Members of the European Parliament (MEPs) have voted to extend Pakistan’s Generalised System of Preferences (GSP) status, along with other developing countries, for an additional four years, maintaining it until 2027.
Pakistan’s Federal Minister of Commerce and Industry, Dr. Gohar Ejaz, announced this extension on Twitter, expressing satisfaction with the MEPs’ decision.
The Generalised Scheme of Preferences allows developing countries to pay lower or zero tariffs on exports to developed countries. Pakistan benefits from the GSP+ arrangement, providing generous tariff preferences, primarily involving zero duties on approximately two-thirds of product categories.
The extension awaits approval from the European Council. Pakistan has actively campaigned for the GSP scheme’s continuation and has taken substantial steps to align with the EU’s requirements, including ratifying and implementing international conventions focusing on human and labor rights, environmental protection, and good governance.
While the extension of Pakistan’s GSP status may seem straightforward, it is subject to regular reviews conducted by the EU every two years. The findings of the most recent review remain undisclosed, introducing an element of uncertainty into Pakistan’s hopes for an extension.
Trade relations between the EU and Pakistan have shown significant growth in recent years, reaching $14.857 billion in bilateral trade in 2022. The extension of the GSP status until 2027 is poised to further strengthen trade ties between Pakistan and the European Union, fostering economic growth and development for both parties.
In addition to Pakistan, the European Parliament has extended the GSP scheme’s rules for over 60 developing countries until 2027. This extension is due to ongoing negotiations between the Parliament and member states on new rules, which were paused in June due to differences. The extension grants more time for an agreement on the new rules.
The extension was emphasized as necessary to prevent socio-economic disruptions for beneficiary countries and companies. The European Union clarified that the rollover is approved to avoid a cliff edge at the end of 2023 and is not related to Pakistan’s or any other beneficiary’s performance.