New Delhi, Oct 24 (IANS) The takeover of Khyber Pakhtunkhwa’s provincial government by Pakistan has not only intensified political crisis in the country but also threatened to complicate Pakistan’s relations with the European Union, particularly given its dependence on the Generalised Scheme of Preferences Plus (GSP+), a new report in Brussels Signal has warned.
The GSP+ mechanism allows Islamabad to export a wide range of products to the European market duty-free in exchange for implementing 27 international conventions covering human rights, labour rights, environmental protection and good governance.
“Allegations of arbitrary detentions, restrictions on fundamental freedoms and military abuses could prompt a European review of Pakistan’s compliance with these commitments,” the report mentioned.
It further stated that the EU’s most recent monitoring report pointed to a rise in enforced disappearances in Khyber Pakhtunkhwa and Balochistan, “and to preventive detention powers that allow suspects to be held without charge or meaningful judicial oversight”.
Brussels has not announced the withdrawal of GSP+ so far, but any suspension “would require an assessment and a formal procedure, but the economic consequences could be considerable”.
Pakistan exported about 7.5 billion euros worth of GSP+-eligible goods in 2024 and benefited from an estimated 732 million euros in tariff exemptions.
The European Union accounts for around 28 per cent of Pakistan’s total exports. Textiles and clothing represent approximately three-quarters of its sales to the EU market.
“Losing these advantages would force many manufacturers to face standard tariffs, which can reach around 12 per cent on certain garments. Companies would have to reduce their margins, raise prices or accept a loss of orders,” the report said.
According to the report, the most likely outcome is that European consumers would ultimately bear the costs rather than businesses.
It further stated that the EU’s GSP reform from early next year will require Pakistan to reapply to maintain its preferential access beyond 2028.
–IANS
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