Pakistan's Europe exports stagnate despite GSP+ access in FY26
Synopsis
Despite duty-free access under the EU's GSP+ scheme, Pakistan's European exports have barely moved in the first nine months of FY26 — rising less than 1% to $6.86 billion. Western Europe is contracting, the UK is flat, and only southern and eastern Europe show any life, exposing the limits of tariff preferences when demand is weak and supply-side constraints persist.
Key Takeaways
Pakistan's total exports to Europe reached $6.86 billion in 9MFY26 , up just 0.94 per cent year-on-year.
Western Europe exports fell 3.14 per cent to $3.30 billion ; northern Europe declined 0.85 per cent to $557.31 million .
Key market declines: Germany (-2.97% to $1.24 billion), Netherlands (-1.78% to $1.1 billion), France (-2.62% to $411.89 million), Belgium (-4.73% to $402.86 million).
Southern Europe rose 6.47 per cent to $2.43 billion , led by Spain (+7.44%) and Italy (+4.26%).
UK exports slipped 0.23 per cent to $1.62 billion ; effectively flat.
Pakistan's EU exports had declined 3.12 per cent in FY24 despite GSP+ access, raising questions about the scheme's structural impact.
Pakistan's exports to Europe have stagnated in the first nine months of fiscal year 2025–26, failing to capitalise on the country's continued access to the European Union's Generalised Scheme of Preferences Plus (GSP+), according to data compiled by the State Bank of Pakistan and reported by Pakistan Today. Total exports to European markets reached $6.86 billion in the period, a marginal rise of just 0.94 per cent from $6.79 billion in the same period last year.
Western and Northern Europe See Declines
The sharpest disappointment came from western Europe, where exports declined by 3.14 per cent to $3.30 billion from $3.41 billion a year earlier. Northern Europe also contracted, falling 0.85 per cent to $557.31 million from $562.13 million.
Among individual western European markets, exports to Germany — Pakistan's largest European destination — fell 2.97 per cent to $1.24 billion. Shipments to the Netherlands dropped 1.78 per cent to $1.1 billion, to France by 2.62 per cent to $411.89 million, and to Belgium by 4.73 per cent to $402.86 million. The report attributed the broad-based weakness to slowing demand across key western and northern European markets.
Southern and Eastern Europe Offer Partial Offset
Not all European sub-regions told the same story. Exports to southern Europe rose 6.47 per cent to $2.43 billion from $2.28 billion, providing a partial cushion. Eastern Europe also posted gains, climbing 5.06 per cent to $566.92 million from $539.63 million.
Within southern Europe, Spain led the uptick with a 7.44 per cent jump to $1.18 billion, while Italy grew 4.26 per cent to $880.13 million. Greece, however, bucked the regional trend, declining 8.44 per cent to $98.16 million.
UK Trade Broadly Flat
Exports to the United Kingdom — a separate market post-Brexit — remained essentially unchanged, slipping a negligible 0.23 per cent to $1.62 billion in the first nine months of FY26 compared to the same period a year earlier.
GSP+ Yet to Deliver Consistent Gains
The GSP+ scheme, which grants Pakistan preferential zero or reduced tariff access to EU markets in exchange for commitments on human rights, labour standards, and governance, was designed to boost export competitiveness. However, the latest data underscores that tariff preferences alone have not been sufficient to sustain export momentum. Notably, in FY24, Pakistan's exports to the EU declined by 3.12 per cent despite GSP+ access, before recovering 7.44 per cent in the previous fiscal year to $8.86 billion from $8.24 billion. The current stagnation suggests structural supply-side constraints and softening European demand are offsetting any tariff advantage. How Islamabad responds — whether through product diversification or deeper compliance with GSP+ conditionalities — will shape the trajectory of these trade flows in the months ahead.
Point of View
Combined with outright declines in the bloc's largest economies, suggests that preferential tariffs are being negated by weak European demand and Pakistan's own supply-side rigidities, including a narrow export basket dominated by textiles. The FY24 decline despite GSP+ access was a warning sign; the current stagnation confirms a pattern. Without product diversification and compliance credibility, Pakistan risks losing even its preferential edge if EU reviewers tighten conditionality assessments.
NationPress
1 May 2026
Frequently Asked Questions
What is the EU's GSP+ scheme and how does Pakistan benefit?
The GSP+ is a European Union trade programme that grants eligible countries zero or reduced tariffs on exports in exchange for commitments on human rights, labour standards, and governance. Pakistan has access to GSP+, which covers a significant portion of its textile and apparel exports to Europe.
How much did Pakistan export to Europe in the first nine months of FY26?
Pakistan's exports to European markets totalled $6.86 billion in the first nine months of FY2025–26, a marginal increase of 0.94 per cent from $6.79 billion in the same period a year earlier, according to State Bank of Pakistan data.
Which European countries saw the biggest decline in Pakistani exports?
Belgium recorded the steepest fall at 4.73 per cent to $402.86 million, followed by Germany at 2.97 per cent to $1.24 billion, France at 2.62 per cent to $411.89 million, and the Netherlands at 1.78 per cent to $1.1 billion.
Were there any bright spots in Pakistan's European export performance?
Yes — southern and eastern Europe performed better. Spain grew 7.44 per cent to $1.18 billion and Italy rose 4.26 per cent to $880.13 million, while eastern Europe as a whole gained 5.06 per cent to $566.92 million.
Has GSP+ consistently helped Pakistan's EU exports?
Not consistently. Pakistan's EU exports declined 3.12 per cent in FY24 despite GSP+ access, recovered 7.44 per cent in the previous fiscal year, and have now stagnated again in 9MFY26, suggesting structural factors beyond tariff preferences are at play.
