As the European Union’s (EU) 10-year preferential trade arrangement approaches its expiry in 2023, Pakistan has intensified efforts to enhance compliance with key international conventions covering a wide spectrum of human rights, labour standards, and environmental protections.
An EU monitoring team recently visited Pakistan and compiled the assessment report on the Generalised Scheme of Preferences Plus (GSP+) for 2014-2023.
As a report issued by the European Institute for Asian Studies (EIAS) and authored by Tim Wilms states, the core purpose of the GSP+ arrangement will positively impact labour conditions for the most vulnerable groups in Pakistan’s society. Yet, this message has still not been heeded by the decision-makers and is not being enforced by Pakistan’s industry stakeholders.
In fact, much of the advantages of the EU’s preferential trade scheme in Pakistan, Tim Wilms says, are pocketed by the business elite and modern Zamindars (feudal landlords), with little positive impact on the poorest levels of society as envisioned by the GSP+ framework. This is the reality of GSP+ in Pakistan, and there is no reason for the EU to continue to give this status when it expires at the end of the year.
The Dawn newspaper reports that EU monitoring team is expected to comment on Pakistan’s performance in terms of human rights, labour standards, press freedom and environmental protection, which are linked with the availing of GSP+ preferences. It will also become the basis for the renewal of GSP+ status for Pakistan.
The current scheme, launched in 2014 for thirteen countries including Pakistan, will expire in 2023.
The EU Council and Parliament will also finalise new GSP terms, which will spell out details for compliance and implementation. The 2018-2019, GSP+ Assessment Report submitted to the European Parliament and Council notes that Pakistan is committed to meeting its obligations but has significant challenges to implementing the obligations of the UN Treaty Body such as devolved provincial powers. Apart from this limited institutional coordination, lack of institutional capacity, scarce human and financial resources, and overriding security concerns make it near impossible for Pakistan to ever become fully compliant.
Consequently, the report states that “Pakistan must demonstrate that it will concretely increase its efforts and take more proactive and sustained actions to implement legislation and to address problematic areas,” according to the EU assessment report.
For making Pakistan’s case for the next GSP+, the Parliamentarian’s Commission for Human Rights (PCHR) and Justice Project Pakistan have held consultations in Islamabad from 5-8 June 2023 to assess recent developments, highlight progress, and frame strategic recommendations reform. These high-level consultations focussed on human rights priorities defined in the last GSP+ report, while shedding light on the challenges ahead.
Key stakeholders from the federal and provincial governments, parliamentarians, senior members of the judiciary, and prominent members of civil society were part of the consultations.
These discussions were livestreamed for the European Parliament, representatives from the European Council of member states and the European Commission’s GSP+ team in Brussels. The EU’s trade policy towards Pakistan is really a carrot-and-stick approach. The GSP+ allows Pakistan to export goods to the EU at zero import duties on 66% product tariff lines.
Yet the scheme comes with significant strings attached and recipient countries of the preferential scheme commit to three key measures: the ratification and implementation of 27 international conventions covering a broad range of human rights, labour standards and environmental protections, fulfilment of UN Treaty Body reporting obligations, and cooperation with the European Commission’s monitoring framework.
Progress in these areas is regularly monitored by civil society actors as well as the European Commission, European Parliament, and representatives of the European Council of member states. Pertinently, local NGOs, academics, trade unions and civil society groups in Pakistan continue to be very critical of the extent to which Pakistan is complying with the basic principles on which the GSP+ status has been granted by the EU.
On paper, domestic laws and regulations exist, or have been introduced, by the government to comply with the international conventions.
The European Commission Report assessment of 2018- 2019 details how despite some changes such as the enactment of the Transgender Persons Act in 2018, progress has been limited and “painfully slow” on many conventions, particularly in the areas of implementation and enforcement. Going forward, the weakened capacity of the current government led by Prime Minister Shehbaz Sharif and the heavily polarised nature of Pakistani politics could make sustained political focus on fulfilling these commitments only more difficult.
Tragically, Pakistan has failed to comply with some of the most basic elements, and both control mechanisms and enforcement procedures are still sadly lacking.
The bulk of the Pakistan-EU relationship continues to centre around trade, despite the existence of several bilateral institutionalised frameworks such as the Pakistan-EU political dialogue and a Strategic Engagement Plan.
The EU is Pakistan’s top export partner with the balance of trade heavily tilted in Europe’s favour. Since January 2014, Pakistan has been a beneficiary of GSP+ status. This scheme grants lower-income countries preferential tariffs for their exports to support sustainable development and their integration into the global economy.
GSP+ status allows Pakistan to export more than 78% of its products to the EU, which is the second most important trading partner accounting for 14.3% of the total exports in 2020 and 28% in 2021. Since acceding to the GSP+ scheme, trade between the EU and Pakistan increased from €6.9 billion in 2013 to €12.2 billion in 2021 making Pakistan the largest beneficiary amongst all GSP+ countries.
In 2020, the EU accounted for 16.1% of Pakistan’s external trade in goods, while Pakistan accounted for merely 0.3% of the EU’s external trade in goods. However, Pakistan’s exports to the EU have consistently risen since the country received GSP+ status.
With Pakistan’s GSP+ status set to expire at the end of this year, the EU is reviewing whether this should be extended. With the current political crisis, it is no surprise that Pakistan’s preferential status is under greater scrutiny by the EU.
In 2021, the European Parliament adopted a non-binding resolution with overwhelming support calling for a review of Pakistan’s GSP+ status based on blasphemy laws and religious intolerance, which were on wide display during the government’s inability to control the anti-France Islamist protests carried out by the extremist Tehreek-eLabbaik Pakistan group forcing French companies and citizens to leave the country.
Notably, members of the European Parliament such as Barbara Matera have often highlighted the issue of honour killings and domestic violence against women in the context of the GSP+ extension. Similarly, the EIAS report by Tom Wilms mentions Pakistan’s enduring feudal system of exploitation, which a support scheme like the GSP+ worsens.
To top this analysts such as Dr Siegfried Wolf from Heidelberg University have alluded to Pakistan’s actions as a state sponsor of terrorism and called for the GSP+ to be removed “as a possible sanctuary measure towards Pakistan”.
While Pakistan’s Deputy Foreign Minister Hina Rabbani Khar is busy visiting European capitals to try and convince Europeans of positive internal changes in Pakistan and to dispel fears of the deteriorating human rights situation and crackdowns, the reality is far from this as a glance at any Pakistani media demonstrates.
The Europeans themselves are far from convinced, in April 2023, Sweden indefinitely shut down its Embassy in Pakistan due to security concerns. By granting preferential status to countries that violate basic standards and values of tolerance, rule of law, democracy, and human rights, which are intrinsic to the EU, the EU risks jeopardising its own principles and foundation.
Pakistan’s reaping of the rewards of GSP+ without adequate compliance also lessens incentives for countries like Bangladesh that have performed well in several of these areas including labour standards.
For far too long, Brussels has indulged in whitewashing Pakistan’s role in terrorism and South Asian instability, going so far as to regularly host and legitimise the so-called Prime Ministers of Pakistan Occupied Jammu & Kashmir (PoJK). Further, following the decision by the Financial Action Task Force in 2022, the EU also removed Pakistan from its list of high-risk countries regarding money laundering and terrorism financing in March this year.
It is about time the EU reconsidered this approach. The EU’s response to the current political crisis is that “Pakistan’s challenges and pathway can only be determined by Pakistanis themselves”.
Rampant human rights violations, widespread corruption, religious extremism, restrictions on press freedom, suppression of activists and dissent, violence against protesters, a crackdown on Opposition leaders, suppression of democratic freedoms, blasphemy laws, oppression of minorities, political witch-hunts, collusion with the Afghan Taliban, these are the characteristics of today’s Pakistan, all of which have only exacerbated during the current political turmoil.
As Pakistan’s largest trading partner and export destination, the GSP+ gives the EU significant leverage to enact positive change in Pakistani society and use the asymmetry in trade relations to its advantage.
Since Pakistan’s strategic value for Washington has diminished after the latter’s withdrawal of its forces from Afghanistan, the EU’s role in Pakistan should be determined by its ability to leverage the GSP+ status to make Pakistan mend its ways.
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