Pakistan: GSP Plus status extended for another four years

According to Pakistan’s leading newspaper Dawn, the European Parliament on Thursday unani­mously voted to extend the current generalized system of preferences (GSP) for another four years until 2027 for developing countries, including Pak­istan, to enjoy duty-free or minimum duty on exports to the European market.

The parliament voted with 561 in favor, five against and two in abstention to extend the current rules on the GSP schemes, including GSP Plus, after talks with the EU Council on the new rules were paused in June, an official statement issued by the EU Parliament said.

In September this year, the INTA Committee, a trade body of the EU Parliament, approved the extension of GSP schemes for 60 developing countries.

Caretaker Commerce Minister Gohar Ejaz told Dawn that the decision will ensure that Pakistani exporters can keep selling their goods to the EU market with certainty. He said the EU is a major market for Pakistani exporters, adding that all schemes under GSP were extended for four years.

“I take this opportunity to reiterate Pakistan’s commitments under the scheme for the betterment of all,” the minister said, adding that Pakistan will comply with all obligations and effective implementation of 27 EU conventions.

EU Ambassador to Pakistan Riina Kionka in a post on X said this rollover is proposed so as to avoid a cliff edge at the end of 2023. “It is unrelated to Pakistan’s performance or that of any other beneficiary country. EU member states will decide soon and monitoring will continue,” she further said.

In another post, Ms Riina said that together with the EU team, “I whole heartedly support the commitment of Minister Ejaz and government of Pakistan to fully meet GSP+ obligations, referring to the implementation of 27 conventions on labour, human rights, political rights and press freedom.”

It is worth mentioning that the current GSP regulation was set to expire at the end of this year, and negotiations between the EU parliament and the council of member states took place in January 2023 to establish new rules.

In June, talks were paused as the gap between the position of the parliament and member states could not be bridged, and as a result, the current rules were prolonged.

The draft report by rapporteur Heidi Hautala only amends the date of application of the regulation currently in place, extending it until December 31, 2027. The extension gives more time for the European Parliament and member states to agree on the new rules.

“By dealing swiftly and efficiently with this prolongation and rollover, the parliament underlines that it will not let beneficiaries down,” the rapporteur said during the plenary on Wednesday.

“However, this rollover is an unfortunate consequence of not being able to reach an agreement between the council and parliament on the ongoing review of the GSP regulation,” she said, adding that there are two outstanding issues: the link the council wants between tariff preferences and the obligation of readmission, and safeguarding rice producers without creating excessive trade barriers.

On the first issue, Hautala said, “The European Parliament’s position is against the inclusion of this type of migration policy measures because this is a trade and development policy instrument, which benefits two billion people in the developing world.”

She added, “The trilogues will continue, and it is vital to conclude them as soon as possible. Now it is very important that the parliament and the Spanish presidency go the extra mile and make this review a reality. This would require, however, a change in the approach by the council on the question of readmissions. We need to preserve the GSP as a development tool.”

The EU Council is expected to give its final approval for the extension of the current rules soon.