Pakistan faces a credible risk of losing its duty-free access to the European Union (EU) market under the Generalised Scheme of Preferences Plus (GSP+), with a senior parliamentary official warning that deteriorating human rights conditions could jeopardise the country's most critical trade lifeline. Syed Naveed Qamar, Chairman of the National Assembly Standing Committee on Finance and a former finance and commerce minister, sounded the alarm while chairing the committee, even as the government separately insisted no immediate threat existed.

The Warning From Parliament

'We are getting signals that the GSP+ status is in the doldrums because of human rights issues,' Qamar said during the committee session. His remarks stand in sharp contrast to the government's public reassurances, exposing a disconnect between official messaging and ground-level parliamentary assessment. The statement was reported by the Karachi-based Express Tribune.

What the EU Monitoring Report Found

The latest EU monitoring report on the GSP+ scheme — the fifth of its kind — documented widespread human rights and fundamental rights violations, a weakening judicial system, and curbs on freedom of expression across beneficiary countries, including Pakistan. It specifically noted that Pakistan has regressed in several areas during the 2023–2025 monitoring period, with positive change described as limited. The report called for amendments or repeal of laws on blasphemy, cybercrime (including PECA), defamation, counterterrorism, and sedition. Notably, it underlined the need for robust steps to reverse negative trends on enforced disappearances and freedom of expression.

What Is at Stake for Pakistan

Pakistan was the top beneficiary of the EU's GSP+ trade scheme in 2024, recording 7.5 billion euros in exports to the bloc under preferential tariffs. The current scheme runs until December 2028. Minister of State for Finance and Revenue Bilal Kayani told the committee that a deputy prime minister-led committee is already preparing an application to qualify for the new scheme from January 2029. Critics, however, argue that the application process is meaningless unless underlying human rights concerns are addressed substantively.

EU's Revised Priorities From 2027

Under revised GSP rules taking effect from 2027, the EU has outlined key priorities for future engagement: accountability for human rights violations, intensified efforts against torture, reforms in prison conditions and capital punishment, and reversing negative developments on enforced disappearances and freedom of expression. These benchmarks represent a significantly raised bar for Pakistan's continued preferential access.

The Broader Economic Context

The GSP+ trade status is structurally vital for Pakistan, which has been unable to achieve meaningful export diversification or growth despite decades of tariff protection and fiscal incentives for exporters. Loss of preferential access would directly expose Pakistani goods — particularly textiles — to standard EU tariffs, sharply eroding their price competitiveness. This comes amid Pakistan's ongoing macroeconomic fragility, making the trade stakes even higher. How the government navigates the gap between its diplomatic assurances and the parliamentary warnings will be closely watched in coming months.