MoC begins work on action plan to implement EU’s framework

ISLAMABAD: The Ministry of Commerce has reportedly started work on an action plan to implement the European Union’s framework covering 32 international conventions, compliance with which will be mandatory for Pakistan to secure continuation of GSP+ preferences from 2029, well-informed sources told Business Recorder.

Failure to demonstrate effective implementation of the conventions could put Pakistan’s preferential access to the EU market at risk, potentially affecting billions of dollars in exports.

EU Ambassador to Pakistan Raimundas Karoblis, in a recent interview, warned that if GSP+ preferences were revoked or not continued, Pakistani textile producers could face tariffs of roughly 9 to 12 percent on products that currently benefit from zero-duty access.

Around 89 percent of Pakistan’s textile and clothing articles imported by the EU currently benefit from preferential tariffs, making continuation of GSP+ particularly important for the country’s export-oriented textile industry.

The EU’s new GSP regulation will apply from January 1, 2027, while Pakistan’s existing GSP+ status will continue under transitional provisions until December 31, 2028. A fresh application will be required for continuation of the preferences beyond the transition period, with approval subject to the EU’s assessment.

Under the new framework, the readmission condition has also been introduced. The condition relates to cooperation on the readmission of individuals who enter the EU without legal documentation or remain there without legal status. Pakistan will therefore need to ensure compliance with the relevant requirements as part of the broader GSP+ framework.

The Ministry of Commerce has also cautioned the country’s textile sector about potential risks to exports following implementation of the new GSP+ framework.

The EU has identified four broad areas for assessment—human rights, labour rights, climate and environment, and good governance. However, Islamabad is reportedly not convinced with some aspects of the EU’s assessment report.

Pakistan is currently the largest beneficiary of the GSP+ scheme, with exports to the EU estimated at around €7.1 billion under the preferential arrangement. The estimated value of tariff exemptions enjoyed by Pakistan in 2024 stood at approximately €732 million.

The Ministry of Commerce has stated that the GSP+ assessment report recognises positive developments while also identifying areas requiring further implementation and follow-up.

According to sources, the Commerce Ministry on July 23, 2026, mapped the recommendations contained in the assessment report and circulated an action matrix among relevant stakeholders. Subsequently, Commerce Secretary held discussions on the assessment report with the EU Ambassador to Pakistan on August 11, 2026.

“The Assessment Report has been received and translated into an institutional action process. Relevant Ministries/Departments are now to develop and implement actions within their respective mandates, while MoC coordinates and monitors the process,” sources said.

Explaining the implications of the new regulation for Pakistan, the Commerce Ministry has identified four key requirements: effective implementation; demonstration of implementation through evidence; coverage across the entire territory, including Special Economic Zones (SEZs) and Export Processing Zones (EPZs); and submission of a fresh application for continuation beyond the transition period.

“The new framework moves GSP+ towards more structured, measurable and evidence-based implementation and monitoring,” the sources maintained.

Effective implementation of the 32 conventions, along with continued cooperation, will be mandatory under the new framework. Monitoring will be conducted on a three-year cycle, with greater emphasis placed on documented evidence of compliance.

Complaints will be channeled through a Single Entry Point (SEP), while engagement with civil society is also expected to be enhanced.

Five new conventions are to be implemented by the Ministry of Human Rights, Ministry of Overseas Pakistanis and Human Resource Development, Ministry of Interior and Narcotics Control, and Ministry of Climate Change and Environmental Coordination.

“Compliance will increasingly depend on continuous evidence, implementation and demonstrable progress—not periodic reporting alone,” the Commerce Ministry said.

The current target is June 2028 for the concerned ministries to develop convention-wise plans of action, sources said.

Pakistan will also hold a pre-application dialogue with the EU before submitting its fresh application for continuation of GSP+ preferences beyond December 2028.

The government’s effort to develop an institutional action plan is aimed at ensuring that compliance gaps are addressed well before the fresh application process begins, particularly given the importance of EU preferential access to Pakistan’s textile and other export sectors.—MUSHTAQ GHUMMAN