EU new rules to benefit exporters
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current rules of origin, which date back to the 1970s, have been criticised for being too complex, too stringent and out-of-date.