New GSP scheme’s fate hangs in the balance

ISLAMABAD: The European Union’s (EU) new proposed ten-year (2024-34) GSP (Generalized Scheme of Preferences) is reportedly hanging in a balance due to deadlock between the European Parliament and the European Council, well-informed sources told Business Recorder.

Both, the EU Parliament and European Council, have strong arguments against each other’s viewpoint due to which things are not moving, the sources added.

“Since the term of EU Parliament will be over in September 2023, if issues are not sorted out by then, new GSP will not be in place and there are chances that duration of existing scheme will be extended for few years as the new Parliament will take some time to understand all the issues,” the sources added.

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The European Council defines the EU’s overall political direction and priorities, traditionally by adopting conclusions. It does not negotiate or adopt EU laws.

Pakistan has done extensive lobbying for the new scheme besides making all efforts to comply with the 27 Conventions.

According to the United Nations COMTRADE database on international trade, European Union imports from Pakistan were $9.94 billion during 2022, European Union Imports from Pakistan - data, historical chart and statistics - was last updated on June of 2023.

An analysis conducted by Friedrich Naumann Foundation, Pakistan’s bilateral trade with the EU in two periods– 2007-2013 and 2014-2022.

The findings indicate that Pakistan’s exports to the EU have increased from an aggregate USD 37 billion (2007-13) to an aggregate USD 66 billion (2014-2022) compared to its exports to the world, i.e., from an aggregate USD 150 billion to USD 217 billion in the same period.

After expiry of GSP plus in December this year, new GSP Scheme (2024 -34), the European Union will start new GSP scheme (2024- 34) announced on September 22, 2021.

The new proposed scheme aims to improve key features of the scheme to better respond to the evolving needs and challenges of GSP countries, as well as, reinforce the scheme’s social, labour, environmental and climate dimension. It will be in place for ten years. There is an expansion in the list of International Conventions from 27 to 32 that beneficiary countries will have to ratify and implement.

“As of now there is a deadlock on the new scheme and it might take a while before the final shape of the scheme is developed,” the sources continue.

The EU continuously monitors GSP+ beneficiary countries’ effective implementation of the 27 international conventions on human rights, labour rights, environmental and climate protection, and good governance. This monitoring includes exchanges of information, dialogue and visits, and it involves various stakeholders, including civil society.

The Commission publishes a report on the implementation of GSP every two years, providing information on the progress made by the GSP+ beneficiary countries in implementing the 27 international conventions.

The sources said, the Commission’s report about Pakistan is expected next month, which will indicate that how the EU thinks about Pakistan’s access to new proposed scheme or extension in existing scheme.

Copyright Business Recorder, 2023