European Apparel and Textile Confederation (Euratex) has opposed changes to the Generalised System of Preferences (GSP) proposed by the European Union (EU) Commission to grant duty-free access to Pakistan, a statement said on Thursday.
Euratex believes the changes will increase the vulnerability threshold of the GSP+ from one percent to two percent, which will have a severe impact on the EU textile and clothing industry.
"This increase in the vulnerability threshold of GSP+ was tailor made in order to include Pakistan among the beneficiary countries," said Alberto Paccanelli, President, Euratex.
"If this proposal is approved, Pakistan will be allowed to export to the EU without paying any duty."
Euratex argues that this is not the first time that the EU has decided to grant duty-free access to Pakistan, with a change in the vulnerability threshold of GSP+ already under consideration last year and a waiver proposal, pending at the World Trade Organisation (WTO).
"Pakistan is among the top world exporters in textile and clothing and the fourth EU supplier," said Paccanelli.
In 2010 its exports to the EU have increased by more than 20 percent in value and six percent in volume. For some products Pakistan had already a dominant position � bed-linen and cotton fabrics.
This decision, apart from having a negative impact on the EU industry, will erode the preferences of the countries in need in favour of a stronger and already prevailing market player.
"Euratex recognises that overall the commission proposal makes an effort to concentrate the preferences in the countries that need them. Unfortunately, in our sector this effort was precluded for political reasons as we choose to benefit a country, which does not need any special treatment," said Paccanelli.
Euratex hopes the negative impact can be offset through a reduction in the vulnerability threshold and an improvement in the existing textile safeguard clause, making it applicable both to textiles and clothing.