Pakistan’s GSP+ debate missing the point

The European Union’s engagement with the world has long been anchored in trade, though never as trade alone. Its agreements are designed not only to expand market access but also to shape how such engagement is conducted.

At the core of EU trade policy lies a strong emphasis on human rights, environmental protection, and social standards. Whether through Economic Partnership Agreements, Free Trade Agreements (FTAs), or Association Agreements, the EU has remained firm in linking trade with sustainable development.

One important pillar of this engagement is a unilateral preference: the Generalised System of Preferences (GSP). Pakistan, a consistent beneficiary of GSP+, has now entered the final phase of the current cycle, a moment that may mark an inflection point in its trade relationship with the EU.

Yet today’s discussion is not about revisiting the economic gains of the arrangement. Instead, it seeks to bring clarity to a debate that has increasingly turned emotional rather than analytical, particularly at a time when a neighbouring peer moves toward an FTA with the EU.

Much of this debate stems from the belief that Pakistan is locked into an arrangement that binds it to 27 international conventions, leaving little to no room for flexibility.

This is a perception that needs reconsideration.

Whether engaging the EU through GSP+ or an FTA, partner countries must recognise that the EU does not dilute sustainability and compliance standards across its trade architecture. Moving beyond GSP+ will likely expand commercial opportunities, but it does not remove compliance expectations. It merely relocates them into a different legal framework.

Yes, a regional peer securing a deeper arrangement naturally raises concerns. But more comprehensive engagement with the EU requires a clearer understanding of how its trade model actually works. If unilateral preferences appear strict, bilateral arrangements are even more demanding and require a greater appetite for reform. To contextualise this, it is useful to examine how sustainability is embedded across the EU’s modern trade agreements.

In the world’s largest trade network, compliance is standard:

The EU operates one of the world’s most extensive trade agreement systems, with more than 44 active arrangements covering over 80 partners.

Compliance and sustainability standards are already embedded across this framework. From Canada and the United Kingdom to partners across Latin America, Trade and Sustainable Development chapters have become standard features of EU agreements.

The same extends across Asia and the Pacific, including Japan, South Korea, Singapore, Vietnam, and New Zealand, as well as across the EU’s eastern neighbourhood and in Africa.

And the network continues to expand. Agreements with partners such as Mercosur and Mexico are progressing through ratification with similar provisions, while in ongoing negotiations, including with Australia, Indonesia, Thailand, the Philippines, Eastern and Southern Africa, and India, compliance-linked trade remains central to the EU’s approach. Such provisions have also appeared beyond traditional FTAs, including in the EU–China Comprehensive Agreement on Investment, which remains pending ratification.

Perhaps more tellingly, even agreements with narrower trade coverage are not exempt. When the EU signs limited-scope arrangements, it still embeds sustainability and compliance commitments tailored to the depth of the partnership.

Examples include the Armenia Comprehensive and Enhanced Partnership Agreement and the Angola Sustainable Investment Facilitation Agreement. Similar commitments also feature in enhanced partnership frameworks with Central Asian economies that remain under negotiation or pending ratification.

So what do these commitments actually involve?

It’s beyond ratification

Across these agreements, partner countries are expected to implement international labour and environmental standards, including core ILO principles and obligations under the Paris Agreement. But the requirements go well beyond ratification. They extend to domestic enforcement, regulatory credibility, and responsible environmental governance.

Increasingly, they also cover climate-aligned production, circular economy transitions, deforestation-free supply chains, and corporate responsibility norms, supported by structured monitoring frameworks.

Much of this terrain is already familiar to Pakistan as a GSP+ beneficiary.

However, in bilateral negotiations, countries demonstrating credible compliance are better positioned for deeper economic integration with the EU.

In response, the EU often expands liberalisation in goods and services, facilitates access to climate-friendly inputs, and broadens cooperation across emerging sectors.

This brings us to the talk-of-the-town EU–India deal, which, if anything, reinforces rather than departs from the EU’s established template.

The compliance depth of the EU–India FTA

At first glance, the agreement may be framed as a story of zero tariffs and expanded market access. But that reading is incomplete.

The deal embeds binding commitments on both sides covering climate action, environmental protection, labour rights, and gender inclusion, supported by a structured implementation framework. It also reaffirms major multilateral environmental commitments central to EU trade policy, including the Paris Agreement, the Convention on Biological Diversity, and the Convention on International Trade in Endangered Species of Wild Fauna and Flora.

On labour, the two parties remain anchored in core ILO principles, consistent with other EU agreements.

Based on preliminary disclosures, the EU–India FTA appears to draw on a dense ecosystem of at least 25 international treaties and instruments across trade, sustainable development, human rights, climate, and intellectual property, though the formal legal text is still pending.

Even beyond these embedded commitments, the compliance perimeter continues to expand. Emerging EU regulatory instruments, such as the Carbon Border Adjustment Mechanism (CBAM) and carbon credit trading frameworks, could intersect with the agreement, ensuring that both sides account for their share of emissions in bilateral trade.

GSP+ or FTA, compliance is non-negotiable

So, to put it simply, modern agreements are deeper and compliance-driven. If Pakistan under GSP+ aligns with 27 conventions, the provisions suggest that India under a deeper arrangement may still align with at least 25treaties and instruments, alongside evolving EU regulations, possibly including the CBAM.

In other words, enhanced access does not eliminate underlying obligations.

Even beyond Europe, this trajectory is becoming more pronounced. Debates around reauthorising the US GSP have similarly centred on expanding eligibility criteria to include governance, environmental, and institutional standards.

The implication is clear. No country seeking deeper integration with Western markets, particularly the EU, will be able to negotiate tariffs in isolation. In the current phase of global trade, compliance will determine who participates in deeper trade frameworks.

For Pakistan, therefore, the real risk is not that India secures an FTA. The greater risk lies in whether Pakistan is prepared to undertake the reforms required to pursue one.

The upcoming GSP+ biennial review will be the most consequential assessment under the current cycle. Demonstrating credible adherence to the 27 conventions should matter as much as debating the merits of a future FTA.

Whether Pakistan seeks continued access under a post-2027 GSP+ framework or eventually explores a bilateral arrangement with the EU, the underlying requirement remains the same: credible and sustained compliance.

So, are we finally framing the debate correctly?

Copyright Business Recorder, 2026