Committee Warns Pakistan GSP+ Access at Risk
Pakistan GSP+ access could be in trouble because of a worsening human rights situation, the chairman of the National Assembly Standing Committee on Finance warned on Tuesday. Syed Naveed Qamar gave the warning while chairing a meeting of the committee in Islamabad, even as the government told members that it saw no such threat.
Qamar, a former finance and commerce minister, said the committee was receiving signals that Pakistan’s GSP+ status was in difficulty because of human rights issues. He did not name the exact concerns that could lead to an adverse decision by the European Union.
The warning matters because GSP+ is one of Pakistan’s most valuable trade arrangements. Eligible goods enter the European Union at reduced or zero duty, provided the exporting country implements international conventions on human rights, labour rights, environmental protection and good governance. Pakistan has held GSP+ status since 2014, and its textile exporters depend heavily on it.
What the last monitoring report found
The last monitoring report on GSP+ covered the 2023 to 2025 period. It recorded scores of human rights and fundamental rights violations, a weakening judicial system and curbs on freedom of expression, according to the committee discussion.
The report said Pakistan needed strong steps to reverse negative trends on enforced disappearances and freedom of expression, and that laws on blasphemy, cybercrime, defamation, counterterrorism and sedition should be amended or repealed. Pakistan had regressed in several areas, while positive change was limited.
Under the revised GSP rules from 2027, the European Union has set key priorities for future engagement. These include accountability for human rights violations, greater efforts against torture, reforms to prisons and capital punishment, and reversing negative developments on enforced disappearances and freedom of expression.
Minister of State for Finance and Revenue Bilal Azhar Kayani told the committee that the scheme runs until December 2028. A committee led by the deputy prime minister is preparing an application to qualify for the new scheme from January 2029. That application will be central to whether Pakistan keeps preferential access after the current arrangement ends.
Pakistan was the top beneficiary of the scheme, recording 7.5 billion euros in exports to the bloc in 2024 under preferential tariffs, according to the fifth GSP report.
A trader scheme that signed up only 222 new traders
The same meeting exposed a second failure. The government announced enforcement action against traders who did not join its fixed tax scheme, after only 222 new shopkeepers joined against a hope of one million out of 3.7 million non-filers.
Kayani said traders now had no excuse, because the government had accepted all their demands. These included exemption from audit, a fixed tax rate and no dealings with the Federal Board of Revenue. The scheme, offered in June, was the third such attempt since 2022. There will be no further extension after it expired on 31 October, he said.
The minister said the government had consulted the attorney general before taking legal action, but did not disclose the nature of that action. Sources told the committee there could be legal and ethical issues if traders receive a first default notice of Rs10,000 under the new scheme, while any non-trading person must pay Rs25,000 for late filing.
Qamar repeatedly asked whether Prime Minister Shehbaz Sharif and the federal cabinet backed punitive action, and whether they would hold firm if traders threatened a strike. Kayani replied that the government was committed to action and was preparing an enforcement plan for the prime minister’s approval. He said traders had no reason to strike, since the scheme had been prepared with their input.
Members also questioned whether the tax authority could enforce at that scale. Qamar said it lacked the manpower to pursue all traders. Muttahida Qaumi Movement-Pakistan member Jawed Hanif suggested suspending bank accounts or other services to compel filing. Kayani said severing services was a last resort.
Why Pakistan GSP+ access and the trader scheme belong in the same story
The warning comes after Pakistan’s EU trade benefits were set to end on 31 December 2028, and as Pakistan pushed GSP+ trade with Germany. The trader scheme figures also follow retailers facing fines up to Rs50,000 under the FBR plan and 220 shopkeepers joining the retailers tax scheme.
Frequently asked questions
What is GSP+?
GSP+ is the European Union’s Generalised Scheme of Preferences Plus. It gives eligible developing countries duty-free or reduced-duty access to European markets, on condition that they implement international conventions on human rights, labour rights, environmental protection and good governance.
Why did the committee warn that Pakistan GSP+ access is at risk?
Committee chairman Syed Naveed Qamar said Pakistan was receiving signals that its GSP+ status was in difficulty because of human rights issues, citing the last monitoring report’s findings on rights violations, a weakening judicial system and curbs on freedom of expression.
How long does the current GSP+ scheme run?
The current scheme runs until December 2028. Pakistan must apply to qualify for the new scheme from January 2029, and that application is being prepared by a committee led by the deputy prime minister.
How much did Pakistan export to the EU under GSP+ in 2024?
Pakistan recorded 7.5 billion euros in exports to the European Union in 2024 under preferential tariffs, according to the fifth GSP report discussed by the committee.
Why did only 222 traders join the fixed tax scheme?
The government says it accepted traders’ demands, including audit exemption, a fixed rate and no dealings with the Federal Board of Revenue, yet only 222 new shopkeepers joined against a hope of one million. The committee did not settle on a single reason, and enforcement action is now being prepared for the prime minister’s approval.
