BRUSSELS: Pakistan faces a significant challenge in securing an extension of the Generalized Scheme of Preferences Plus (GSP+) status from the European Union (EU), which is set to expire by the end of this year.
Despite a severe financial crisis and struggling to increase exports, there is some positive news as the EU is contemplating introducing legislation to continue the scheme. However, there is a difference of opinion between the European Council and the European Parliament on linking the GSP+ status with migration and other issues.
European Parliament Member Heidi Hautala emphasized that they firmly believe that trade should not be linked to migration. The disagreement between the two bodies has presented a temporary solution that suggests extending the current scheme for four years instead of the usual ten. Pakistan has been enjoying GSP+ status since January 2014.
Pakistan’s Exports to EU After Receiving GSP+ Status
While the decision ultimately rests with the EU Parliament, the duration of the extension may be reduced. Pakistan must also address long-term concerns regarding human rights, labor rights, good governance, and environmental protection. The EU demands that all beneficiary countries, including Pakistan, implement 27 international conventions.
Pakistan’s exports, primarily textiles, to the EU have witnessed a significant increase since receiving GSP+ status. Trade between the two sides rose from 6.9 billion euros in 2013 to 12.2 billion euros in 2021, making Pakistan the largest beneficiary among all GSP+ countries. The outcome of the GSP+ status extension will have a substantial impact on Pakistan’s future trade prospects with the EU.
