Inside Financial Markets

Post Brexit -UK assures Pakistan GSP Plus-like trade package

The United Kingdom has assured Pakistan that it would extend a package similar to the Generalised Scheme of Preference (GSP) Plus in the backdrop of Britain’s decision to exit the 28-nation European bloc in a referendum on June 23, 2016.

“Ministry of Commerce Secretary Azmat Ali Ranjha was in the UK last week to figure out the future course of action in relation to bilateral trade in the wake of Brexit,” said a senior officer in the Ministry of Commerce.

After Germany, the United Kingdom is Pakistan’s largest trading partner in the EU with an export volume of $1.7 billion annually.

“We are happy that the UK authorities have responded to us very positively; we have been assured that Pakistan would be given a handsome package for trade, in line with the GSP Plus as available for Pakistan in the EU markets,” said the official.

Moreover, he said that Pakistan had two options: either to get a package similar to that of GSP Plus from UK to access its markets or sign a FTA; the latter though was not very favourable as Pakistan would also have to give concessions in return to the UK.

“The package will be finalised before the GSP Plus status with UK comes to an end ie within two years,” he said.

Since Britain is parting ways with the EU, Pakistan would not be able to enjoy the GSP Plus status – which allows it to export its products at zero or reduced duty to the European markets – in the UK.

The visit of the Ministry of Commerce Secretary was on the desire of the UK authorities in response to a letter written by the Minister of Commerce Khurram Dastgir soon after he took over as trade minister.

Dastgir suggested considering alternatives to the GSP Plus facility to promote and streamline trade between the two sides.

Earlier, the Ministry of Commerce had written to the Foreign Office, expressing its desire to be made part of the strategic dialogue with the UK to take up trade matters as well. Trade between Pakistan and the UK stood at 2.06 billion euros in 2015. Of this, Pakistan’s exports to the UK amounted to 1.355 billion euros while its imports stood at 0.704 billion euros, with balance of trade tilted in favour of Pakistan.

Pakistan’s exporters have enjoyed duty-free access to the UK since January 2014 under the EU’s GSP Plus scheme.

Since then, exports to the UK have grown about 40%.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)