Pakistan’s textile industry and the European Union have begun discussions on the renewal of the European Union’s Generalised Scheme of Preferences Plus (GSP+) trade facility, ahead of its scheduled expiry in 2027. During a meeting between an EU delegation and senior representatives of the All Pakistan Textile Mills Association (APTMA) in Lahore, EU Ambassador Raimundas Karoblis highlighted the importance of progress on human rights, labour standards and environmental reforms for Pakistan to retain eligibility under the trade arrangement. The discussions come as Pakistan prepares to address requirements associated with the continuation of the facility.
Ambassador Karoblis, accompanied by First Secretary Kert Ajamaa, Development Cooperation Manager Theis Munksgaard-Hansen and Senior Economist and Trade Advisor Husnain A Iftakhar, met senior APTMA office-bearers at APTMA House on Friday. APTMA Chairman Kamran Arshad, Chairman-elect Asad Shafi and other senior representatives received the European Union delegation. During the meeting, the EU representatives discussed the requirements Pakistan would need to address as part of the process for maintaining access to GSP+ trade benefits beyond 2027.
Karoblis said Pakistan would need to demonstrate concrete progress in implementing and legislating international conventions linked to continued GSP+ eligibility. He also called on the business community, particularly exporters, to increase efforts to address compliance requirements and work with the government on issues identified by the European Commission. These areas include human rights, labour rights, governance and environmental standards. The ambassador also recognised initiatives being undertaken by Pakistan’s textile sector to improve sustainability, noting that such efforts would be relevant to the EU’s assessment of any future application for renewal.
APTMA Chairman Kamran Arshad said the European Union remains Pakistan’s largest trading partner and highlighted the importance of GSP+ for the country’s export sector. According to Arshad, the facility has enabled Pakistan to export 78 percent of its goods to the European market on a duty-free basis. He said the arrangement has supported employment, investment and technological upgrading within the country’s textile industry while also contributing to Pakistan’s efforts to achieve net-zero carbon emissions by 2050.
Arshad also warned of the potential economic consequences if Pakistan were to lose its GSP+ access. He said such a development could affect exports by more than Rs1 trillion annually and potentially result in mill closures and job losses. According to his assessment, the effects would not be limited to textile exporters and could also extend to banking, real estate and transportation because textile companies account for more than 40 percent of outstanding bank loans. He further said disruption of the facility could affect progress related to labour rights, anti-corruption efforts and narcotics-control initiatives.
APTMA Chairman North Asad Shafi said Pakistan’s textile industry had invested billions of dollars in machinery sourced from the European Union as part of its expansion plans. He urged the EU ambassador to support efforts to accelerate negotiations for a Pakistan-EU free trade agreement, citing the India-EU Free Trade Agreement as a reference for a longer-term trade arrangement. Shafi said such an agreement could provide an additional framework for Pakistan’s trade relationship with the European market and help address concerns surrounding the potential expiry of GSP+.
Shafi also briefed the EU delegation on APTMA’s compliance-related initiatives, including the association’s advocacy for a proposed National Compliance Entity. He reaffirmed the textile association’s commitment to addressing compliance gaps as Pakistan prepares for the GSP+ reapplication process. The discussions between APTMA and the EU therefore place greater attention on the reforms and compliance measures that will form part of Pakistan’s efforts to maintain preferential access to the European market after the current GSP+ framework reaches its scheduled 2027 expiry.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.