EU likely to extend Pakistan’s GSP status amid growing trade relations

The GSP+ arrangement is designed to promote sustainable development and good governance in beneficiary countries


The European Union (EU) is currently deliberating the extension of Pakistan’s Generalized System of Preferences (GSP) status for an additional four years, until 2027. The decision to extend these trade privileges, which grant Pakistan preferential access to EU markets, follows the endorsement of recommendations by the European Council and is currently under consideration by the European Parliament’s Committee on International Trade (INTA).

At its upcoming meeting scheduled for September 18-19, 2023, INTA will discuss the proposed extension of the GSP scheme. The committee’s members are also expected to vote on the matter. According to informed sources, Pakistan remains cautiously optimistic about the outcome, as no objections have been raised within the committee so far.

While the proposal may appear to be straightforward, Pakistan’s continuation under the GSP+ arrangement is subject to periodic reviews conducted by the EU, which take place every two years. Presently, the findings of the most recent review remain undisclosed, adding an element of uncertainty to Pakistan’s hopes for an extension.

Pakistan has vigorously lobbied for the continuation of the GSP scheme and has taken substantial steps to align with the EU’s requirements, which include ratifying and effectively implementing 27 core international conventions focusing on human and labor rights, environmental protection, and good governance. 

The GSP+ arrangement, which offers generous tariff preferences, predominantly comprising zero duties on approximately two-thirds of product categories, is designed to promote sustainable development and good governance in beneficiary countries.

Trade relations between the EU and Pakistan have experienced growth in recent years. In 2022, bilateral trade between the two stood at $14.857 billion, with Pakistan’s exports totaling $9.865 billion, a significant increase from $6.639 billion in the previous year. EU imports from Pakistan, on the other hand, amounted to $5.392 billion in 2022, a marginal decrease compared to $5.544 billion in 2021.

It is notable that Pakistan’s key exports to the EU include textile articles, clothing, cotton, beverages, cereals, leather goods, and various other products.

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