Implications of EU’s new GSP+ scheme for Pakistan

Despite hectic lobbying efforts by Pakistan seeking support for continuing its GSP+ preferences and for new scheme from EU member countries, Islamabad is being targeted in the European Parliament for growing human rights abuses.

Question was raised for written answer in late May seeking details of steps taken by the European Commission to pressurise the Pakistani regime to stop persecuting women and minorities.

The Amnesty International’s 2021 Annual Report was quoted in the European Parliament, highlighting Islamabad’s failure to curb violations and improve conditions of human rights.

The Members of European Parliament also questioned EU’s approach of ‘Change through Trade’ calling it both utopian and naïve.

The European Parliament witnessed similar questions by its Members in the previous month also. They particularly targeted continuation of GSP+ preferences to Islamabad.

Pakistan is faced with increased compliance scrutiny. The European Parliament passed resolution on Pakistan in April 2021 highlighting the issue of abuse of fundamental rights, especially blasphemy law.

The resolution signalled that failure to protect human rights and ensure justice may snap Pakistan’s GSP+ status.

Notwithstanding its claims about full compliance of 27 international conventions, the pre-requisites of GSP+, the gaps and failures of Pakistan have been glaring, particularly with regard to labour conditions including bonded labour and human trafficking, misuse of blasphemy laws and violation of children’s and women’s rights.

The EU’s proposal to add six new conventions under new GSP+, specifically related to involvement of children in armed conflict, labour inspection and trans-national organised crimes, etc. are the new areas of concern for Islamabad.

Islamabad has not even signed/ratified three of the newly added conventions, including Rome Statute of the International Criminal Court.

Major worry for Pakistani exporters has emanated from EU’s new proposals related to social, labour, environmental and climate standards to be complied with for availing the GSP+ after the current framework expires in 2023.

The tentative estimates claim that if Pakistan fails to comply with the new clauses of the GSP+ facility, it would no more be available to the country causing a loss of around USD 3 billion of exports.

Further, the new clauses of GSP+ beyond 2023 envisage enhanced role of international and local civil society, trade unions and private sector entities in monitoring rights violation.

Pakistani authorities see these clauses as difficult for negotiations. The new conditions would require putting in place the remedial measures to curb human rights abuse.

The European stake holders such as the European Parliament would be monitoring these violations.

The new GSP scheme for the next 10 years (2024-34) was proposed by the European Commission on September 22, 2021. Once adopted by the EU Parliament, all beneficiary countries, including Pakistan, will have to make fresh applications to avail GSP+ scheme.

Another concern for Islamabad is widespread apprehension among the European textile industries about unfair competition from Pakistan due to GSP+ preferences, hurting the local industries.

The EU citizens are burdened with this unfair competition in the hope of promoting democratic values and human rights in Pakistan. However, Islamabad’s efforts to safeguard human right violations have not been satisfactory.

The GSP+ facility is an ‘issue of national importance’ to Pakistan as textiles constitute 78% of Pak total exports to the EU. Nevertheless, Pakistan’s benefits from GSP+ facilities far exceed its sincerity in complying with requisite international conventions.

The European Institute for Asian Studies [‘Policy Brief’ - March 2022] stated that continuation of GSP+ facility to Pakistan is similar to promoting ‘debt slavery’.

The brief highlighted the plight of labour in Pakistan stating that it is ‘appalling’ as arrangements like debt slavery, especially in rural areas and ‘denial of opportunities for education and employment’ continue unabated besides poor social security and lack of standard minimum wages.

The clauses of proposed new GSP+ scheme would be difficult for Pakistan indeed.

The odds against Pakistan in retaining the EU’s GSP plus scheme post 2023 has increased due to its poor track record in human rights violations as well as with the inclusion of six additional international conventions for compliance.

It is a curious question as to how Islamabad responds to the new GSP+ clauses.

Petros Aramidis is a geopolitical analyst based in Athens.