Labelling requirements have to be complied with. In talking to exporters of Surgical Goods, and Electric Fans, it was revealed that obtaining certifications of product safety, or product standardization, is an essential but a very expensive proposition. Hence support in getting such certifications, and capacity-building in SPS and TBT compliance, is a major need in efforts to maintain and enhance exports to the EU market. A sector-wise survey of the industry may be undertaken to identify specific certification needs of each sector. Once identified, an aggressive drive be undertaken to persuade more and more exporting firms to obtain respective certification, through subsidy and logistic support. Also more labs in the country be helped to obtain accreditation from international bodies.

b) Aid-for-Trade and other such support may be employed for supply-side capacity building. Pakistan needs projects like: Quality Management System and Conformity Assessment Activity, Quality Support Program, Market Access & Trade Facilitation Support, Strengthening Institutional & National Capacity Related to Standards, Metrology, Testing & Quality (SMTQ). Lack of capacity in all those areas has cost implications. The advantage in terms of lower duties is often neutralized by the absence of requisite competencies.

c) In the Footwear sector, emphasis is placed on the ‘basic’ footwear, as compared to the high-end or ‘branded’ footwear. It is the basic footwear, where there is the largest demand, and Pak producers have a greater chance of making deeper inroads. The high-end products would then follow, once Pak Footwear producers are well-established in the basic footwear market.

Institutional Strengthening of the Trade Support Organs (TSOs) of the State

a) Specialization is the need of the hour, as international trade gets more and more complex. The ‘generalist’ nature of public servants deputed for trade matters has to be phased out. People specifically trained in various aspects of trade (Trade Finance, International Marketing, Brand Management, Trade Statistics, Trade Market Research, etc) need to be recruited, and placed at relevant positions, for a continued period of time. Institutional memory needs to be archived, and data and statistics need to maintained in a manner that it is


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accessible for researchers. Similarly, National Product Officers be groomed, and be trained and –more importantly -retained by the national TPO- Trade Development Authority of Pakistan (TDAP)- and involved in all activities / projects/ policy-making for the specific product.

b) Pakistan urgently requires an image make-over, as its state organs make progress to improve law and order situation on ground. This has to be a major undertaking to portray a positive picture of Pakistan as a friendly business destination. The national TPO could take the lead in close partnership with the national / provincial tourism departments, sports and culture wings, as well as our missions abroad. A Steering Committee comprising of representatives of these various agencies, headed by an Additional Secretary in the Ministry of Commerce, may be formed to crystallize a short as well as medium term agenda going forward. Pakistan’s Trade Officers in the EU capitals may also be brought on board to execute the agreed agenda.

c) Trade Officers posted within Pakistan’s missions abroad need to play a crucial role as salespeople for Pakistani products. These positions need to be incentivized through a commission paid to them on enhanced export orders achieved by them. The funds could be paid from the Export Development Fund, managed by the Ministry of Commerce. Specific duty templates may be developed to monitor their activities by the national TPO. The Ministry of Commerce prepared an “Operation Manual for Trade Officers Posted Abroad” in 1982, but it has never been updated nor has it been followed by the Trade Officers.

Better implementation of 27 conventions:

Since the burden of proof is upon the GSP Plus beneficiary country to provide evidence of implementation, it is imperative that due attention is paid to the monitoring mechanisms, especially at the provincial level. The following steps are recommended, to meet this objective:

a) The Ministry of Commerce (MOC) may be declared the focal ministry for the implementation monitoring mechanism, as it is the lead ministry in pushing up Pak exports through the GSP Plus arrangement. Though the Ministry liaises with other ministries –both federal and provincial- the MOC may be designated as the lead ministry to design and set-up monitoring mechanism within the ministries teamed up in the T.I.C. Special funding be provided to the MOC to hire appropriate staff, which are exclusively focused upon implementation mechanisms in the provinces.

b) The federal T.I.C. (Treaty Implementation Cell) may set up a ‘27 Convention Awareness’ website, and hold information seminars and workshops in all provincial capitals, engaging the private sector through active bodies of entrepreneurs, like the Pakistan Business Council (PBC), and the Employers’ Federation of Pakistan (EFP), and national labor bodies like the Pakistan Workers Federation (PWF).

c) T.I.C. may co-opt representatives from the private sector, at provincial levels, to give the private sector input to the Provincial T.I.Cs, regarding the monitoring mechanism. Moreover, active civil society organizations may also be asked to nominate a rep each to be part of the provincial T.I.Cs, since the European Commission shall assess conclusions and recommendations of the relevant monitoring bodies as well as information submitted by third parties including civil society organizations.

d) A Scorecard sample may be circulated amongst trade bodies, and be placed on the TIC and / or MOC website. Seminars / workshops maybe held in various cities, where MOC reps (secretary of TIC) would deliver information on the significance of implementation of the ratified conventions.

e) Brochures may be printed and distributed both in English and Urdu, explaining in plain language, what specific steps are to be taken on factory floors in order to comply with the conventions, and what data should be maintained, to be provided to any compliance monitoring body.


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f) Federal Ministry of Overseas Pakistanis and Human Resources Development, is already working with I.L.O. Pakistan, through the DWCP (Decent Work Country Program), on numerous issues regarding improving compliance to international labor laws and standards, in Pakistan. The Secretary of this Ministry may be co-opted as a member of T.I.C. This will add experience and expertise on reporting mechanism for 8 out the 27 Conventions, pertaining to labour laws and standards.

g) A quarterly report be prepared by Provincial T.I.C. as per the Scorecard template, and be communicated to the federal T.I.C. secretary at the Ministry of Commerce, who may then consolidate these reports for presentation at quarterly meeting of the federal T.I.C. At that time, decisions may be made regarding sectors which may be lagging in compliance/implementation of the Conventions, or may not be reporting the status in the agreed-upon template.

The following table (Table 27) summarizes the key recommendations, emanating from the Study itself, as well as those received through the Public-Private Dialogue held at Islamabad on October 7, 2015.

Table 27: Key policy

Horizontal Policies

Issue Current Approach Intervention Outcome

27 Conventions Although the T.I.C. is formally constituted, there is no permanent infrastructure in terms of staff, equipment and premises for a TIC secretariat.

The Treaty Implementation Cell (T.I.C.) be strengthened through a formal structure and by enhancing material and manpower resources. Thus a permanent structure be planned for the TIC within the Ministry of Commerce, for hiring of staff and providing funds for the TIC to operate and communicate with the provincial TICs.

Pakistan will be able to sustain the status under GSP Plus, as the TIC would be able to perform its role much more effectively.

27 Conventions

Businesses have very little information on how the Conventions relate to their specific export business to EU under GSP Plus.

TIC may set up a 27 Conventions Awareness Portal. This may be an interactive portal, where not only complete information is provided about the conventions, but queries and questions may also be answered through a forum.

Businesses shall be better informed about implementation of relevant Conventions.

27 Conventions

Only government officials are involved in implementation of Conventions, and there is no mechanism to involve the private sector.

TIC may co-opt representatives from the private sector to become part of the provincial TICs to assist in implementation of the Conventions, and reporting on the implementation to the federal TIC.

Better implementation from joint public-private monitoring.

Labour Law

Businesses are not well-informed about applicable labour laws.

Sensitizing, and consolidation and simplification of labor laws by collaborating with the ILO chapter in Pakistan.

Eight out the 27 Conventions, pertain to Labor, and are relevant to business-people exporting under GSP Plus scheme, leading to better implementation of Conventions.

Certification

Very little understanding exists about SPS rules, particularly in food exports. This hinders export growth, and even existing fisheries exports to EU has suffered due to lack of SPS compliance.

Capacity-building for SPS compliance and support in obtaining relevant certifications.

Food products, like Fruits & Vegetables and other cooked foods can exploit the huge EU market.

Certification

Light engineering exports face a roadblock when attempting to enter EU, as knowledge of TBT compliance is lacking.

TBT compliance capacity-building and support in obtaining relevant certifications or markings like CE.

Pak electric fan exporters, for example, and other similar light engineering products make inroads into the EU market.


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Capacity-Building

Supply-side limitations neutralize the positive potential trade preferences offer.

Projects be undertaken to enhance supply-side capacity: like Quality Support programs, Benchmarking standards, etc.

Improved quality and standardization of products improves export capacity.

Strengthening of TSOs

Generalists in TSOs leads to lack of competent support to SME exporters.

Specialists be hired for specific areas of Trade Finance, International Marketing, Brand Management, Trade Market Research, Trade Statistics.

SMEs better-equipped to make use of the preferential schemes, like the GSP plus.

Strengthening of TSOs

Product knowledge is scarce in the TSOs and that results in poor policy support.

National Product Officers (NPOs) be groomed and be given high visibility and responsibility.

National Image-building.

International media portrays a worse-than-reality image of Pakistan.

Media Strategy be formulated and implemented to portray a positive national image and an attractive business destination.

International Buyers more willing and motivated to travel to Pakistan to seek business opportunities.

Trade Officers Abroad.

No well-defined work structure for a T.O. leaves it on individual initiative only. Hence the results are spotty at best.

Duties of a Trade Officer (T.O.) be streamlined through updating of an 'Op Manual' ; also KPIs be designed to monitor individual performance as an T.O.

Well-defined duties & responsibilities of a T.O. will result in better performance, which is also measureable.

Strengthening of trade associations

Private sector is not involved in policy- making. Hence optimal policies and support-projects are not forthcoming. Trade associations feel no ownership in existing national plans, and neither do they have resources to make solid contribution.

Trade associations be supported through funding and capacity-building. Product Development Cells be set-up. associations should hold information dissemination seminars about GSP Plus in their respective trade areas, as well as smaller cities and districts.

Engaged and empowered trade associations will enthusiastically engage in projects for product diversification, value-addition, and quality benchmarking.

Sector-specific Policies Readymade Garments (RMG)

While woven RMG enjoy strong backward linkages, Knit RMG sector is performing below potential due to lack of knitted yarn and knitted fabric in the country.

Provide an incentive structure to stimulate investment in knitting sector.

Knit RMG exports would achieve the same volumes of exports as woven RMGs.

RMG Currently Pakistan's knit RMG exports have high cotton content as compared to MMF content, while the world demand is for higher synthetic content.

Knitwear RMG may be supported to move into more MMF content in fabrics & garments, as compared to cotton content, and by simplifying DTRE and BW schemes.

Higher synthetic content in knit RMGs will result in rapid rise in export demand of Pak products.

RMG Insufficient domestic supply of synthetic knitted fabric in the country, is holding back knit RMG exports .

Pakistani Knit RMG exporters be allowed to import synthetic knitted fabric from India, by removing the item from Appendix-G of the IPO.

Immediate availability of synthetic knitted fabric will allow Pak knit RMG exporters to utilize the 'cumulation' provision in GSP Plus RoO.

RMG Pak RMG exports suffer

from being viewed as 'cheap', being one of the lowest per unit price.

TDAP may provide 'Branding Consultants' to qualified RMG exporters.

Increased exports of branded RMGs would result through higher per unit price of products.

RMG Lack of utilities, skilled

labor, security is hindering rapid growth in RMG exports

RMG Clusters be launched at appropriate locations throughout the country.

Garment cities (clusters) would attract investment in RMG units.


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RMG Lack of big-name buying offices is resulting in fewer export orders from Pakistan.

TDAP may invite and provide support to world recognized brands to establish buying offices in Pakistan.

Presence of buying Offices of internationally reputed brands boosts export orders for RMGs.

RMG

No institutional or structured focus on improving product competitiveness.

Initiate value-chain assistance programs in RMG sector for waste-reduction.

Waste reduction will lead to reduction in production costs and improve competitiveness.

Leather Products Footwear, and Surgical Goods

Despite very high export potential, these product groups are performing much below potential due to lack of institutional focus on the sectors.

Identified as High Potential Products through this Study, ‘comprehensive sectoral studies be commissioned

Identification of factors holding back growth in these high potential sectors can give a big export boost.


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ANNEX 1: QUESTIONNAIRE FOR EXPORTERS

Company Name & Address:

Q U E S T I O N A I R E

1. What product do you export? (Description and H.S. Code). Please provide volumes and values, and destination of exports (e.g. in the last 12 months.)

2. Do you export to the EU?

3. If Yes, do you know what tariff (custom duty) is paid by your customer in EU?

4. Do you acquire Form A (certificate of origin), for your shipments to EU?

5. Are you aware of the GSP Plus scheme?

6. Do you know if your product gets duty-free access to the EU?

7. Does your EU customer know that he can get duty-free import of your product?

8. Do you have any trouble in getting the Form A (COO) from relevant government authority?

9. Have your exports to the EU increased after GSP Plus, i.e. after Jan.1, 2014? If Yes, how much?

10. Have you increased production for export to the EU?

11. If YES, has the increase in production come through:

• Increase in manpower

• Increase in machinery

• Both or Neither

12. Are you aware of the Labor Laws, regarding workers safety, and issues of child labor?

13. Are you aware of the aware of the Women’s’ rights regarding female workers at your factory?

14. Do you have any difficulty (or bottleneck) in meeting the EU market requirements?


53

ANNEX 2: MAIN FINDINGS FROM QUESTIONNAIRES

Companies

Company Product Production after

GSP+ increase/decrease

Main issue

Vision Instrument Company, Sialkot

Surgical dental instruments No change none

A-one Surgico (pvt) Ltd., Sialkot

Surgical dental instruments No change None

Eltek instruments, Silakot Surgical dental instruments Increase Cost of compliance is very high

Prestige Surgical Instruments (Pvt) Ltd., Silakot

Surgical dental instruments No increase Cost of compliance is very high

Elmed Instruments, Sialkot Surgical dental instruments Increase Cost of compliance is high Alframed, Sialkot Surgical dental instruments Increase Cost of compliance is too

high Sabri Industries Surgical dental instruments Increase None Hundal Group, Sialkot Leather safety products

(gloves, jackets, workers garments)

Increase Price competition with China and India

Danish Trading Corporation,

Leather safety gloves Increase None

Kumail enterprises Leather gloves Increase None Owais Leather Industries Leather Gloves No change None Fine Garments Industries, Lahore

Working Garments No change None

Lucky Textiles Mills, Karachi

Synthetic fabrics, curtains, bedwear

Increase Euro devaluation prevailed in the year 2015 caused pressure for price increase. Customers placed orders at short lead time while they were uncertain about quantities to be ordered. Asking of compensation and discounts, if stocks not selling well in stores. Long credit time LD 90 days

Aqsa Trading Company Baby garments of non-cotton textiles

Increase None

A.Z Apparel Limited, Faisalabad

Knitted garments No change None

Genius Textiles Limited, Faisalabad

Home textiles No Change None

Klash Textiles, Faisalabad Knitted garments No change None Novatex Limited, Karachi PET resins No change in

production but export to EU decreased

4% additional CVD duty and increased competition especially from China

Precision Products Enterprises, Lahore

Plastic caps, Liquid level gauges

No change None

Moon Rice Corporation, Karachi

Rice No change None

Sana Traders, Karachi Salt No change None Evershine Jewellers, Karachi

Gems & Jewellery No change None

Belvin Fans, Lahore Electric fans No Change Very high cost of certification


54

Associations

Company Product Production after GSP+ increase/decrease Main issue

Pakistan Gem Merchants & Jewellers Exporters Association

Gems & Jewellery

No Change Nothing, as it is already zero rated under normal GSP

Pakistan Fan Manufacturers Association

Electric fans No change Very high cost of Certification and short season of two months

Pakistan Readymade Garments Manufacturers & Exporters Association

Garments (Apparels)

Increase No conducive and focus export policy for GSP+


55

ANNEX 3: BUSINESS PERSONS INTERVIEWED

Mr. Atiq Kochra, M/s. Rajby Garments, Karachi

Mr. Ijaz Khokhar, Chairman, Pakistan Readymade Garments Manufacturers & Exporters Association

Mr. Habibur Rehman, Chairman Export Sub-Committee, Pakistan Gems Merchants & Jewellers Association

Mr. Azhar Aslam, Chairman, Pakistan Electric Fans Manufacturers Association, Lahore

Mr. Shabbir Dewan, M/s. Novatex, Karachi

M/s. Lucky Textiles Mills, Karachi

Mr. Ali Baloch, M/s. ZIQI Enterprises, EPZ, Karachi

Ms. Sumera Mansoori, Export Manager, Ismail Industries, Karachi (Candyland)

Deputy Director (Gems & Jewellery), TDAP, Karachi

Assistant Manager (Agro Food Division), TDAP, Karachi

Assistant Manager (Europe Division), TDAP, Karachi

Assistant Manager (Exhibition Directorate), TDAP, Lahore

Secretary General, Surgical Instruments Manufacturers Association of Pakistan, Sialkot


56

ANNEX 4: RATIFIED UN CONVENTIONS UNDER GSP +

The following 27 conventions, already ratified by Pakistan, have to be implemented in order to continue enjoying the GSP Plus status:

1. Convention on the Prevention and Punishment of the Crime of Genocide (1948)

2. International Convention on the Elimination of All Forms of Racial Discrimination (1965)

3. International Convention on Civil and Political Rights (1966)

4. International Convention on Economic Social and Cultural Rights (1966)

5. Convention on the Elimination of All Forms of Discrimination Against Women (1979)

6. Convention against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1984)

7. Convention on the Rights of the Child (1989)

8. Convention concerning Forced or Compulsory Labour, No.29 (1930)*

9. Convention concerning Freedom of Association and Protection of the Right to Organize, No.87 (1948)*

10. Convention concerning the Application of the Principles of the Right to Organize and to Bargain Collectively, No.98 (1949)*

11. Convention concerning Equal Remuneration of Men and Women Workers for Work for Equal Value, No.100 (1951)*

12. Convention concerning the Abolition of Forced Labour, No.105 (1957)*

13. Convention concerning Discrimination in Respect of Employment and Occupation, No.111 (1958)*

14. Convention concerning Minimum Age for Admission to Employment, No.138 (1973)*

15. Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No.182 (1999)*

16. Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)

17. Montreal Protocol on Substances that Deplete the Ozone Layer (1987)

18. Basel Convention on the Control of Trans boundary Movements of Hazardous Wastes and their disposal (1989)

19. Convention on Biological Diversity (1992)

20. The United Nations Framework Convention on Climate Change (1992)

21. Cartagena Protocol on Bio-safety (2000)

22. Stockholm Convention on persistent Organic Pollutants (2001)

23. Kyoto Protocol to be United Nations Framework Convention on Climate Change (1998)

24. United Nations Single Convention on Narcotic Drugs (1961)

25. United Nations Convention on Psychotropic Substances (1971)

26. United Nations Convention against illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)

27. United Nations Convention against Corruption (2004)


57

ANNEX 5: LIST OF EU 28 MEMBER STATES

Austria

Belgium

Bulgaria

Cyprus

Croatia

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxemburg

Malta

Netherlands

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

United Kingdom

Photos: © Thinkstock.com

Address: Trade Related Technical Assistance (TRTA II) Programme, Programme Management Office (PMO), 7th Floor, Serena Business Complex, Khayaban-e-Suharwardy, Sector G-5/1, Islamabad, Pakistan

Telephone: +92 51 8354 810

Fax: +92 51 2600 124

E-mail: [email protected]

Internet: http://trtapakistan.org

For enquiries and further details about Component 1 contact: Khalid Hanif, Programme Officer (Trade Policy), International Trade Centre (ITC), EU funded TRTA II programme, Islamabad, E-mail: [email protected]

THE PROGRAMME IS IMPLEMENTED BY UNIDO IN ASSOCIATION WITH ITC & WIPOTHE TRTA II PROGRAMME IS FUNDED BY THE EUROPEAN UNION

PITAD IS THE FOCAL POINT FOR THE TRTA II PROGRAMME

The International Trade Centre implemented the Trade Policy Capacity Building Component of the European Union funded TRTA II programme. It is aimed at the Ministry of Commerce and Government of Pakistan in developing a coherent trade policy and attendant regulations for export competitiveness. Specifically, it will aim to reinforce the skills of government officers working in trade related ministries and implementing agen-cies on issues related to trade policy, commercial diplomacy and regulatory reform. The main way in which to achieve this through the institutional capacity building of key local training institutes, which is intended to have an immediate effect on the capacity of government officers working on trade policy issues.

In addition, Component 1 promotes comprehensive, regular and well informed public-private dialogue among the government, private sector and civil society for trade policy development, monitoring and evaluation. To promote local ownership and legitimacy of the dialogue, a steering committee comprising equal representa-tion of the public and private sectors has been established with the formal approval of the Ministry of Com-merce of Pakistan. Its mandate is to oversee the planning, implementation and monitoring of public-private dialogue on key issues. To better inform the public-private dialogue process, research studies are commis-sion and internationally peer reviewed before dissemination to stakeholders. After extension of the TRTA II programme, Component 1 was assigned the additional responsibility of building the institutional capacity of the Competition Commission of Pakistan (CCP).

The targeted interventions of Component 1 to achieve these goals constitute the following:

Result for Component 1: Coherent trade policy and regulatory reform for export competiveness

1. The Pakistan Institute for Trade and Development (PITAD) institutional capacity is strengthened.2. PITAD’s and other research institutes’ expertise on trade policy strengthened.3. Government officers’ capacity on specific trade policy and international trade negotiations strengthened.4. Research studies contributing to the development of a national export strategy conducted.5. Public-private dialogue for a coherent national export strategy is fostered.6. Institutional Capacity of CCP is strengthened.

For further information about the ITC implemented Component 1 and the TRTA-II programme visit: http://trtapakistan.org

TRADE RELATED TECHNICAL ASSISTANCE PROGRAMME

BEYOND THE GSP PLUS STATUS

MAINTAINING THE STATUS AND ENHANCING

TRADE WITH EU

Documents

MAINTAINING THE STATUS AND ENHANCING TRADE WITH EUtrtapakistan.org/wp-content/uploads/2016/01/BEYOND... · 1 import data for EU28 Member States. The adopted methodology was that of