ith the approaching expiry (on December 31, 2023) of the European Union’s General System for Preferences Plus arrangement with nine states, the European Commission has suggested granting a four-year extension in the arrangement.

However, there is a risk clearly - conveyed to the Pakistani authorities through diplomatic channels - that the EU might suspend the GSP Plus status of Pakistan if general elections are not held within the constitutional timeframe after the dissolution of the National Assembly. The military court trials of political workers are another point of concern for the EU.

Initially, the EC had discussed the possibility of granting an extension for two years but it finally agreed on a period of four years. The extension is subject to the approval of the EU Parliament. It is believed that the EU Parliament will assent to the proposal worked out by the bureaucratic arm of the EC.

The extension has been proposed as a transition prior to working out modalities and finalising the new GSP Plus, mainly because the tenure of the EU Parliament will end next year.

The EU Parliament will not have sufficient time to pass new legislation for the enactment of a new GSP Plus.

Amid concerns in EU regarding certain rights violations in Pakistan, the EU ambassador to Pakistan, Dr Riina Kionka, had stated in her tweets that the EU monitoring of the implementation of 27 conventions linked to the GSP Plus status would be made public soon. She had said that the EU was concerned over the freedom of the media and freedom of expression situation in Pakistan.

The crackdown against the PTI has garnered a lot of attention. Military court and anti-terrorist court trials of political workers remain a concern. Pakistan has agreed to a public trial and adequate legal representation as a part of the International Convention of Civilian and Political Rights.

After the surfacing of the EC’s suggestion for granting an extension in the GSP Plus for four years, if it was agreed by the EU Parliament and EU Council. This means that the preferences and obligations under the current system will continue beyond the end of the ongoing year.

According to the European Union office based in Islamabad, the monitoring of the effective implementation of the 27 conventions will continue, including through expert missions and regular reports.

Pakistan’s trade with the European Union increased by 27 percent from $10.64 billion in 2013-14 to $13.53 billion in 2020-21. Pakistan’s exports to the EU increased by 47 percent from $6.10 billion in 2013- 14 to $8.94 billion in 2020-21. The balance of trade improved in favour of Pakistan from $1.55 billion in 2013-14 to $4.36 billion in 2020-21.

“Scrutiny on Pakistan will remain high in particular in the areas pointed out in the previous reports. The outgoing and future governments will have to demonstrate their commitment through tangible action on legislative, administrative and implementation levels. As estimated in the proposal for extension, by granting zero duty access to the European Market under GSP+, the EU is losing out on more than 500 million EUR in import duties on Pakistani goods,” the EU office said.

Pakistan secured the GSP Plus status in 2014. It was initially hoped that exports to the EU would double on an annual basis. For its part, Islamabad agreed to implement 27 UN Conventions. Progress on all 27 conditions is monitored.

The European Union comprises 27 member states. It is the largest exporting partner of Pakistan mainly because Pakistani products have duty-free access to the EU on 91 percent tariff lines under the EU’s Special Incentive Arrangement for Good Governance and Sustainable Development.

The continuation of GSP+ beyond 2023 is crucial to sustain Pakistan’s economic growth. This will be hindered if Pakistan does not ensure social and environmental sustainability across all sectors.

APTMA’s secretary general, Shahid Sattar, says that “the EU-Pakistan trade has increased substantially since 2013. Pakistan’s exports to EU nations account for 28 percent of all its exports. Pakistan’s exports to the EU increased by 87 percent between 2013 and 2021, from 3.56 billion euros to 6.64 billion euros.”

Pakistan’s trade with the EU has increased by 27 percent from $10.64 billion in 2013-14 to $13.53 billion in 2020-21. Pakistan’s exports to the EU have increased by 47 percent from $6.10 billion in 2013- 14 to $8.94 billion in 2020-21. The trade balance has improved in favour of Pakistan from $1.55 billion in 2013-14 to $4.36 billion in 2020-21.

Sattar says several different textile firms are in the process of establishing warehouses in the EU markets with the aim of increasing their penetration in the markets. Uninterrupted continuation of the GSP Plus is crucial for boosting Pakistan’s exports in the years to come.

The writer is senior staff reporter, The News International, Islamabad