According to a recent report of Transparency International (TI) Pakistan's ranking in corruption at the global level has improved from 42 to 33, which has jolted the government despite the fact that a number of cases of corruption and financial mismanagement are already being heard by the Supreme Court of Pakistan.
The federal government, sources said, has decided to summon a local chapter of the TI (Pakistan) to answer questions of the ministerial panel constituted by the Federal Cabinet in its meeting on December 12, 2012 under the chairmanship of Prime Minister Raja Pervez Ashraf. When contacted, Transparency International Advisor Adil Gilani said the organisation was ready to appear before the panel and present the Corruption Perception Index (CPI) prepared on the basis of the data of the World Bank, Asian Development Bank (ADB) and other financial institutions.
The EU is Pakistan's largest trading partner. In 2011-12 bilateral trade amounted to $9.88 billion, of which exports were $5.36 billion as compared to imports of $4.52 billion. The Commerce Ministry believes that the Government of Pakistan has ratified all 27 international conventions mandatory for inclusion of GSP Plus status, of which seven conventions are related to human rights, eight to labour rights, 8 for environment, three for narcotics control and one related to corruption.
Beneficiary country for GSP plus will have to sign, ratify and implement the specified 27 international conventions in letter and spirit. Pakistan is planning to file the application for the status by February 1, 2013. Replying to a question sources said that Pakistan has to evaluate if the legal obligations under these conventions are being effectively implemented.
According to the quantitative criteria for the beneficiary GSP Plus countries, exports of that country should not exceed 2 per cent of EU's global imports, the seven largest sectors of products contribute more than 75 per cent of its exports to the EU and the country should not be a higher or upper middle income country.
The draft of the new GSP Plus scheme for 2014 onwards has been made public and it includes suitable amendments including upward revision of the import vulnerability threshold from 1percent to 2percent. It also recommends that countries with per capita income of more than $4000 will not be eligible for GSP Plus. As per the statistics available EU'S GSP covered imports from Pakistan are about 1.15 percent of its global GSP covered imports. Hence, by raising the import vulnerability threshold to 2 percent, Pakistan will become eligible for duty-free access in most of its products in the EU through a GSP Plus scheme. At the moment, Pakistan fulfils the proposed criterion in the draft of the new GSP Plus Scheme for 2014 onwards.
The draft of the new GSP plus scheme is with the International Trade Committee (INTA) European Parliament for deliberations. It is expected that the legislation process will be completed by July 2013. After the Lisbon Treaty, the GSP Scheme has to be legislated by the European Parliament in addition to the European Council. However there are concerns which may have impact on the final shape of the scheme: (i) export duties on raw hides and skins; (ii) export duties on molasses; (iii) data protection/data exclusivity with regard to foreign pharmaceutical companies; (iv) drug pricing policy; and (v) marketing approval for pharmaceuticals.
The EU has also expressed reservations on inadequate legislation in Pakistan over data protection, drug pricing policy and marketing approval for European pharmaceutical companies in Pakistan. Previously, the Ministry of Health was dealing with these subjects, however after devolution the proposed Drug Regulatory Authority has still not been established. Now after the promulgation of an Ordinance, this agency has been established under the Cabinet Division.
The textile sensitive countries including France, Italy, Spain, Greece and Portugal may also resist the upward revision of import vulnerability threshold from 1 percent to 2 percent. Furthermore, the EU may require effective implementation of the conventions as a prerequisite for eligibility for GSP Plus.