Pakistan has several trading partners, some of the large ones being the European Union (EU), the United States of America (USA), China and the United Kingdom.
Source: UN Comtrade
Pakistan Textile Exports to EU (SBP data)
2022 (till Oct)
*in thousand USD
** HS code 50-63
Pakistan enjoys preferntial access to the European market since January 2014, under the GSP+ arrangement (mostly zero duties on two thirds of all product categories). More than 76% of Pakistan’s exports, including textiles and clothing, enter the EU duty and quota free. This represents almost 20% of Pakistan’s exports globally.
To maintain the GSP+ status, Pakistan has to comply with 27 core international conventions on human and labor rights, environmetal protection and good governance. Pakistan has ratified all 27 conventions.
Apart from Pakistan, the EU currently unilaterally grants GSP+ tariff concessions to Bolivia, Cabo Verde, Kyrgyzstan, Mongolia, the Philippines, Sri Lanka and Uzbekistan.
The current GSP framework is coming to an end in December 2023. Legislative process on its successor for 2024-2033 is ongoing. Currently, trialogues between the three EU institutions- the EU Commission, EU Council and EU Parliament are underway.
The EU carries out the review every two years to ensure the commitment of the beneficiary countries to effectively implement the UN conventions. So far, Pakistan has successfully completed three (3) biennial reviews of the GSP regime since its status upgrade to GSP+ in 2014. The results of the fourth review are yet to be released. The reports for the previous biennial reviews are linked below:
Pakistan Report 2014-2015
GSP+ has increased EU-Pakistan bilateral trade; valued at 12.2 Bn in 2021, up nearly 80% in just 8 year. Compound Annual Growth Rate (CAGR) for Pakistan’s exports to EU increased to 7% in the post GSP+ period (vs. 4% in the 5 years preceding GSP+), as a result of improved market access. Interestingly, Pakistan’s imports from EU also rose from a stagnant 0% in the 5 years preceding GSP+ to a CAGR of 7% post GSP+.
EU GSP+ is a crucial element of EU-Pakistan cooperation for sustainable development and for mutual benefit. GSP+ has had and will continue to have a positive influence on shared EU-Pakistan objectives on good governance and inclusive and sustainable growth.
Pakistan’s textile and apparel sector is a core foundation of the EU-Pakistan GSP+ success story and its broader governance impact. Progressive sector leaders are stepping up to drive broader change for good.