Islamabad, 13 May 2024 (TDI): In the first nine months of this ongoing fiscal year, Pakistan has witnessed a decline of 6.27 percent in exports to Europe. Despite GSP+ status to Pakistan which allows goods to enter duty-free in Europe, exports to the European Union have begun to decrease.
It may be noted that in October 2023, the European Parliament unanimously voted to grant Pakistan GSP+ status for another four years to allow Pakistan to maximize the exports of local production to the European markets.
GSP+ status would also help Pakistan boost its trade ties with the European countries and overcome its economic meltdown. Pakistan has been struggling to stabilize its economy since the COVID-19 pandemic, but poor governance and lingering political instability have added a negative impact.
According to the figures compiled by the State Bank of Pakistan (SBP), this decline in exports to Europe is mainly due to the lesser demand for Pakistani goods in the western, southern as well as northern European markets.
Currently, exports to Europe are worth USD 8.188 billion and countries in Western Europe including Germany, Netherlands, France, Italy, and Belgium account for the largest portion of Pakistan’s exports to Europe. However, exports to these countries have decreased by 12 percent in the current fiscal year.
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In essence, GSP+ status is the special incentive provided by the European Union to developing and vulnerable countries. It aims to promote sustainable development and good governance which could support countries in to fight against issues defined in the UN’s SDGs.
The prerequisite to acquiring the GSP+ status is the ratification of 27 international conventions on human rights, labour rights, environmental protection and climate change, and good governance. GSP+ countries can benefit from complete duty suspensions for products across approximately 66% of all EU tariff lines, including sensitive products.
