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Pakistan

Pakistan

As part of the EU’s response to the devastating floods that hit Pakistan, the European Parliament and the Council signed the measures giving emergency autonomous trade preferences for Pakistan on 25 October. This means that certain goods from Pakistan can enter the EU duty free or will be subject to certain ceilings (tariff rate quotas).

The measures enter into force in November 2012 following their publication in the EU's Official Journal and will be in place until 31 December 2013.

In addition to these special measures, Pakistan benefits from preferential access to the EU market under the Generalised Scheme of Preferences scheme.

Trade picture

  • The EU being Pakistan's most important trading partner taking 21.2% of Pakistan's total exports.
  • EU-Pakistan trade increased by almost 4.7% annually between 2007 and 2011.
  • Pakistani exports to the EU are dominated by textiles and clothing as well as leather products. Textiles and clothing account for just under 75% of Pakistan's exports to the EU.
  • Pakistan's imports from the EU mainly comprise mechanical and electrical machinery as well as chemical and pharmaceutical products.

EU-Pakistan "trade in goods" statistics

Trade in goods 2010-2012, € billions
Year EU imports EU exports Balance
2010 3.8 3.7 -0.1
2011 4.6 3.7 -0.8
2012 4.0 4.1 0.2

More statistics on Pakistan

EU and Pakistan

Pakistan in the world economy

  • In recent years, Pakistan has increasingly integrated with the global economy, leading to average real GDP growth rates of 2.7% between 2008 and 2011. In parallel, Pakistan has increased its trade with the rest of the world.
  • However, the wider picture shows that regulatory barriers continue to hold Pakistan back from developing its full trade potential.
  • High costs of doing business, complex regulation and infrastructure bottlenecks all have a detrimental effect on trade and growth.
  • Pakistan's trade regime and regulatory environment still remain comparatively restrictive.

The EU and Pakistan have set up a Sub-Group on Trade to promote the development of two-way trade.

The Sub-Group on Trade - set up under the auspices of the EU-Pakistan Joint Commission - is the forum for discussions on trade policy developments more broadly and also aims to tackle individual market access issues which hamper trade between the two parties.

The EU supports the integration of Pakistan with the global economy by granting Pakistan's exports to the EU reduced tariffs under the EU's Generalised Scheme of Preferences.

  • As a result, more than 78% of Pakistan's exports enter the EU at preferential rates.
  • Around 80% of the textiles and clothing articles imported to the EU from Pakistan enter the EU at a preferential tariff rate. Around a quarter of these imports are bed linen, table linen and toilet and kitchen linen.
  • Textiles and clothing account for around 75% of Pakistan's exports to the EU. Pakistani exports to the EU have increased modestly in terms of value – despite the elimination of quotas, including on imports of Chinese textile and clothing products.

However, relying so heavily on one product category carries risks for Pakistan. Trade diversification programmes have been launched by the EU, to reduce the country's reliance on the textiles and clothing sector.

Trading with Pakistan