EU new rules to ben­e­fit ex­porters

The Pak Banker - - 4editorial -

Earn­ing the rev­enues and for­eign ex­change or ar­range the fi­nan­cial tools are the big is­sues of the day of any coun­try as well as of busi­ness­men, man­u­fac­tur­ers, im­porters and ex­porters. De­vel­op­ing coun­tries de­pend on ex­ports to earn for­eign ex­change. For the many years the ex­porters of Pak­istan are fac­ing a num­ber of dif­fi­cul­ties while im­port­ing or ex­port­ing the prod­ucts. The ex­porters of the Pak­istan were not happy with the rules set by Euro­pean Com­mis­sion. Now Euro­pean Com­mis­sion has re­vised rules of ori­gin for prod­ucts im­ported un­der the Gen­er­alised Sys­tem of Pref­er­ences (GSP). As the new reg­u­la­tion to be en­forced from Jan 1, 2011, would im­mensely ben­e­fit Pak­istan and other de­vel­op­ing coun­tries on their ex­ports to least de­vel­oped coun­tries. New reg­u­la­tion re­laxes and sim­pli­fies rules and pro­ce­dures for de­vel­op­ing coun­tries wish­ing to ac­cess the EU's pref­er­en­tial trade ar­range­ments. EU elim­i­nates the twostep process for pro­duc­tion of ready­made cloth­ing. Thus im­ported fabrics can be used by the least de­vel­oped coun­tries (LDCs) and they can still get a GSP plus sta­tus for ex­port­ing to EU mem­bers. Pak­istan may be one of the biggest ben­e­fi­ciary, spe­cially while ex­port­ing fabrics to Bangladesh. When new rules comes into af­fect, Bangladesh gar­ment man­u­fac­turer us­ing Pak­istani fab­ric for pro­duc­tion of cloth­ing and ex­port to EU coun­tries would also get a duty-free GSP plus sta­tus. Ear­lier, the Bangladesh gar­ment sec­tor was only get­ting duty free sta­tus on us­ing their lo­cal made fabrics. New law would help boost ex­port of fab­ric from Pak­istan to Bangladesh. Be­fore this Bangladesh Tex­tile Mills As­so­ci­a­tion had been dis­cour­ag­ing such moves to ben­e­fit their lo­cal mills. No doubt now by up­dat­ing the EU's rules of ori­gin will help de­vel­op­ing coun­tries to get re­ally ben­e­fit from trade pref­er­ences. Rules of ori­gin are used to de­ter­mine whether im­ported goods re­ally orig­i­nat in coun­tries cov­ered by the EU's pref­er­en­tial trade ar­range­ments, thereby mak­ing them el­i­gi­ble for a pref­er­en­tial cus­toms tar­iff. The cur­rent rules of ori­gin, which date back to the 1970s, have been crit­i­cised for be­ing too com­plex, too strin­gent and out-of-date.

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