Declining European Export Receipts Highlight Need to Protect GSP+ and Cut Costs Mian Zahid Hussain
The business leader urges coordinated action to protect Pakistan’s EU market access, improve export competitiveness and address rising production and shipping costs.
GSP+ Access remains vital for Pakistan as exporters face declining receipts from European markets.
Mian Zahid Hussain, President of the Pakistan Businessmen and Intellectuals Forum (PBIF) and All Karachi Industrial Alliance (AKIA), has expressed concern over declining export receipts from key European markets. He stressed that protecting Pakistan’s preferential access to the European Union under the GSP+ scheme must remain a national economic priority.
He urged the Ministry of Commerce to work closely with exporters. The ministry should develop market-specific strategies and identify products facing declining receipts.
European Export Receipts Show Decline
Citing the State Bank of Pakistan’s October 2026 Monthly Export Receipts Report, Hussain said Pakistan’s merchandise export receipts from Europe fell 1.84% year on year to $2.35 billion during July–September 2026.
Receipts from Western Europe declined 8.51%, while Eastern Europe recorded a 15.05% drop. Several major markets also reported lower receipts. Germany fell 12.77%, Italy 8.49%, Belgium 7.57% and the Netherlands 3.07%.
Hussain called on the Ministry of Commerce to examine the decline by product and market. He said the government should work with exporters to address buyers’ concerns about prices, quality and delivery schedules.
Shipping and Production Costs Weaken Competitiveness
Hussain attributed additional pressure on exporters to disruptions in international trade routes. He said the reported US–Iran conflict and closures affecting the Strait of Hormuz and Bab el-Mandeb had increased freight and insurance costs. These disruptions had also extended shipping times from Pakistan to Europe.
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He added that textile exporters faced rising production and raw material costs, further weakening their competitiveness.
However, he welcomed Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry’s October 8 announcement about the restoration of Mediterranean Shipping Company’s (MSC) weekly Premium I-Pak service.
The service connects Karachi with major European destinations. Hussain said its continuation could help exporters reduce freight costs and meet delivery deadlines.
GSP+ Preferences Remain Critical for Pakistan
Hussain said Pakistan’s access to GSP+ preferences provides a significant advantage in the European market. According to the European Commission, €7.5 billion worth of Pakistani exports qualified for GSP+ preferences in 2024. The estimated tariff savings reached €732 million.
He warned that any disruption to these preferences could affect textile and apparel orders, industrial employment and foreign exchange earnings.
The European Commission’s July 2026 assessment of Pakistan’s GSP+ implementation for 2023–2025 raised concerns about progress in several areas. These included freedom of expression, minority protection and efforts to prevent forced and child labour.
Hussain urged federal and provincial authorities to demonstrate measurable progress in implementing the 32 international conventions linked to GSP+. He said Pakistan must prepare a strong case for continued preferences under the next phase of the scheme.
EU–India Trade Deal Raises Competitive Pressure
Hussain also highlighted the competitive challenge posed by the EU–India Free Trade Agreement. The two sides concluded negotiations in January 2026. In September, the European Commission submitted proposals to the Council for the agreement’s signature and conclusion.
He warned that once the agreement enters into force, Indian textile and apparel exporters could gain improved access to European markets. This may narrow Pakistan’s existing tariff advantage in products where both countries compete for the same buyers.
He said any disruption to Pakistan’s GSP+ preferences during this period would make it harder for local exporters to retain existing orders and secure new business.
Business Leaders Call for Coordinated Action
Hussain urged the Ministry of Commerce, Ministry of Foreign Affairs, provincial governments, FPCCI and business community to coordinate their efforts.
He called for practical measures to reduce production and shipping costs. He also stressed the need to help small and medium-sized exporters access testing laboratories recognised by European buyers.
Furthermore, exporters should improve raw material origin documentation and meet international environmental and labour standards.
He said protecting GSP+ access and improving export competitiveness required sustained cooperation between the government and the private sector.
