Pakistan is at a critical juncture. The current political turmoil that engulfs the country has far-reaching implications, including shaping its foreign relations. One vital relationship that has historically been under-researched and under-discussed is its association with the European Union (EU). Trade, as it turns out, is the crux of this relationship, a fact underscored by existing dialogues and strategic plans between Pakistan and the EU.
Since 2014, Pakistan has enjoyed the EU’s Generalised Scheme of Preferences+ (GSP+) status. The objective of this scheme is to boost sustainable development and global economic integration in lower-income countries by providing them with preferential tariffs for their exports. While Pakistan has utilized this to export goods to the EU without import duties on 66% of product tariff lines, the GSP+ status isn’t a free pass—it demands the effective implementation of 27 international conventions centered around human rights, labour rights, environmental protection, and good governance. In essence, the EU’s trade policy serves as a measure to incentivize improvements within beneficiary nations.
The EU is Pakistan’s largest export partner, but this relationship has been disproportionately beneficial for Europe. While Pakistan’s exports to the EU have seen a consistent rise since the inception of its GSP+ status, it only contributes to a minuscule 0.3% of the EU’s external trade in goods. However, as we approach December 2023, Pakistan’s GSP+ status hangs in the balance, and recent political upheavals have intensified the EU’s scrutiny.
Last year, the European Parliament made a significant move by passing a non-binding resolution with broad support, advocating a reevaluation of Pakistan’s GSP+ status. Concerns stemmed from issues related to blasphemy laws, religious intolerance, honor killings, and rampant exploitation within the feudal system—all of which have been exacerbated by Pakistan’s current political turmoil.
A spectrum of human rights violations, censorship, religious extremism, oppression of minorities, and political witch hunts characterize modern-day Pakistan. Amidst this, Pakistan’s Deputy Foreign Minister Hina Rabbani Khar has been tirelessly advocating for positive changes within the country, trying to allay fears about its deteriorating human rights situation. But such efforts seem to be in vain as the ground reality appears to contradict the narrative.
In the past, the EU has been accused of turning a blind eye to Pakistan’s alleged involvement in terrorism and regional instability. However, recent actions such as the removal of Pakistan from the high-risk list for money laundering and terrorism financing indicate a change in stance. Nevertheless, it is time for the EU to reassess its approach.
The issue at hand isn’t just about upholding the values of the EU; it’s about the repercussions of awarding preferential status to countries that fail to uphold basic standards of democracy, rule of law, tolerance, and human rights. By doing so, the EU inadvertently undermines its own principles and foundations. Further, it discourages other GSP+ beneficiaries like Bangladesh, which have shown commendable improvements in certain areas such as labour standards. Moreover, by extending GSP+ status, the cause of international human rights may be jeopardized and peace in South Asia could be compromised.
The EU must reevaluate its position. Withdrawing GSP+ status could profoundly impact Pakistan’s exports, demonstrating the price of non-compliance and potentially driving Pakistan towards necessary reforms. Additionally, given the UK’s exit from the EU, the absence of a strong voice supporting Pakistan’s GSP+ status could influence the decision.
The EU has previously stated that only Pakistan can determine its challenges and pathway. However, the EU’s significant leverage as Pakistan’s major trading partner should be recognized. With Pakistan’s strategic value for Washington dwindling post the U.S.’s withdrawal from Afghanistan, the EU’s influence over Pakistan is poised to grow. Therefore, the EU should leverage its trading relations to effect positive societal changes in Pakistan. In these critical times, the EU’s reassessment of Pakistan’s GSP+ status isn’t just an option—it’s an urgent call to action.