Finance Minister Muhammad Aurangzeb Reaffirms Economic Cooperation
ISLAMABAD: Finance Minister Muhammad Aurangzeb has assured European Union (EU) businesses in Pakistan of the government’s full support, particularly in facilitating their operations and ensuring the timely repatriation of dividends and profits. This commitment was reaffirmed during his meeting with EU Ambassador Riina Kionka in Islamabad on Friday, as reported by Radio Pakistan.
The minister acknowledged the EU’s vital role in Pakistan’s economic landscape and stressed the importance of strengthening bilateral trade and investment ties. He also highlighted the significance of the GSP+ (Generalised Scheme of Preferences Plus) facility, which has been instrumental in boosting Pakistan’s exports to European countries.
Pakistan’s Growing Exports to the EU
Pakistan’s trade with the EU has witnessed positive growth, with exports rising by 8.62% in the first five months of FY25. According to the State Bank of Pakistan (SBP), exports to the EU reached $3.866 billion in the July-November period, up from $3.559 billion in the same period last year.
Key Factors Behind Export Growth:
- Increased textile and apparel shipments to western markets.
- Enhanced market access through the GSP+ scheme.
- Expanding trade partnerships with European nations.
The EU remains Pakistan’s second-largest trading partner, making its support crucial for sustaining the country’s export-led growth.
GSP+ Status and Its Impact on Pakistan’s Economy
The GSP+ status allows Pakistani exports to enter the EU with duty-free or reduced tariff access, making it a key driver of economic growth. However, the scheme requires Pakistan to show tangible progress on 27 international conventions, covering:
- Human rights and labour rights
- Environmental protection and climate change
- Good governance and transparency
Aurangzeb reaffirmed Pakistan’s commitment to meeting these obligations, ensuring that trade relations with the EU remain strong.
EU Sees Pakistan as an Emerging Business Hub
EU Ambassador Riina Kionka noted that European companies are increasingly viewing Pakistan as a strategic market for investments. She emphasized the need for a stable business climate, where international firms can operate with confidence and benefit from policy continuity.
Pakistan aims to strengthen investor confidence by:
- Improving the ease of doing business.
- Ensuring timely profit repatriation for foreign companies.
- Expanding bilateral trade agreements with European nations.
Both sides reaffirmed their commitment to fostering a thriving and mutually beneficial economic environment for businesses in Pakistan and the EU.
5 FAQs About Pakistan-EU Trade Relations
1. What is the GSP+ status, and why is it important for Pakistan?
GSP+ (Generalised Scheme of Preferences Plus) allows duty-free or reduced tariff access for Pakistani exports to the European Union, helping boost trade and economic growth.
2. How much have Pakistan’s exports to the EU grown in FY25?
Exports to the EU grew by 8.62% in the first five months of FY25, reaching $3.866 billion from $3.559 billion in the previous year.
3. What commitments does Pakistan need to fulfill to maintain GSP+ status?
Pakistan must ensure compliance with 27 international conventions, covering human rights, labour laws, environmental protection, and good governance.
4. How does Pakistan plan to support EU businesses?
The government is committed to facilitating EU businesses, ensuring profit repatriation, improving the business climate, and strengthening trade ties.
5. What are the future prospects for Pakistan-EU trade relations?
With increased European investment interest, Pakistan is set to enhance bilateral trade, expand business opportunities, and maintain GSP+ benefits through continued reforms.
