EU’s largesse and our exports


Pakistan has been a major beneficiary of the European Union’s preferential trading programme for vulnerable developing nations, known as the Generalised System of Preferences Plus (GSP plus). The scheme grants Pakistani manufacturers tariff-free access to Europe in exchange for implementing reforms on human rights, working conditions, climate change and good governance.

Policymakers in Brussels review the GSP plus programme’s progress every two years. Failure to present considerable progress on the preset goals by the EU can lead to the suspension of the special trade regime. In this case, luck has been on Pakistan’s side. Despite our uneven report card, we bagged a clean bill of health from the Commission, enabling exporters across the country to enjoy tariff-free access to Europe’s market for the next two years.

As a result of the duty-free access and its subsequent extension in the regime, our export growth witnessed an increase of 13 per cent. This unique trading opportunity has been crucial for the health of our exports and products to maintain their competitiveness in the EU market vis-à-vis similar products originating from India, Turkey, Vietnam and China. Not only that, this preferential trade treatment coupled with the bump in exports has catapulted the EU as Pakistan’s largest trade partner. It is important to note that a significant portion of all European imports from the GSP Plus programme come from Pakistan and an overwhelming size of these purchases are textiles and clothing.

But Islamabad has not yet fully exploited the benefits of the special EU trade regime and there is still potential for ramping exports in the textile sector. Therefore, the government must introduce policies and incentives that encourage investment in the sector. This will enable manufacturers across the country to enhance the product lines of exports and reap the maximum benefits of the EU’s largesse.


Published in The Express Tribune, April 2nd, 2018.

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