Pakistan faces risk of losing duty-free access to EU market: Report

New Delhi: Pakistan may lose its duty-free access to the European Union (EU) market due to the deteriorating human rights situation, National Assembly Standing Committee on Finance Chairman Syed Naveed Qamar has said, according to a report in the Karachi-based Express Tribune.

The statement comes amid the government's assurance that there was no such threat. The standing committee also expressed disappointment over yet another failed trader scheme, as the government announced enforcement action against all traders except the 222 who joined, subject to approval by Pakistan Prime Minister Shehbaz Sharif.

"We are getting signals that the GSP+ status is in the doldrums because of human rights issues," Qamar, a former finance and commerce minister, said while chairing the committee.

The last monitoring report on the Generalised Scheme of Preferences Plus (GSP+) highlighted scores of human rights and fundamental rights violations, a weakening judicial system and curbs on freedom of expression.

The scheme runs until December 2028, and a deputy prime minister-led committee is preparing an application to qualify for the new scheme from January 2029, Minister of State for Finance and Revenue Bilal Kayani told the committee.

Pakistan was the top beneficiary of the EU's GSP+ trade scheme, recording 7.5 billion euros in exports to the bloc in 2024 under preferential tariffs, according to the fifth GSP report, which evaluated the implementation of 27 international core conventions in beneficiary countries. Continuation of the scheme is critical for Pakistan, which remains unable to bring substantial improvement in its exports despite decades of protection and fiscal incentives given to exporters, the report states,.

The EU monitoring report underlined that Pakistan needed to take robust steps to reverse negative trends on enforced disappearances and violations of freedom of expression. "In this regard, laws on blasphemy, cybercrime (such as PECA), defamation, counterterrorism and sedition should be amended or repealed," said the report.

In view of the revised GSP rules from 2027, the EU said key priorities for future engagement include accountability for human rights violations, increased efforts against torture, in-prison and capital punishment reforms, and reversing negative developments on enforced disappearances and freedom of expression.

During the 2023-2025 monitoring period, Pakistan has faced compliance issues with its GSP+ obligations, the report noted. It has regressed in a number of areas while positive change was limited, the report added.

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