Pakistan's exports to EU have two years, and govt has one job: implementation

Pakistan has spent more than a decade building the legal framework that GSP+ demands, ratifying the conventions, passing the laws and filing the reports the European Union asks for. On that count, at least, it has kept its side of the bargain.

The difficulty, as the European Commission made clear in its latest GSP+ assessment of 16 July, is that this framework is no longer the test. From 2027, Pakistan will be judged less on what it has enacted than on what it can show working in practice. For a sector that captures most of GSP+‘s value, that shift decides whether Pakistan’s largest export industry keeps its most important market.

New rules are already in effect. Regulation (EU) 2026/1395 governs the Scheme from 2027 to 2036 and carries Pakistan into the new regime until December 31, 2028. Continuation is not automatic: to keep its preferences from 2029, Pakistan must reapply before the transition ends, with binding undertakings and a priority plan of action.

The July 16 assessment report is the baseline against which that application will be judged. The latest assessment report found that Pakistan had regressed in several areas while positive change stayed limited. Its central finding is that most progress was legislative and had not reached the ground. That is the implementation gap: the laws exist but are not being enforced as expected by the EU.

In 2025-26, Pakistan’s exports to the EU stood at $8.96 billion. The sectors benefiting most from GSP+ preferences were clothing and textiles, leather and fur articles, prepared foods and beverages and miscellaneous manufactures. Clothing accounts for a large share of total exports and GSP+ preference utilisation (95.3% approx.), underscoring Pakistan’s dependence on preferential market access for these products in its EU trade.

The top five export sectors to the EU all achieved preference utilisation rates of 93.6%–97.7% approx. As Pakistan’s exports to the EU are highly concentrated, its trade performance is exposed to sector-specific shocks (energy prices, compliance costs, demand cycles).

Those figures show our exporters use the preference fully, but not whether Pakistan is implementing the conventions the scheme rests on and that eligibility requires. Here lies the discomfort: the industry earns most of the gains from GSP+ yet has the least control over the compliance on which they rest.

It would be wrong to read the assessment as an unbroken list of failures. The Commission credited real steps: a National Commission for Minorities, a narrower death penalty, rules under the Anti-Torture Act, child-marriage legislation, and the ILO forced-labour Protocol. But the report’s weight falls on matters beyond the reach of any export firm. A mill in Karachi or Faisalabad can meet every standard set for it and still see the preference placed at risk by indicators the industry has no part in, and no power to correct.

The industry, for its part, has moved decisively on the commitments within its control, investing its own capital to meet the expectations of the same European buyers who are now watching the assessment closely. On the environment, Pakistan ranks among the leading countries for LEED-certified textile plants, with individual units cutting water and energy use by half or more; leading exporters run their own effluent-treatment and water-recycling systems, follow the Zero Discharge of Hazardous Chemicals programme and OEKO-TEX standards, have moved to on-site solar as grid power grew costly, and have backed the Better Cotton programme for over fifteen years, helping hundreds of thousands of farming households use markedly less water and pesticide.

On labour and human rights, where GSP+ is most demanding, exporters have for years opened their operations to independent social audits benchmarked to the core ILO conventions and the UN Guiding Principles on Business and Human Rights – amfori BSCI, Sedex SMETA, WRAP and SA8000 – covering wages and hours, health and safety, freedom of association and the absence of child and forced labour; meeting them is a condition of every order a European brand places.

The industry has embraced these standards as the foundation of its place in European supply chains. By the measures GSP+ sets for it, the export factory floor is already among the most accountable and closely audited parts of Pakistan’s economy.

Losing that preference would be severe and immediate. The tariffs waived would return, and garments now entering Europe duty-free would face rates around 12%. Buyers would shift sourcing, market share would erode, and the cost would fall on a sector already facing high energy prices and tight liquidity.

The deadline is not the only pressure. India concluded Free Trade Negotiations with EU in January, and its official schedule takes all textile and apparel tariff lines, currently facing duties of up to 12%, to zero once the deal takes effect. That access is not conditional on the scrutiny of thirty-two conventions; it is a treaty. Once in force, India can undercut Pakistan on the same products in the same market, and its EU textile exports are set to move past Pakistan’s.

Bangladesh sits on the other flank. It is scheduled to graduate from least-developed-country status on November 24, 2026, but EU transition rules will preserve its duty-free access for three years after graduation, until late 2029. Pakistan, meanwhile, must reapply for GSP+ beyond 2028, risking a squeeze between an FTA-positioned India and a transition-protected Bangladesh.

The answer must come from the government, and match what is at risk. The government should exhaust every diplomatic and commercial resource. The prime minister has moved: a committee was constituted to steer the reapplication. What the moment demands is pace: the window to end-2028 is short. Islamabad should engage the European Commission, its technical committees and the monitoring bodies, and bring the provinces, labour departments, courts and industry into one effort.

The hard legislative work is largely done: the conventions are ratified and the laws written. What remains is to make them work in practice, and to defend a preference that underwrites one of Pakistan’s largest industries and the livelihoods that rest on it. Two years is not long. The task is implementation, and it is the government’s to complete.

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