Pakistan’s textile exports to European Union (EU) faced a record number of objections and are still under the opposition despite unanimously approval by General Council of the World Trade Organisation (WTO) to provide trade concessions to Pakistan on 75 products.

Pakistan’s entry was objected by Bangladesh, Brazil, Argentina, Indonesia, Vietnam, India and Peru, and after rectifying the apprehensions of these countries the objections were dropped and entry was granted, said member Pakistan Yarn Merchants Association (PYMA), Ghulam Rabbani on Saturday.

Now Germany, Spain and Portugal have opposed Pakistan’s access to EU countries on Generalised System of Preference (GSP) facility, which was becoming reality after the approval of WTO.

“It is the third time that these three countries have put obstacles in the way of Pakistan in recent European Parliament meeting on back of recessionary fears in Europe,” Rabbani added.

He said textile made ups and garment exporters are afraid of a further cut or scraping of EU package for Pakistani textiles because of this recent opposition.

He said trade concessions package would be now redrafted on objections and if this package fails or not implemented, it would have severe detrimental effect on Pakistan’s bid for GSP plus, which is going to start from January 1, 2014.

“This package has been politicised during the recent EU Parliament meeting and it seems a compromised package is being redrafted under which the number of items under quota has been increased from 20 to 26 with a quota ceiling of 120 percent of past trade based on 2007-09.”

It is expected the package will now be implemented from second half of 2012 till the end of 2013, which will further retard efforts to boost exports, he added.

With cotton prices already falling close to its one year low and no major uptick in volumes, the fibre experts believe Pakistan’s textile sector exports in fiscal year (FY) 2012 will decline by 4 percent to $12.6 billion.

An analyst said the recently approved 75 lines of textile and leather products package for Pakistan by WTO is still to be enacted by the 27-state European Parliament. A long-awaited decision regarding the exports of the Pakistani textile products to the EU is now going to be tabled in the EU parliament in few days for final approval.

It is hoped the impact of this development would start surfacing from fourth quarter of fiscal year 2012, he added.

Pakistan would be able to export 75 items including textile, leather and ethanol. Within the span of two years, Pakistan is expected to benefit 900 million euros worth of exports.

However, the main items of the textiles sector bedware, readymade garments and cotton fabrics, which hold 38 percent, 20 percent and 12 percent respective share in textile exports to the EU are not included in the concession package. After the concession from the EU, the sub-textile sectors of dishcloth, duster, knitted tracksuits-making units, weaving industry, towel, gloves and socks-making units will benefit. The exports of previous year, which were $14 billion, will also not be achieved and the year may end up with meagre $12 billion exports.

He asked the Ministry of Commerce to rush for resolving the situation and try to develop consensus to appease Council for Trade in Goods (CTG) of the WTO to provide unilateral market access to Pakistan at zero duty.

Twenty products of the package are subject to tariff rate quotas (TRQs) and will be eligible for import into EU duty free up to a specified quantitative limit. The TRQs are worked out by taking an average of Pakistan’s exports into EU during 2008, 2009 and 2010 plus 20 percent.

“Out of the 75 exportable products, eight have been objected which comprise 90 percent of the total exports of Pakistan, mainly of textile and cotton-made products,” he said.

Members of the Federation of Pakistan Chambers of Commerce and Industry, Karachi Chamber of Commerce and Industry, Karachi Cotton Association, All Pakistan Textile Mills Association and Pakistan Yarn Merchants Association expressed pleasure over this development.

According to the WTO regulation, CTG meeting has to approve any proposal for waiver under the most favoured nation criteria. If a single member country opposes at the CTG meeting, the decision cannot be made, he added.

Exports from Pakistan are currently worth around 3.5 billion euros each year, 921 million euros of which comes from these 75 lines.