GSP helped Pakistan’s exports to the European Union soar 37 per cent during the last three years. Export of machinery, chemicals and dyes from Europe to Pakistan rose 14 per cent. These products are required to meet the growing demand for Pakistani products, particularly textiles and garments, in the European markets.
In December 2013, the EU awarded GSP Plus status to Pakistan, giving zero tariffs to 20 per cent and preferential rates to 70 per cent of the country’s exports to the region. The status is valid till 2017. The GSP Plus status is expected to boost Pakistan’s exports to $2 billion in addition to creating jobs opportunities. The biggest beneficiary of the tax concessions is the textile and clothing industry, constituting over 60 per cent of Pakistan’s exports. The country’s rivals Bangladesh and Sri Lanka are also enjoying duty-free access to the 28-member EU bloc.
Annual bilateral trade between Pakistan and the EU is more than $7 billion. The balance of trade is nearly equal. Pakistan’s main exports to the EU consist of textile and leather products and medical equipment. Under GSP Plus, Pakistan has to comply with all the 27 United Nations conventions on human rights and labor and environmental laws.