ISLAMABAD - In view of Brexit’s posing a major threat to Pakistan’s exports, the government has decided to conduct ‘trade diplomacy’ with the members of European Union to strengthen trade relations and increase support in the European Parliament.

Brexit has suddenly created new challenges for Pakistan, as the GSP Plus status being enjoyed by Pakistan currently is mainly due to British presence in the EU.

Sensing the negative impact of Brexit on country’s economy in future, Pakistan has decided to make more friends in EU.

An official of the commerce ministry informed The Nation on Wednesday that the government would work to find new friends in EU to retain the status of GSP Plus after Brexit.

“Similarly, Pakistan would want to negotiate with the UK government a GSP plus like agreement following the country’s exit from the EU after two years. Around 20 percent of Pakistan’s total exports to the EU are due to UK,” he added.

The EU had awarded the GSP Plus Status to Pakistan in December 2013 for the next 10 years, which has already helped the country in adding over $1 billion in its exports per year since January 2014.

GSP Plus Status has allowed almost 20 percent of Pakistan’s exports to enter the EU market at zero tariff and 70 percent at preferential rates. However, exporters are worried whether Pakistan will receive the same benefits once Britain exits the EU.

Feeling the heat of Brexit, Minister for Commerce Khurram Dastgir Khan has directed the Trade Commissioner of Pakistan in Brussels Omer Hameed to enhance diplomatic contacts with his counterparts, especially with the representatives of countries in Northern Europe, which are traditionally in favour of trade liberalisation.

Commercial officers posted in the Embassies of Pakistan in Europe will be issued directions to liaise with respective trade ministries of host countries in order to project Pakistan’s credentials and progress on trade and GSP+ front.

Dastgir said that it was time for Pakistan to win over new friends and revitalize the old friendships in the European Union to safeguard Pakistan’s interests in the EU Parliament and Commission.

The minister said that Pakistan’s exports to the UK under the GSP+ scheme would not be affected immediately in the aftermath of the UK referendum results, and urged the Pakistani exporters to carry on their businesses with the country as usual.

The UK’s withdrawal from the European Union will be governed by Article 50 of EU Lisbon Treaty, which requires a notification from the withdrawing country; in this case the United Kingdom. This notification has not been issued as yet.

After the said notification is issued, Article 50 envisages a minimum of two years before EU treaties and agreements cease to apply to the withdrawing country.

The minister also held meeting with the Ambassador-designate to France Moeenul Haq and urged him to conduct proactive trade diplomacy in France.

He also directed him to prepare for a Design Expo in Paris in spring next year.

Dastgir said that instead of holding a regular trade exhibition, the Ministry of Commerce will showcase the designing prowess of Pakistani entrepreneurs in jewellery, furniture, fashion, handicrafts, sports and textile design in a modern Design Expo, which will have a greater appeal to the artistic taste of French buyers.

Brexit to increase cost of

doing business: FPCCI

Staff Reporter from Karachi: Expressing concern over the likely negative repercussions of United Kingdom’s exit from the European Union for Pakistan’s economy, Senior Vice President of FPCCI Sheikh Khalid Tawab on Wednesday apprehended the dissociation would depreciate both Euro and Pound currencies.

He said that a significant portion of Pakistan’s foreign reserves was in the form of Euro currency, and in the event of materialisation of UK’s referendum result, both the currencies might depreciate; ultimately adversely affecting the monetary parameters in Pakistan.

“The European Union is the major trading partner of Pakistan, and in case the value of Euro and Pound declines, money supply in Pakistan will decrease, which may cause the interest rates to go up and ultimately increase the cost of doing business in Pakistan,” he feared.

He further said that Pakistan’s exports to the EU countries could come down by the appreciation in Pak Rupee against both the currencies as significant appreciation witnessed during last the two days.

He said that presently, Pakistan’s exports to the EU countries included textile products, including clothes, staple fiber, leather products and raw hides and skins, cereals, toys games, sports requisites and optical items.

He further said that Pakistan mainly imported machinery, boilers, electrical & electronic items, iron & steel, pharmaceutical products, mineral, plastic products, chemical products and organic chemical etc from the EU countries.

Revealing interesting facts about the UK referendum, Sheikh said that majority of voters in the urban areas and business centers of the country, including London, Scotland and Ireland, were in the favour of staying in the EU.

“However, other voters voted against remaining in the Union,” he said, and added, “It indicates a clear distinction between the voting patterns exhibited by general public and the business community. This distinction may affect the in/out flow of investment in UK.”