Pakistan faces new EU trade test as GSP+ rules change from 2027

Pakistan faces a fresh test over preferential access to one of its biggest export markets as the European Union introduces a new GSP+ framework from January 2027, with tougher requirements on implementation, monitoring and reporting.

The current Generalised Scheme of Preferences Plus (GSP+) framework expires on 31 December 2026. Pakistan and other existing beneficiaries will keep their preferences until the end of December 2028 under transitional arrangements.

From January 2029, however, continued preferential access will depend on a fresh application under the new system.

Why GSP+ is crucial for Pakistan

Pakistan has benefited from GSP+ since 2014 and remains the largest beneficiary of the arrangement. The scheme offerstariff preferences to developing countries in return for commitments under international conventions covering human rights, labour rights, environmental protection and good governance.

The scale of the trade at stake is significant. EU imports from Pakistan were worth about $9 billion in 2024. Of that, approximately $8.1 billion in goods were eligible for GSP+ preferences, with exporters using the facility for goods worth around $7.7 billion. The EU estimated that the scheme saved Pakistan about $790 million in tariffs.

The EU accounted for about 28 per cent of Pakistan’s total exports, while textiles and clothing represented around 70 to 76 per cent of Pakistani exports to the bloc.

EU assessment raises concerns

The European Commission’s assessment for 2023 to 2025 identified compliance problems and regression in several areas, although it also noted legislative and administrative progress.

Concerns included enforced disappearances, extrajudicial killings, freedom of expression, journalists’ and minority rights, judicial independence, access to justice and forced labour.

At the same time, the assessment highlighted progress in several areas, including measures relating to minorities, implementation of the Anti Torture Act, a Domestic Violence Bill for Islamabad and the country’s first marital rape conviction.

EU Ambassador to Pakistan Raimundas Karoblis said the focus would be on Pakistan’s implementation of the international conventions and its efforts to address the areas identified in the assessment.

Despite the concerns, Brussels has not determined that Pakistan’s current GSP+ preferences should be partially or fully withdrawn.

Islamabad challenges EU assessment

Islamabad has pushed back against the European Commission’s findings, expressing disappointment and arguing that the assessment’s overall narrative does not provide a sufficiently balanced picture of Pakistan’s performance.

Pakistan has pointed to the report’s recognition of legislative progress and continued compliance with the 27 conventions under the current GSP+ framework.

It has also pledged to remain engaged with the EU and committed to implementing the international conventions underpinning the scheme.

New framework raises the bar

Under the new GSP+ framework, participating countries will be required to comply with 32 international conventions, up from 27 under the current system, alongside new implementation and monitoring requirements.

Applicants will also have to submit an action plan detailing the measures they intend to take, along with timelines and performance indicators.

Pakistan has already ratified the five additional conventions required under the new framework. Its current trade preferences are due to remain in place until the end of December 2028, with the EU expected to decide on new GSP+ applications in the first half of 2029.

For Pakistan, the next phase will therefore be about more than signing up to international commitments. Islamabad will have to demonstrate how those commitments are being implemented as it seeks to preserve preferential access to a European market that accounts for more than a quarter of its exports.

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