It would be worthwhile to examine whether such unilateral concessions have been in Pakistan tariff’s best interest. It is a fact that since the award of GSP Plus, Pakistan’s exports to the EU have increased from €3.56 billion in 2013 to €6.64 billion in 2021, or about 86%. However, a similar growth (66%) was also seen in exports to the US where Pakistan has no duty-free access.

But the growth of exports in these two markets and for a limited category of goods, did not lead to any increase in Pakistan’s overall exports, which were around 25 billion dollars in 2013 and were of the same value in 2021. percentage of GDP, Pakistan’s exports have seen a considerable fall during this period. Similarly, Pakistan’s share of global trade has shrunk.

By contrast, many other developing countries that have integrated regionally and globally (rather than seeking GSP Plus-type facilities) have significantly increased their exports and share of world trade. For example, exports from Vietnam, which now has FTAs ​​with 56 economies, and which had the same level of exports as Pakistan in 1995 at around $5 billion, jumped to $336 billion in 2021.

Under its latest FTA, signed on June 30, 2019, the EU agreed to eliminate 99% of all tariffs on Vietnamese products compared to the 66% of tariff lines we get under GSP Plus .

Since the EU-Vietnam FTA is a bilateral agreement and not a unilateral concession, Vietnam will not have to suffer EU control over its domestic policies like Pakistan will have to to stay in the scheme.

Due to its unique focus on these programs, Pakistan allocates all government grants (estimated at $800 million) to only a few selected sectors that can benefit from the GSP Plus program. It’s a similar approach to what influential industrialists enjoy in the domestic market through industry-specific SROs.

Compared to GSP Plus, we have made no effort to join the Regional Comprehensive Economic Partnership Agreement (RCEP), which is in many ways the Asian equivalent of the European Union or the North American trading bloc. To grow its exports and thrive, Pakistan has to broaden its vision, as many prosperous countries have done. Its overall exports cannot increase if it remains trapped in past policies.

Continued heavy reliance on EU and US markets and a few products is risky. If Pakistan doesn’t look beyond GSP Plus, 10 years later it could end up in the position it is in now – a low-income, vulnerable country dependent on EU largesse.


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