Pakistan
Since January 2014, Pakistan has GSP+ status and can benefit from preferential access to the EU market. In compliance with the GSP Regulation, Pakistan has ratified all 27 core international conventions on human rights, labour standards, environmental protection, and good governance. With a per-capita income of $1,365 in 2023, Pakistan is classified as a lower-middle income economy. Total EU imports from Pakistan amounted to €8.0 billion in 2023, of which €6.2 billion were imported using the GSP+ preferences. This makes Pakistan the largest beneficiary among all GSP+ countries.
What is the GSP+?
The GSP+ is a special incentive arrangement for Sustainable Development and Good Governance that supports vulnerable developing countries. Next to fulfilling the eligibility requirements of the Standard GSP, GSP+ countries are required to ratify 27 international conventions on human rights, labour rights, environmental protection and climate change, and good governance. In order to ensure effective implementation of the conventions as well as compliance with reporting obligations, the EU engages in monitoring activities with the GSP+ countries. GSP+ beneficiaries can benefit from complete duty suspensions for products across approximately 66% of all EU tariff lines.
At a glance: EU preferential imports from GSP+ beneficiary countries (2023, € million)
247.5M (2023)
Population
Federal Parliamentary Republic
Government
0.0% (2023)
GDP Growth
30.8% (2023)
Inflation
$ 337.9B (2023)
GDP
Facts about Pakistan's economy
Natural Gas Reserves
Pakistan has considerable shale gas reserves, which have not yet been exploited due to difficult terrain and environmental constraints. Despite the reserves, Pakistan's overall production of natural gas has declined in recent years.
Export Products
Pakistan's most important export products are garments and textile products (in particular trousers, linen, t-shirts, and pullovers made from cotton) but also a range of other manufactures, such as medical instruments and appliances. Rice is the main agricultural product for export.
Trade Partners
China, the EU, the UAE and the US are Pakistan's most important trading partners. Most imports originate from China (22% in 2023), followed by the UAE (12%). The most important export markets are the EU (32% in 2023), followed by the US (18%) and China (9%).
Economic Structure
Services account for approximately 51% of the GDP (2023), followed by agriculture with a share of 23%. Important agricultural products are cotton, wheat, rice, sugarcane, and different sorts of fruits. The industry sector, dominated by textiles and apparel as well as food processing, contributes nearly 21% to Pakistan's GDP.
Usage of GSP+ Preferences
About 79% of the EU's total imports from Pakistan were imported using GSP+ preferential tariffs in 2023. The preference utilisation rate, which represents the ratio of preferential imports to GSP+ eligible imports, stood at 88%.
Trade with the EU
Total trade between the EU and Pakistan summed up to €10.6 billion in 2023. The EU is Pakistan's second most important trading partner, behind China, with a share of approximately 15%. 32% of Pakistan's exports go to the EU market, making the EU the most important export destination for products from Pakistan.
Pakistan and the EU
Imports from Pakistan by product section (2023, € million)
Imports from Pakistan over time (€ million)
PAKISTAN AND THE EU GSP
Economic Impact
90%
A large share of Pakistan's exports to the EU was eligible for tariff reductions under the GSP+ in 2023.
88%
Pakistan's preference utilisation rate in 2023.
85%
Share of zero-duty imports from Pakistan.
Preference utilisation and export diversification
EU imports from Pakistan (€ million)
Preference utilisation (%) vs. total eligible imports (in € million)
Most EU imports from Pakistan are eligible for GSP+ preferences. Preference-eligible imports steadily increased - leaving aside the volatility caused by the pandemic in 2020-2022 - from €3.8 billion in 2013 to €7.0 billion in 2023. Pakistan's preference utilisation rate is consistently among the highest rates of all GSP+ beneficiary countries, being clearly above 90% in all years from 2014 to 2022; in 2023 it dropped to 88%. The strong increase of about 28 percentage points between 2013-14 can be explained by the additional preferences granted to Pakistan after its transition to GSP+ status on 1st January 2014. The preference utilisation rate in the three dominant import sections, apparel, textiles, and leather articles, also dropped. The decrease was particularly high for textiles, from 98% in 2022 to 84% in 2023.
The largest product sections under the GSP+ (€ million, 2023)
The utilisation of preferential tariffs remains highly concentrated on apparel and textiles. Apparel alone accounted for 72% of all preferential imports in 2023. Silk, wool and other fibres and fabrics account for another 11% of preferential imports, although decreasing. From 2021 to 2023, food preparations, rubber and plastics were among the fastest growing major sectors. This shows the country's efforts to diversify product sections. The opportunity remains to further diversify product sections and to shift to sectors with higher value-added products.
SUSTAINABLE DEVELOPMENT AND MONITORING PRIORITIES
During the monitoring cycle 2020-2022, Pakistan experienced unprecedented economic, political, and environmental challenges: the global impact of the COVID-19 pandemic, the energy and food crisis induced by the unprovoked and unjustified war of aggression of Russia against Ukraine as well as the unprecedented floods hit the economy and the Pakistani population hard. Despite the political turmoil with a change of government on federal level and strong tensions between government and opposition at federal and provincial level, Pakistan has undertaken important legislative steps in areas linked to its sustainable development in line with GSP+. It will be crucial for Pakistan to continue legislative reforms and to implement legislation so that they lead to tangible improvements for all Pakistanis. Pakistan is the largest exporter to the EU under the GSP+ and the EU is Pakistan’s most important export destination. However, Pakistan relies significantly on textile and apparel for its exports. Export diversification would help Pakistan reduce its trade imbalances and would also increase its resilience to external economic pressures and shocks.
Monitoring priorities during the reporting period 2024-2025
Enforced disappearances
Torture prevention
Death penalty
Freedom of expression and belief and minority rights
Violence against women, transgender persons, and minorities
Right to information
Labour inspectorates
Freedom of association and the right to collective bargaining
Child and forced labour
Combatting climate change and environmental degradation
Fight against corruption
Drug control
Reporting
For the reporting period 2024-2025, the EU has focussed its monitoring activities on thirteen priority areas. The Government of Pakistan is clear on its commitment to maintain its GSP+ eligibility and during the monitoring period it has engaged openly with the EU at all levels. Political will needs to be coupled with more determined action for implementing reforms, in particular to better protect human and labour rights.
EU-Pakistan Bilateral Development Cooperation
DG INTPA
Access all info about EU-Pakistan relations on the International Partnerships website.