Pakistan Faces Tough Conditions to Retain EU Trade Benefits Beyond 2028

Pakistan's Generalized Scheme of Preferences Plus (GSP+) status, which grants preferential trade access to the country, is set to expire on December 31, 2028. This was confirmed by Bilal Azhar Kayani, Minister of State for Finance, during a recent National Assembly Standing Committee on Finance meeting. Committee Chairman Syed Naveed Qamar highlighted the uncertainty surrounding Pakistan's future trade benefits, emphasizing the need for enhancements to secure its standing under the program.

The textile and clothing sector has been a key beneficiary of the GSP+ scheme, which has been in place since 2014. Under the program, eligible exports can enter the European Union (EU) market at reduced or zero tariffs. However, the EU's updated GSP framework, approved in 2026, necessitates Pakistan to actively apply for GSP+ benefits beyond the current expiration date.

To meet the EU's revised requirements, Pakistan is urged to coordinate efforts between federal and provincial governments. These requirements include commitments to human rights, labor rights, environmental protection, and the rule of law. The Pakistan Textile Council has recently called upon Prime Minister Shehbaz Sharif to lead these coordination efforts.

The significance of maintaining GSP+ status cannot be overstated. In 2024, Pakistan exported €7.5 billion worth of goods that qualified for GSP+ benefits to the EU, while also receiving an estimated €732 million in tariff exemptions.