Policy Brief 01/09/2023
Pakistan has witnessed a growth in its exports to EU by 46.5% since it was granted
the GSP+ status in 2014. Under this status, 91% of the tariff lines are exempted from
duties for Pakistan. Pakistan has effectively utilized the GSP+ status, with a utilization
rate of 96.5%. Its share in EU’s total trade among GSP+ beneficiaries is relatively
better, which is 0.3%. Although exports to EU have increased under GSP+ scheme,
however they have risen at a relatively slow pace. This is due to the fact that majority
of Pakistan’s exports to EU are concentrated in low value added product categories
like textile and leather products, whereas imports from EU consist of heavy
machinery and other high value-added items. The anti-export bias, in the form of heavy
import duties on raw materials, in Pakistan’s tariff policy has left our products
uncompetitive by raising their cost of production. As a result, demand for our routine
exports is falling in EU markets
