ISLAMABAD: Deputy Prime Minister and Foreign Minister Ishaq Dar on Fridayreaffirmed the critical importance of the European Union’s GeneralisedScheme of Preferences Plus (GSP) as a cornerstone for mutually beneficialtrade relations between Pakistan and the EU. Chairing a high-levelinter-ministerial meeting, Dar emphasized the need to fully harness thispreferential scheme to drive Pakistan’s economic expansion and deepenbilateral economic engagement, especially as global trade dynamics evolve.
The EU’s GSP scheme grants developing countries zero-duty access toEuropean markets on more than two-thirds of tariff lines, covering a widerange of products, in exchange for ratifying and implementing 27international conventions on human rights, labour standards, environmentalprotection, and good governance. This arrangement incentivizes sustainabledevelopment while providing substantial trade advantages to eligiblenations.
Pakistan has benefited from GSP status since January 2014, making it oneof the largest recipients among the current eight beneficiary countries,which include Bolivia, Cape Verde, Kyrgyzstan, Mongolia, Philippines, SriLanka, and Uzbekistan. The scheme’s extension until 2027 ensures continuedpreferential access, though beneficiaries must reapply during a transitionperiod starting in 2027.
Data from the European Commission and related monitoring reports indicatethat total EU imports from Pakistan reached €8.3 billion in 2024, with €7.1billion utilizing GSP preferences. This represents a preferenceutilization rate of approximately 86 per cent, among the highest recordedfor GSP countries, underscoring Pakistan’s effective exploitation of thescheme.
The significant boost in exports is particularly evident in the textile andapparel sector, which constitutes the bulk of Pakistan’s shipments to theEU. Since the grant of GSP in 2014, Pakistani textile exports to Europehave more than doubled in value, with reports citing increases of over 108per cent in certain periods due to the removal of duties that previouslyranged up to 12 per cent on competing products.
In 2024, the EU accounted for about 24 per cent of Pakistan’s totalexports, making it the single largest export destination. Bilateral tradevolume stood at around €11 billion, highlighting the EU’s role asPakistan’s second-most important trading partner after China. Over 85 percent of Pakistan’s eligible exports, including textiles and clothing, enterthe EU duty-free and quota-free under GSP.
The inter-ministerial meeting convened by Dar included key figures such asthe Commerce Minister, Special Assistant to the Prime Minister Tariq Bajwa,Foreign Affairs Secretary Amna Baloch, and senior officials from relevantfederal and provincial departments. Discussions focused on strategies toenhance trade cooperation, identify emerging opportunities, and addresschallenges in maximizing GSP advantages.
Dar’s emphasis comes at a time when Pakistan faces potential competitivepressures, including recent developments in EU trade relations with otherregional players. Industry stakeholders have expressed concerns thatevolving agreements could narrow Pakistan’s tariff edge in key sectors liketextiles, prompting proactive measures to safeguard and expand market share.
Pakistan’s consistent high utilization rate of GSP preferences, oftenexceeding 90 per cent in previous years, demonstrates strong compliancewith the scheme’s requirements. Preference-eligible imports have grownsteadily from €3.8 billion in 2013 to €7.5 billion in 2024, reflectingimproved export capacity and alignment with EU sustainability standards.
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The government remains committed to upholding the 27 conventions, asevidenced by ongoing monitoring missions and dialogues with the EU. Recentstatements from Pakistani leadership, including Prime Minister ShehbazSharif, have reiterated dedication to close collaboration on tradeinitiatives through GSP, ensuring sustainable economic gains.
By prioritizing GSP, Pakistan aims not only to sustain current exportlevels but also to diversify its export basket beyond traditional sectors.Enhanced engagement could open avenues in value-added products,agriculture, and other areas, contributing to broader economic resilience.
The meeting’s outcomes signal a strategic push to strengthen institutionalcoordination among ministries and provinces. This collaborative approach isessential for addressing compliance issues, improving product standards,and exploring new economic partnerships with the EU.
Overall, GSP continues to serve as a vital lifeline for Pakistan’sexport-driven growth strategy. With the scheme’s benefits firmly in placeuntil 2027, focused efforts to maximize its potential remain central toadvancing national economic objectives in a competitive global landscape.
Source: https://gsphub.eu/country-info/Pakistan
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