Key Takeaways
- The European Union has warned Pakistan it may lose preferential trade status.
- Pakistan’s exports to the EU have increased by over 91% since receiving GSP+ status.
- Improvements in human rights and governance remain largely legislative.
The European Union (EU) has issued a stark warning to Pakistan, stating that the country could lose significant trade benefits worth €732 million if it fails to meet its commitments under the Generalised Scheme of Preferences Plus (GSP+).
According to the EU’s fifth monitoring report on GSP+, Pakistan has experienced limited positive change during the 2023-2025 period, while regressing in several key areas. The report highlights that Pakistan exported EUR 7.5 billion worth of goods eligible for GSP+ to the EU in 2024, mainly textiles and clothing, benefiting from an estimated EUR 732 million in tariff exemptions.
Since joining the scheme in 2014, Pakistan has been the largest beneficiary, with exports to the EU increasing by more than 91% since receiving GSP+ status. Exporters have utilized over 95% of the available trade preferences during this period.
While the report acknowledges progress in areas such as legislation for a National Commission for Minorities and maintaining a de facto moratorium on executions, it also points out that most improvements remain legislative or administrative and have not yet translated into meaningful changes on the ground. The EU is particularly concerned about increasing enforced disappearances, alleged extrajudicial killings, restrictions on freedom of expression, and declining judicial independence.
The report further emphasizes the need for Pakistan to strengthen accountability for human rights violations, improve prison and capital punishment reforms, protect freedom of expression, eliminate child labor and child marriage, enforce laws against forced labor, safeguard minority rights, and enhance the independence of anti-corruption institutions. These measures are crucial for maintaining GSP+ eligibility under the revised framework that will take effect in 2027.
Pakistan’s political and economic challenges, including security concerns, climate-related disasters, and governance issues, have also affected its ability to fully implement international commitments. The country is still recovering from an economic crisis in 2023 and continues to face significant poverty levels. Major floods in recent years have further impacted implementation capacity.
The EU remains Pakistan’s largest export market, accounting for around 28% of the country’s total exports, with textiles and clothing making up roughly three-quarters of shipments to the bloc. Approximately 90% of Pakistan’s exports to the EU qualified for GSP+ preferences during the 2022-2024 period.
