New Delhi: Pakistan risks losing tariff relief worth nearly $837 million from the European Union (EU) unless it improves its human rights record, a new report by the European Commission warned Thursday.
The report said Pakistan needed to ensure accountability for human rights violations, increase efforts against torture, prison and capital punishment reforms, and reverse negative developments related to enforced disappearances and violations of freedom of expression to remain eligible for GSP+ (Generalised Scheme of Preferences) and comply with international commitments, especially in view of the revised GSP rules that will take effect in 2027.
“Significant concerns remained, generally impacting the rule of law and civil society space. Enforced disappearances and extrajudicial killings increased, without accountability for perpetrators,” the report said.
“Freedom of expression deteriorated due to further amendments to cybercrime, anti-terrorism and blasphemy laws, allowing for vague provisions to be used against dissidents, human rights defenders, journalists, minorities and ordinary citizens.”
The GSP+ aims to give developing countries special incentives to pursue sustainable development and good governance. To avail of the incentives, such as tariff relief, eligible countries have to implement 27 international conventions on human rights, labour rights, the environment and good governance.
The EU will cut duties and tariffs to zero on more than two-thirds of tariff lines for imports from countries that adhere to the conventions.
Pakistan is one of eight beneficiary countries that receive these incentives until at least 2027. The other countries include Bolivia, Cabo Verde, Kyrgyzstan, the Philippines, Mongolia, Sri Lanka and Uzbekistan.
For Islamabad, these incentives are key to its ability to export goods to the EU.
Key market for Pakistani exports
According to the report, Pakistan exported roughly $10 billion worth of goods to the 27-member organisation in 2022. In 2023, that figure fell to roughly $9 billion and grew to around $9.5 billion the following year.
The EU accounted for nearly a third of Pakistan’s total merchandise exports, and it is the largest market for Pakistani goods. It also remains the largest GSP+ beneficiary, with textiles and clothing making up anywhere between 70 percent and 76 percent of its export basket to the EU.
“From 2022 to 2024, about 90 percent of EU imports from Pakistan were GSP+-eligible, with a utilisation rate averaging 93 percent and rebounding to 95 percent in 2024 after an exceptional dip in 2023 driven by supply-chain disruptions and weaker demand in clothing and home textiles. As a result of GSP+, Pakistan benefited from around EUR 732 million ($830+ million) in tariff exemptions in 2024,” said the report.
This is roughly equivalent to 9 percent of Pakistan’s total merchandise exports to the EU. Clothing, in particular, accounted for roughly 95.3 percent utilisation under the GSP+ scheme, showcasing Islamabad’s dependence on the scheme for its exporters.
However, the EU report warns against a number of domestic issues within Pakistan that could impact its availing of these preferences.
“Pakistan has maintained ratification of all 27 GSP+ relevant conventions and has issued no new reservations. Although Pakistan was largely compliant with its reporting obligations to the monitoring bodies during the reporting period, it does not have a system in place to effectively follow up on treaty bodies’ concluding observations and shows only limited engagement with UN Special Procedures,” the report said.
While the report notes steps taken by Pakistan, including new legislation on violence against women and efforts to improve prison conditions, it says the country has backslid on other issues.
The report notes the alarming growth of “enforced disappearances”, especially from the provinces of Khyber Pakhtunkhwa (KPK) and Balochistan, as well as extrajudicial executions.
Balochistan and KPK have seen a surge in violence in the last few years, as Islamabad continues to struggle with maintaining domestic law and order. More recently, the Pakistani government has been facing massive protests across Pakistan-occupied Jammu and Kashmir (PoJK), which have led to state violence against protesters.
“Recent amendments to the Anti-Terrorism Act and related legislation in Balochistan and Punjab appear to authorise preventive, arbitrary detention without charge or trial and without meaningful judicial review or effective remedies,” the report notes.
“Together with other legislation such as the Actions (in Aid of Civil Power) Regulation, this risks blurring the line between legitimate law enforcement measures and enforced disappearances, and being used in a discriminatory or disproportionate manner against persons belonging to minority groups, political dissidents, human rights defenders, journalists, students and family members of victims.”
The report highlights the continued detention of former Prime Minister Imran Khan as a cause of concern for political rights within Pakistan.
It also raises the issue of discrimination against the Ahmadiyya community, while also pointing out other issues, such as child protection and the expulsion of nearly two million Afghans from the country in recent years.
The Pakistani economy remains extremely fragile. It has repeatedly entered various International Monetary Fund (IMF) schemes since 2019 to prevent economic collapse. The ability of Islamabad to avail preferences under the GSP+ scheme has helped ensure its textile industry remains one of the most competitive globally.
India’s negotiations on various trade deals have partly focused on ensuring greater competitive access for its own textiles industry, given that countries such as Pakistan, Bangladesh and Vietnam have been able to enjoy greater market access in certain sectors with Western countries.
(Edited by Sugita Katyal)