Published: 03:43 PM, 22 June 2026
Pakistan’s Misuse of GSP+ Benefits Degrades Its Credibility and Worsens the Economy
”Pakistan’s continued misuse of EU GSP+ benefits, despite persistent human rights, labour, governance, and environmental violations, affects its future export trajectory and trade credibility in the international market”
The European Union’s Generalised Scheme of Preferences Plus (GSP+) is a trade incentive that encourages developing countries to uphold international standards in human rights, labour rights, environmental protection, climate action, and good governance. In exchange for implementing internationally recognised conventions, beneficiary countries receive preferential access to the European Union market, with reduced or zero tariffs on a wide range of products.
Pakistan has enjoyed GSP+ status since January 2014, allowing it to export products to the European Union at concessional or zero duty. The arrangement significantly boosted Pakistan’s exports, particularly in textiles and apparel, making the European Union Pakistan’s largest export destination. Despite the scheme’s substantial economic benefits, Pakistan continues to face persistent challenges, including violations of international conventions, weak governance standards, poor implementation of legal reforms, and recurring human rights concerns.
Though Pakistan’s economy remains fragile, it has misused the GSP+ arrangement by extracting substantial economic benefits while failing to fully comply with the very standards that underpin the programme. These developments pose serious risks to Pakistan’s future export trajectory, particularly at a time when the country remains heavily dependent on exports for foreign exchange earnings and macroeconomic stability.
Revised EU GSP+ Framework from 2027
Concerns over Pakistan’s compliance record have intensified following the European Union’s approval of the updated GSP+ regulation on 28 April 2026. Under the revised framework, the number of mandatory international conventions will increase from 27 to 32 beginning January 2027. This means Pakistan will face much stricter compliance scrutiny under the revised GSP+ regime.
The updated framework for 2027–2037 introduces stronger focus areas, including child rights in armed conflict, civil society participation, labour inspection mechanisms, climate obligations, democratic governance, and the protection of vulnerable groups. Newly added conventions include the Convention on the Rights of Persons with Disabilities, labour inspection standards, tripartite consultation mechanisms, and stronger obligations linked to the Paris Climate Agreement.
Pakistan will receive a two-year transition period during 2027–28, but continuation of future trade concessions will depend on a fresh application and a credible reform-oriented action plan. The revised framework signals that the European Union is becoming increasingly concerned about countries that continue to receive preferential trade access despite weak compliance performance. Failure to align with the revised standards may adversely impact Pakistan’s long-term export competitiveness in the European market.
Pakistan: The Largest Beneficiary of GSP+
Pakistan is currently the largest beneficiary among all GSP+ countries. In 2024, total EU imports from Pakistan amounted to €8.3 billion, of which €7.1 billion entered under GSP+ preferences. Nearly 95 per cent of eligible exports utilised preferential tariff concessions, underscoring Pakistan’s overwhelming dependence on the scheme.
The textile and apparel sectors remain the biggest beneficiaries. Apparel alone accounted for nearly 74 per cent of Pakistan’s preferential exports to the European market. Since obtaining GSP+ status in 2014, Pakistan’s textile exports to Europe have expanded sharply, helping the country earn critical foreign exchange amid recurring economic crises, inflationary pressures, debt burdens, and balance-of-payments difficulties. Despite being a GSP+ beneficiary, Pakistan’s competitiveness is decelerating sharply in international markets. According to the IMF, the country’s exports are projected to grow by 2.3% in 2026.
Despite massive economic gains from GSP+, Pakistan has failed to demonstrate proportional progress in democratic governance, labour reforms, minority protection, judicial transparency, and the implementation of human rights. These governance shortcomings create uncertainty for international buyers and investors and may negatively affect Pakistan’s future export growth potential.
Pakistan’s Export Growth Trajectory
Year Growth of Exports of Goods and Services
2020 -2.7
2021 3.5
2022 5.9
2023 -7.8
2024 13.9
2025 15.8
2026 2.3
Source: IMF, WEO
GSP+ Obligations Ignored Despite Formal Commitments
European Union monitoring reports have repeatedly highlighted serious concerns about enforced disappearances, torture prevention, minority rights, labour rights, child labour, corruption, democratic freedoms, and rule-of-law deficiencies. Increasingly, the issue is being viewed as a misuse of the GSP+ framework itself, in which economic privileges are enjoyed without meaningful compliance with the programme’s underlying obligations. Such developments weaken Pakistan’s credibility in global trade negotiations and create long-term risks to export sustainability.
Pakistan continues to face serious human rights and governance concerns that raise questions about its compliance with international obligations under the GSP+ framework. One of the most critical issues remains enforced disappearances, with over 10,500 cases reported to Pakistan’s Commission of Inquiry by mid-2025, many of which remain unresolved. The continued misuse of blasphemy laws, violence against minorities, forced conversions, and mob attacks have further damaged Pakistan’s global image.
Economic Benefits Without Structural Reforms
Pakistan appears to have used GSP+ primarily as an economic instrument rather than a reform-oriented mechanism. Despite more than a decade of preferential market access, Pakistan continues to struggle with corruption, political instability, institutional weaknesses, democratic deficits, labour exploitation, and human rights concerns. GSP+ benefits have disproportionately favoured export-oriented industries while ordinary citizens have not experienced corresponding improvements in governance standards or institutional accountability.
The heavy concentration of exports in low-value textile products also reflects limited industrial diversification, despite years of preferential access. This lack of diversification, combined with rising compliance risks, poses serious challenges for Pakistan’s export trajectory and long-term economic scenario
Credibility Challenge for the European Union
Pakistan’s compliance failures also create a broader credibility challenge for the European Union itself. If countries continue receiving preferential trade benefits despite repeated violations of international obligations, the integrity and effectiveness of the GSP+ framework may weaken significantly.
European lawmakers and civil society organisations are increasingly demanding stricter monitoring and stronger enforcement mechanisms to ensure that trade preferences are genuinely linked to measurable reforms rather than symbolic commitments.
Conclusion
Pakistan has followed an economic trajectory marked by misuse of the European Union’s GSP+ arrangement since 2014. Persistent violations, including enforced disappearances, misuse of blasphemy laws, military court trials, minority persecution, labour exploitation, child labour, weak democratic governance, and environmental shortcomings, indicate that Pakistan has failed to fully comply with the obligations attached to the GSP+ framework.
The revised GSP+ framework, effective from 2027, will subject Pakistan to stricter scrutiny and additional compliance obligations. Going forward, it may become increasingly difficult for Pakistan to continue enjoying preferential trade concessions without demonstrating credible, measurable, and enforceable reforms in human rights, governance, labour protections, and democratic accountability. If these concerns remain unresolved, they could pose major impediments to Pakistan’s future export trajectory, global trade credibility, and long-term economic stability. (by, PAUL ANTONOPOULOS)
>> Source: Greek City Times
