17 November 2010
Pakistan clothing exports are now recovering, after stagnating for the last two fiscal years. A limited duty-free access could be offered on EU clothing market for a series of products, effective from January 1st. A duty-free access bill could also be submitted to US Congress at the start of next year.
After stagnating in the past fiscal years, Pakistan apparel exports began rebounding in the last months.
In the third quarter of 2010 ( July-September), total clothing exports rose 22% in US$ terms.
Sales of woven apparel were very strong with a jump of 39% in value terms while knit apparel exports only gained 16%.
This is mostly due to sharply rising unit prices of woven clothing (+ 13.7%) while knitwear prices fell 10%.
In September, however, exports of woven apparel decelerated (only up 3.5% in volume terms) while knit clothing exports were remaining very healthy.
Pakistani exporters made strong gains this year on the US apparel market, although from a low market share.
US apparel imports from Pakistan rose more than 20% in dollar terms in second quarter before increasing by 14% in third quarter.
Shipments of cotton knit shirts rebounded in category 338 (men/boys cotton knit shirts) where Pakistan's share of the US import market rose to 8.6% in value terms.
In Europe, Pakistani exporters got mixed results in the first half, although accounting for a slightly larger share of overall EU imports.
The clothing industry is now considering a duty-free access to the European market for a series of products, such as women's denim jeans, against a 9.6% tariff under the GSP.
Effective from January 1st, the duty-free treatment will however be implemented for only two years.
Duty-free imports will also be capped with the preferential treatment being withdrawn when shipments will have increased by more than 20% each year.
The duty waiver still needs to be cleared by the WTO and the European Parliament, in addition.
On the US side, Pakistan is still waiting for a duty-free access for certain apparel made in specific zones bordering Afghanistan, the ROZs.
The bill could be submitted to the new US Congress at the start of next year, last week pledged US Special Envoy for Afghanistan and Pakistan, Richard Holbrooke.