Pakistan leads EU GSP+ trade gains but faces reform challenges

Pakistan has emerged as the top beneficiary of the European Union’s GSP+ trade scheme, recording €7.1 billion in exports to the EU in 2024 under preferential tariffs, according to the 5th GSP Report released on Thursday, which evaluates the implementation of 27 international core conventions in beneficiary countries.

The report adds that Pakistan also achieved an impressive utilisation rate of over 95%, highlighting its effective use of the trade advantages offered under the programme.

The GSP+ arrangement, which grants developing countries reduced or zero tariffs in exchange for progress on human rights, labour standards, environmental protection and good governance, has played a significant role in boosting Pakistan’s export sector. The country outperformed other GSP+ members, with the Philippines and Sri Lanka trailing behind in export value.

The report acknowledges several areas where Pakistan has made tangible progress. Legislative steps include reducing the scope of the death penalty and implementing rules under the Anti-Torture Act. Regional governments have also enacted Child Marriage Restraint laws, signalling movement toward stronger protections for vulnerable groups.

On labour rights, Pakistan ratified the International Labour Organisation’s protocol on forced labour and launched initiatives aimed at transitioning workers from the informal to the formal economy — an important step toward improving working conditions and compliance with international standards.

Efforts to combat corruption have also been noted, with updated policy measures introduced during the reporting period.
Despite these gains, the EU report underscores a range of ongoing challenges. Concerns remain over judicial independence, limited accountability for human rights violations, and restrictions on freedom of expression and media.

Reports of torture and gaps in enforcement of existing protections continue to raise alarms.

Labour rights enforcement also remains uneven. Child labour and forced labour persist, particularly in agriculture and informal sectors, while labour inspectorates face capacity constraints.

Environmental governance presents another area of concern, with limited institutional capacity slowing progress on climate commitments and environmental protections.

Pakistan’s reform efforts have been further complicated by natural disasters during the reporting period, which have strained administrative capacity and exacerbated existing socio-economic vulnerabilities.

The EU continues to support Pakistan through targeted initiatives, including the “Trade for Decent Work” programme and broader Aid for Trade funding aimed at strengthening infrastructure, compliance, and competitiveness.

While Pakistan’s strong export performance under GSP+ underscores the economic benefits of the scheme, the report makes clear that sustained progress on governance, human rights, and labour standards will be critical to maintaining these advantages in the future.

As the EU prepares to roll out an updated GSP framework in 2027, Pakistan will need to reapply for GSP+ status — making continued reforms not just desirable, but essential.