THE IMPACT OF GENERALIZED SCHEME OF PREFERENCE (GSP+) ON PAKISTAN’S TEXTILE EXPORTS

Objective of the study is to evaluate the available economic evidence on the operation and effects of the European Union's Generalized System of Preferences (GSP) on the textile exports of Pakistan. The prospects of duty-free exports under the GSP Plus access for textile and clothing suggest enormous scope for Pakistan’s exports expansion. The study critically assesses the granted GSP Plus status and its relationship with textile exports of Pakistan. Both, primary and secondary data is used to measure the effect of GSP. Data of textile exports is taken from the official website of State Bank of Pakistan while a questionnaire is structured for collecting primary data. Our findings suggest that GSP has substantial impact on exports of Pakistan regarding textile because it provide duty free access to EU Countries and gives a competitive edge over other Asian countries. The tariff advantages provided by the GSP Plus status are powerful and must be exploited. This preferential duty regime will enable Pakistan to secure sustainable market access to the EU. The Government and industry also need to invest in higher technology, standards compliance, certification, quality control, packaging and demand driven output. The GSP Plus status will not be there forever; therefore, investment must be made to make this sector more competitive in long term