Pakistan is a major player in the region and an important partner for the European Union (EU). The EU is also one of Pakistan's biggest trade partners, with a total trade value of 12 billion dollars. Pakistan's exports to the EU account for 30% of its global trade, making the EU its largest export destination. The EU's preferential trade scheme, GSP+, has been a significant benefit for Pakistan, allowing it to export thousands of products with reduced tariffs.
Since joining the program in 2014, Pakistan's exports to the EU have more than doubled, making it one of the largest beneficiaries of GSP+. However, the program comes with conditions, including good governance, environmental protection, and labor and human rights. Pakistan must continue to implement these conventions to maintain access to the EU market.
However, new trade deals are emerging, and India and the EU have signed a free trade agreement (FTA). This could create new competition for Pakistan, as India is a significant exporter of textiles to the EU, similar to Pakistan. Pakistan's economy is heavily reliant on textiles, which dominate its exports, followed by leather goods and agricultural articles. To grow, Pakistan needs to move up the value chain and diversify its exports.
