ISLAMABAD: The European Union (EU) is expected to extend Pakistan’s GSP (Generalized System of Preferences) for another four years, until 2027, as the European Council has approved the recommendations of the European Commission (EC), according to informed sources from Business Recorder.
Brussels-based EU Parliament and European Council had serious differences regarding a proposed ten-year GSP scheme, but a new Parliament will be elected in June next year.
Sources say that the proposal to extend the existing GSP for four years is now in the hands of the European Parliament’s Committee on International Trade (INTA), which will vote on the proposed extension.
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At its next meeting scheduled for September 18-19, 2023, the International Trade Committee (INTA) will consider the draft recommendation for consent on the conclusion of the FTA between the EU and New Zealand, along with the accompanying draft resolution. Members will then vote on the extension of the current GSP scheme.
“Islamabad believes that the proposal should pass through INTA without any objections from the members so far,” said an anonymous official. However, Pakistan will have to go through the EU Reviews process, which takes place every two years. Two more Reviews will be added. The report on the current EU Review is yet to be unveiled.
The federal government has a strong perception that things are technically on the right track, but incidents like the one in Jaranwala, where violent mobs attacked churches and homes of Christian residents, are worrisome. Such incidents create problems at international forums.
Issues of human rights violations, child labor, etc., are expected to be included in the EU Review Report.
Both the EU Parliament and European Council have strong opposing arguments, which have hindered progress, added the sources.
The European Council defines the EU’s overall political direction and priorities by adopting conclusions. It does not negotiate or adopt EU laws.
Pakistan has engaged in extensive lobbying for the new scheme and made efforts to comply with the 27 Conventions.
Pakistan is a major beneficiary of the trading opportunities offered by the EU GSP. Since January 1, 2014, Pakistan has enjoyed generous tariff preferences (mostly zero duties on two-thirds of all product categories) under the GSP+ arrangement, aimed at supporting sustainable development and good governance. To maintain GSP+, Pakistan must ratify and effectively implement 27 core international conventions on human and labor rights, environmental protection, and good governance.
Bilateral trade between the EU and Pakistan amounted to $14.857 billion in 2022, with Pakistan’s exports reaching $9.865 billion compared to $6.639 billion in 2021, while imports were valued at $5.392 billion, compared to $5.544 billion.
Pakistan’s main exports to the EU include textile articles, sets, worn clothing, articles of apparel, knits or crocheted, cotton, beverages, spirits and vinegar, cereals, articles of leather, animal gut, harness, travel goods, manmade staple fibers, toys, games, sports requisites, etc.
The EU continuously monitors the effective implementation of the 27 international conventions on human rights, labor rights, environmental and climate protection, and good governance by GSP+ beneficiary countries. This monitoring includes information exchanges, dialogue, and visits involving various stakeholders, including civil society.
The Commission publishes a report on the implementation of GSP every two years, providing information on the progress made by GSP+ beneficiary countries in implementing the 27 international conventions.
Copyright Business Recorder, 2023
