ISLAMABAD: Prime Minister Shehbaz Sharif on Thursday stressed the critical role of the Generalized Scheme of Preferences (GSP) Plus in enhancing trade with the European Union (EU), as Islamabad reviews the implications of India’s free trade deal with Europe. 

India and the EU confirmed this week that they had agreed to a new free trade deal that grants Indian exporters sweeping tariff-free access to the EU. Pakistan’s foreign office said Islamabad is aware of the agreement and will continue to view its trade relationship with the EU as mutually beneficial. 

Pakistani financial analysts and exporters have voiced concerns that the deal may erode its tariff advantage under the GSP Plus, which allows duty-free access for many Pakistani exports to the EU in return for commitments on labor rights, human rights and governance.

Sharif met EU’s Ambassador to Pakistan Raimundas Karoblis at the Prime Minister’s House to discuss bilateral ties, trade, investment and other areas of interest between the two sides.

 “The Prime Minister emphasized upon the critical role of the GSP Plus scheme in enhancing trade between Pakistan and the EU,” Sharif’s office said in a statement. 

“And said the Government of Pakistan is committed to working closely with the EU on mutually beneficial trade enhancement initiatives, especially through the GSP Plus.”

The Pakistani premier reaffirmed Islamabad’s commitment to further strengthen cooperation with the EU in all areas of mutual interest, particularly trade, investment, development, security, migration and climate change.

Karoblis assured Sharif he would continue to work to strengthen Pakistan-EU relations across all spheres. He said the EU would continue to engage closely with Pakistan on enhancing trade under the GSP Plus and through trade promotion activities.

Under GSP Plus scheme, Pakistan currently enjoys duty-free access on around 66% of EU tariff lines, while Indian textile and apparel products previously faced duties of up to 12%.

The shift comes at a fragile moment for Pakistan’s exports. After rising 5% to $32.1 billion last fiscal year, exports fell 9% to $15.2 billion in the first half of the current year through December, according to Pakistan Bureau of Statistics data.