The British vote to leave the European Union will not immediately affect Pakistan’s exports under the Generalised System of Preferences Plus scheme. However, Pakistan might lose a supporting voice in Brussels for continuation of the preferential package in the wake of Britain’s permanent exit from the EU.

Both Britain and Germany are major destinations for Pakistani exports under the GSP Plus scheme, which became effective on January 1, 2014, and will remain available for the next 10 years. Pakistan’s exports to the United Kingdom under the scheme are not going to be affected immediately. Moreover, Article 50 gives an existing country two years to negotiate terms — on issues like trade and migration for example — for its relationship with the EU. This suggests that Pakistani exporters will continue to enjoy the duty-free export status to Britain for the next two years.

Under the GSP Plus status Pakistani exports to the EU fell by 12 per cent in July to December 2015 from a year ago. It was only in the first year of the preferential tariff scheme, 2014, when Pakistan’s exports increased by 22 per cent year-on-year. Pakistan is now looking for new supporters from within northern Europe and France and Germany to enjoy the same privileges in the wake of Britain’s formal withdrawal from the EU. Countries in northern Europe are traditionally in favor of trade liberalisation.