Wajahat Abbas
The bilateral relations between Pakistan and European Union have great significance based on mutual interests since 1974. The diplomatic relations were officially elevated to a higher plane in year 2004, when Pakistan and the EU signed the “Cooperation Agreement on Partnerships and Development”. High level meetings between the EU and Pakistan were subsequently held in the years 2009, 2010 and 2012 respectively. In the year 2012 a new political framework including cooperation in different areas such as counter terrorism, trade, development, energy, human rights and democracy were endorsed by both sides under the ‘Five Year Engagement Plan’. In the wake of the Strategic Dialogue between Pakistan and the EU, Pakistan was included in the European Union’s Generalized Scheme of Preferences Plus (GSP+) starting from January 2014, to boost trade between the two entities, as well as to contribute to the reduction of poverty, promotion of peace, sustainable development and good governance.
The European Union also supports Pakistan’s economic reform agenda in consultation with the international financial institutions through, bilateral trade, promoting direct investment, strengthening institution building and protecting human rights and as well as implementation of international labor standards.
The European Union is Pakistan’s most important and largest trading partner accounting for 21.2 percent of Pakistan total exports and 16 percent of its total imports. The volume of trade between Pakistan and the EU has reached 10 billion U.S. dollars, where Pakistan’s export to EU states are dominated by textiles and clothing as well as leather products, while Pakistan imports from the EU comprises of mechanical and electrical machinery as well as chemical and pharmaceutical products. The EU and Pakistan are closely working on promoting the development of two way trade through bilateral discussions on the trade policy development and dealing with individual market access issues. There are a total of around 2.2 million Pakistani citizens living in the 28 member states of the EU, who send back a sizable, constantly growing amount of money to their homeland. Between the year 2017 and 2018 remittances from EU countries amounted to over 62 Million U.S. Dollars. furthermore, Under the GSP Plus status where, Pakistan enjoys zero percent tariffs on the majority of its export to EU member countries, which Pakistan has enormously benefitted from as it can now successfully compete with products from Bangladesh, Vietnam, Turkey and Morocco etc. Pakistan’s qualification as a GSP+ beneficiary has helped to increase exports by over 1 Billion U.S. Dollars.
The status also offers Pakistan an opportunity to make progress on working conditions, labor rights and gender equity. The EU has become one of Pakistan’s largest trading partners, between the year 2014 and 2015, where 20 percent of Pakistan’s total exports entered the 11 European Union members. The top five EU countries that received imports from Pakistan were the United Kingdom, Germany, France, Spain and Italy. In the year 2014, Pakistan was able to export 8.1 billion U.S. Dollars’ worth of goods to the 12 EU countries, of which 94 percent were covered by GSP+. The special status has also provided the country with a greater potential to attract investment and generate employment as well. While clothes and textiles have already greatly benefitted from the preference scheme whereas, smaller sectors also have the potential to expand through GSP+.
The focus of the activities of the European Union in Pakistan has remained on poverty reduction through rural development, natural resource management, research, education and human resource development. The European Union also provided humanitarian assistance to flood victims in the years 2010, 2011 and 2012 respectively. Along with its member countries, the EU provides Pakistan with about 700 Million EUR per year, as well as further 900 Million EUR for development and humanitarian assistance to finance the mentioned causes. The EU has been contributing to the development of Pakistan by providing education to students under the Erasmus+ scholarship programme, as well as by including the country in their Horizon – 2020 research and innovation programme. Horizon – 2020 is the European Union’s biggest Research and Innovation program with nearly 80 Billion EUR for seven years from 2014 to 2020. It allows participants to promote joint venture of scientific projects through mutual collaboration with EU science and technology partners. The program offers vast opportunities for Pakistan focusing on acute challenges. Moreover, it will enhance the incorporation of Pakistan in the world economy through diversified and high quality delivery of products and services, thus will create new employment opportunities.
The European Union and Pakistan aims to fight mutually against poverty and towards inclusive and sustainable growth through the prism of political stability, improved rule of law, human and social development, productive and exploiting opportunities to achieve stable economy. Following are some of the recommendations which can further enhance for improved cooperation;
The focused areas of cooperation such as education, energy, health sector should be prioritized within realistic timelines for sustainable attainment of short and long term goals
The EU – Pakistan should collaborate on mutual grounds to improve further bilateral relations because the institutional structure of EU limits enhancing political and strategic relations with non EU members but it can play role within its institutional structure to initiate cooperation in other areas to expand existing trade relations
EU and Pakistan can play a pivotal role in bringing stability in the region and especially focusing on Afghanistan through socio-economic development, mitigating terrorism, educational reforms, poverty reduction and humanitarian assistance
Maintaining the balance of power in the region is very important aspect, therefore, the regional issues should be highlighted in the actual picture and need to be resolved on mutual understanding
Terrorism and poverty reduction are the core focused issues in Pakistan, where EU can help in this regard through educational endeavors to further boost the bilateral relations between two countries
There is a need to understand the nature of functional structure and limitations of Pakistan and EU to realistically collaborate on the focused areas of cooperation
The EU – Pakistan should develop joint research & development programs and technological exchanges by linking educational institutes
China Pakistan Economic Corridor holds key strategic position and would be a transforming bridge by connecting EU to China and beyond for trade and commerce
Pakistan and European Union should focus on developing strategic partnership by initiating institutional process, which will also help promoting regional stability and mitigating extremism and terrorism
Pakistan can hold promotional exhibitions in different EU member countries to raise awareness about Pakistani traditions, culture and innovative products
The mutual adoption of the ‘five year engagement plan’ aimed for advancing the civilian institutions and civil society as well as the commitment to start strategic dialogue with Pakistan. The relationship between Pakistan and the European Union has been dominated by trade relations. However, the EU is seeking to work side by side by helping to strengthen the role of Pakistan’s dynamic civil society. The emphasis is also on supporting and strengthening of democratic institutions and the electoral framework, with particular focus on institution building, legislative reform and voter participation. Despite the regular growth of relations in past years, Pakistan needs to enhance its diplomatic, economic and security ties in European region vis-a-vis to enhance bilateral relations based on mutual consensus.
The author is a Research Associate at the Center for Global & Strategic Studies (CGSS), a think tank based in Islamabad with
mission to help improve policy and decision-making through analysis and research. He holds a Master’s degree in Development Studies.
