title:Pakistan EU TRQ Agreement Boosts Bilateral Trade Stability
ISLAMABAD: Pakistan and the European Union have formally signed the TariffRate Quota (TRQ) Apportionment Agreement, a development that ensuresseamless continuity in bilateral trade relations following the UnitedKingdom’s exit from the EU bloc. The agreement, inked in Brussels,addresses the redistribution of tariff rate quotas previously shared withthe UK, providing legal certainty and predictability for exporters andimporters on both sides. This pact comes at a critical juncture whenPakistan’s trade with the EU remains heavily reliant on preferentialaccess, particularly in textiles and agriculture, amid emerging competitivepressures from other regional players.
The signing ceremony took place at the European Commission headquarters,where Deputy Director-General for Agriculture Pierre Bascou represented theEU, while Pakistan’s Ambassador to the European Union, Belgium, andLuxembourg, Rahim Hayat Qureshi, signed on behalf of Islamabad. Officialsdescribed the accord as a milestone that reinforces technical cooperationand deepens economic linkages. It reflects a mutual commitment tomultilateralism and a rules-based global trading system, especiallyimportant as global trade faces uncertainties from geopolitical shifts andprotectionist tendencies elsewhere.
Under the agreement, tariff rate quotas for specific agricultural productsare apportioned between the EU27 and the UK, with Pakistan securing itsallocated share to maintain stable market access. TRQs allow limitedquantities of goods to enter at reduced or zero tariffs beyond which higherduties apply, a mechanism designed to protect domestic producers whilefacilitating imports. For Pakistan, this primarily impacts certainagricultural exports where quotas had been affected by Brexit-relatedreallocations since 2020, though the formal apportionment was delayed untilnow.
Pakistan benefits significantly from the EU’s Generalized Scheme ofPreferences Plus (GSP) status, granted since January 2014, which providesduty-free and quota-free access for over 85 percent of its exports,including most textiles and clothing. In 2024, textiles and clothingconstituted 75.8 percent of EU imports from Pakistan, with around 89percent entering at preferential rates. The TRQ deal complements thisframework by ensuring no disruptions in quota-managed items, supportingoverall export stability valued at billions annually to the 27-member bloc.
The EU-Pakistan bilateral trade is governed by the 2004 CooperationAgreement and further enhanced through the 2012 five-year Engagement Plan,focusing on trade, investment, and sustainable development. The GSParrangement requires Pakistan to adhere to international conventions onhuman rights, labor standards, environmental protection, and goodgovernance, which Islamabad has maintained to retain the privileges. In2024, more than 88 percent of eligible Pakistani exports entered the EUunder reduced tariffs, underscoring the scheme’s effectiveness in boostingtrade volumes.
This TRQ apportionment follows earlier negotiations where Pakistan acceptedthe EU27’s proposed quotas without major changes, as documented inWTO-related processes post-2018. The deal includes clear obligations,reporting mechanisms, and verification arrangements to prevent misuse andensure transparency. It builds on Pakistan’s negotiating rights under GATTArticle 28 for specific products like husked brown rice, while separatetalks continue with the UK on remaining quantities.
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Experts view the agreement as timely amid evolving trade dynamics,including the recent EU-India free trade agreement that grants India phasedtariff reductions and eventual zero duties on key sectors like textiles.Such developments could challenge Pakistan’s competitive edge in the EUmarket, where its GSP advantages have historically provided a margin overnon-preferential suppliers. The TRQ stability helps safeguard existingflows while Pakistan explores diversification and value addition in exports.
Pakistan’s exports to the EU have shown resilience under GSP, withtextiles dominating due to duty-free access for chapters covering appareland made-up articles. The TRQ deal prevents potential quota shortfalls thatcould have arisen from unapportioned post-Brexit volumes, therebysupporting industrial employment and foreign exchange earnings. Governmentofficials emphasized that the pact strengthens the technical foundations oftrade relations and signals continued EU confidence in Pakistan as areliable partner.
The agreement also aligns with broader efforts to enhance bilateral ties,including technical cooperation on sustainable practices and market accessimprovements. As global supply chains adjust to new realities, suchtargeted accords help mitigate risks for developing economies dependent onpreferential schemes. For Pakistani stakeholders, particularly inagriculture and related sectors, the deal provides the predictabilityneeded for long-term planning and investment.
Overall, the TRQ Apportionment Agreement represents a pragmatic step inpost-Brexit trade normalization, ensuring that Pakistan’s access to one ofits largest export markets remains uninterrupted and legally secure. Itreinforces the strategic importance of EU-Pakistan relations in promotingeconomic growth, sustainable development, and adherence to global tradenorms.
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