Pakistan’s exports to European Union countries may stay in a jeopardy zone in the time to come as the European Parliament on Thursday adopted a calling for a review of trade relations with Pakistan and ending its eligibility for the Generalised Scheme of Preferences (GSP) status as blasphemy cases are on the rise in the country.
The resolution was adopted just weeks after the government and the recently banned Tehreek-e-Labbaik Pakistan (TLP) brokered a concurrence to end the protest by the activists of the prescribed party that had paralyzed major cities which had caught international attention as the religiopolitical outfit led to a massive anti-France protest.
Pakistani exports to the EU
Pakistan is a major beneficiary of the trading opportunities offered by the EU Generalised Scheme of Preferences (GSP). From 1 January 2014 Pakistan benefits from generous tariff preferences (mostly zero duties on two-thirds of all product categories) under the so-called GSP+ arrangement aiming to support sustainable development and good governance.
Pakistan textile exports worth $13 billion, the exports to EU countries stand at $6 billion if (GSP) status facility is withdrawn, major reduction in exports will take place. Due to a major gap in exports, industrial activities will plunge in the country which may cause a new rise in unemployment.
European Union is Pakistan’s most important trading partner, accounting for 12.8 percent of Pakistan’s total trade in 2015 and absorbing 23.7 percent of Pakistan’s total exports.
Pakistani exports to the European Union are dominated by textiles and clothing, accounting for 82 percent of Pakistan’s total exports to the EU in 2016. Pakistan’s imports from the EU mainly consist of machinery and transport equipment (40.2 percent in 2016) as well as chemicals (19.5 percent in 2016).
From 2006 to 2016, EU28 imports from Pakistan have almost doubled from €3,319 to €6,273 million. The growth of imports from Pakistan has been particularly fast since the award of GSP Plus (€5,515 million in 2014).
In 2018-19, Pakistan’s exports to the EU stayed at $8.932 billion while the import stood at $6.478 billion while the export to France in the same period was at $500 million. From 2019 to 2020, Pakistan’s exports to the EU were at $6.479 million and the imports stood at $5.167 million, according to the latest data.
Will the govt save the GSP+ status facility?
Although the EU is right in saying that it is in Pakistan’s interest to review laws, defend minorities and encourage tolerance, its parliament’s message to penalize the country scarcely addresses the issue.
Far too many people have been wrongly accused and imprisoned for years pending a trial and, in some horrible cases, have been victims of vigilante violence.
Pakistani should take action to give stronger punishment and quick justice for those who take the law into their own hands so religious extremism and misuse of blasphemy laws could be discouraged in the country.
On the other hand, Pakistani authorities are in contact with its representative in Brussels and an emergency meeting has been convened for Monday that will firm up the modus operandi on how to go about it and undertake the situation. Under EU GSP plus regime Pakistan is committed to fulfilling obligations and has made reliable progress in this regard.
We are confident that through continued effort and engagement, Pakistan would be able to resolve any misgivings in this respect. The government of Pakistan should prevent the situation and come up with effective diplomatic endeavors to avoid any EU action against the GSP plus facility.