The European Union (EU) has become Pakistan’s second largest trade partner as 28% of the country’s total imports landed into EU markets in 2020. The county’s growth of imports to the EU, attributed to GSP+ status, have almost doubled from EUR 3,072 million in 2010 to EUR 5,537 million in 2020.
According to the EU’s mid-term evaluation report, GSP scheme remained effective in terms of fostering development and improved compliance with labour and human rights standards in developing countries. For instance, Armenia and Sri Lanka were classified as upper middle income countries respectively in 2018 and 2019, and graduated from GSP+ status to Free Trade Agreement (FTA) with the EU. However, Pakistan’s GDP growth rate has steeply declined to 0.53% in 2020 from 5.84% in 2018 due to, inter alia, weak macroeconomic policies. Hence the country is likely to negotiate for continuation of GSP+ facility after expiry of the existing GSP regulations in December 2023.
The EU has now modernised regulations for beneficiary countries to continue or improve transition from EBA to GSP+ status, with increased burden of compliance obligations by adding six more treaties into the list of 27 conventions and improvement in compliance monitoring through increased civil society involvement. Hence, Pakistan’s compliance with GSP+ obligations would be a challenge given that the EU has already showed concerns on violation of civic freedoms and rights of vulnerable sections of society.
To qualify for the GSP+ status, Pakistan has ratified numerous international treaties including conventions related to civil and political rights, child rights, protection against torture and rights of persons with disabilities in 2010, 11 & 14. The country has also shown progress on GSP+ compliance obligations. Key developments in this regards include, inter alia, establishment of the National Commission for Human Rights (NCHR) in 2015, formulation of the National Plan of Action for Human Rights in 2016 and setting up of systems to domesticate treaties at federal and provincial levels.
After a period of complacency due to political instability and advent of the Covid-19, Pakistan’s government has revitalised its efforts to show progress on GSP+ compliance obligations particularly after the EU parliament’s resolution against Pakistan in 2021. As a result, for example, Pakistan has introduced National Action Plan on Business and Human Rights in September 2021 as well as achieved appointments of chairperson and members of the NCHR in November 2021 given that these appointments were overdue since July 2019.
However, despite these developments, overall situation of human rights in Pakistan has not shown any improvement. On implementation status of the conventions, the EU's report in 2018 noted that despite adoption of new laws, strategies and action plans, implementation remained the issue of concern. It points to the lack of political will, weaker institutional capacities and insufficient allocation of resources.
Pakistan’s efforts to back-in-track on GSP+ compliance obligations and visit of the European Parliament’s delegation to Pakistan in November 2021 shows that reinvigoration of relations is essential both for the EU and Pakistan to achieve strategic objectives of both trade and development partners.
Pakistan can use the EU’s GSP+ status to strengthen its vulnerable economy, hence government’s engagement with EU authorities is essential to negotiate continuation of GSP+ status and beyond. Engagement of Pakistan’s political leadership with the EU’s democratic structures could be a way forward to advancing democratic culture of political decision-making and achieve respect for human rights, peace and sustainable development. Business community’s engagement with their EU counterparts can help us acquire technical knowledge to diversify and standardise Pakistan’s export products.
GSP+ scheme was, is and will be an avenue for Pakistan’s National Human Rights Institutions (NHRIs), civil society, trade unions and other social partners to engage with their respective counterparts in the EU, share experiences, seek support, promote solidarity and work together to achieve benefits for poorest segments of society which is one of the key objectives of the GSP scheme.
The European Union's Generalised Scheme of Preferences (GSP) is a trade incentive scheme which reduces or suspends import duties on the products coming into the EU markets from developing countries. It helps these countries in alleviating poverty through creating jobs as well as strengthening systems in compliance with international standards to protect labour and human rights. Pakistan is one of the beneficiary countries.
By Muhammad Rafique
Read document here: https://afpak.boell.org/en/2023/06/05/gsp-plus-status-opportunity-pakistan-engage-europe
