Pak-Sweden BIT talks in Nov

Govt keen to review 45-year-old pact due to international arbitration concerns

ISLAMABAD:

Ambassador Alexandra Berg von Linde has said that Sweden is looking forward to renegotiating the Bilateral Investment Treaty and a Pakistani official said that both sides would hold the first round in November to rewrite the 45-year-old pact due to Islamabad's concerns over international arbitration.

The Swedish ambassador emphasised the need for continued efforts to honour Pakistan's international commitments under the duty-free access scheme of Europe, known as the Generalised System of Preferences Plus (GSP+). She was speaking during the launching ceremony of the Sweden-Pakistan Business Guide 2026-28.

"Sweden is very much looking forward to restarting negotiations over updating the Bilateral Investment Treaty," remarked Linde.

Her remarks came after Pakistan sent a notice to terminate the 1981 treaty as part of its strategy to renegotiate all the existing investment treaties. Islamabad was keen to review the investment treaties to avoid huge fiscal exposures due to international arbitration.

The government has appointed an investment ombudsman for dispute resolution and has also approved a template for the treaty, which it wants to apply with all partner countries.

A government official said that the first round of talks between Pakistan and Sweden was scheduled for November 17-18 in Islamabad. The government has also been negotiating its investment treaty with Hungary, hoping for an early agreement with these two nations.

The Swedish ambassador also spoke about the GSP Plus scheme. "Continued efforts need to be made to advance international commitments under the GSP Plus," she said.

She was the second European ambassador in the past less than three weeks having echoed such comments, which were earlier made by the Netherlands ambassador.

EU Ambassador Raimundas Karoblis also said on Friday in Lahore that Pakistan would have to show progress on implementation and formulation of various laws and conventions necessary for availing itself of the next GSP Plus status.

Karoblis urged exporters to take immediate measures for implementation of the requisite conventions and to engage with the government with reference to concerns of the European Commission, especially those relating to human and labour rights, governance and environmental issues, to facilitate the path for future extension of the GSP Plus for the next 10 years.

Federal Commerce Secretary Jawad Paul said that the government had successfully completed its fifth review under the EU's GSP Plus status. He stated this while speaking as chief guest at the launch of the Sweden-Pakistan Business Guide 2026-2028.

He added that preparations were already underway for formal re-application. Paul expressed confidence that compliance with international obligations would enable Pakistan to transition smoothly into the new EU regulatory framework.

According to the GSP+ monitoring report that the EU released recently, the club of 27 nations asked Pakistan that "to ensure further GSP+ eligibility and compliance with international commitments", it had to reverse negative developments that took place from 2023 to 2025.

"Grave concerns remain as significant systemic challenges persisted in the implementation of human rights conventions, with a deterioration of the situation relating in particular to enforced disappearances, minority rights, freedom of media and freedom of expression and peaceful assembly," stated the report.

The monitoring report stated that impunity for human rights violations continued to be a major concern. The EU said that Pakistan needed to take robust steps to reverse negative trends in relation to enforced disappearances and violations of freedom of expression. "In this regard, laws on blasphemy, cybercrime (such as PECA), defamation, counterterrorism and sedition should be amended or repealed."

The European Commission has already approved new GSP regulations, from January 1, 2027 until the end of 2036. This completes the review process and transitions from the 2012 Regulation to the new GSP Regulation.

According to the European Commission, the new GSP will provide reduced or zero tariffs on imports from 65 developing countries for the next decade, supporting poverty reduction and sustainable development. Moreover, the updated GSP strengthens accountability by linking trade benefits more closely to human and labour rights, climate and environment, and good governance. It also introduces improved monitoring, greater transparency, and reinforces and updates the links between trade preferences and compliance with international standards.

It does so by increasing the number of relevant international conventions beneficiaries must adhere to, and by introducing an urgent withdrawal procedure, which allows for the suspension of preferences in case of serious and systemic violations of the principles underpinning such conventions.

Finally, the new GSP includes an automatic safeguard on rice imports, protecting EU producers while preserving the development objectives of the scheme. In practice, this means that if imports from a beneficiary rise sharply above the average of their past imports over 10 years, the EU will suspend preferential rates for the rest of the year and introduce a tariff rate quota (TRQ) for the following year to prevent market disruption.