The European Institute for Asian Studies (EIAS) recently conducted an assessment of the EU’s GSP+ (Generalised Scheme of Preferences – ‘GSP+’) status in different sectors of the Pakistani economy to assess how the country was complying with its implementation. As a matter of facts, Pakistan is a major beneficiary of the EU’s program, which has been in place since January 2014 and is aimed at supporting sustainable development and good governance in the country. As a result of its GSP+ status, more than 78% of Pakistan’s exports enter the EU market at preferential rates.
The EIAS report was published in a concept note titled “Addressing the EU’s GSP+ Dilemma – An assessment of Pakistan’s GSP+ status”. Meant to support Islamabad’s efforts of uplifting the most deprived from poverty, the GSP+ scheme is supposed to incentivize social and environmental conditions. The EU consistently monitors the compliance by focusing on the situation of bonded labour and protection of children and women’s rights in Pakistan. The findings of the concept highlighted that benefits of GSP+ status to Pakistan were pocketed by the business elite and feudal landlords (Zamindars), without any improvement in labour working conditions or wage increases. It also noted that working conditions and the protection of children and women’s rights had not improved much in Pakistan. Furthermore, the landlords also charge rent for the workers and their families who stay in their properties in spite of meagre salaries. According to some reports, the elite even siphoned the benefits of the scheme to offshore bank accounts.
Under the EU’s GSP+, Pakistan benefited mainly through exports of clothing and textiles to the EU market, which otherwise face tough competitions from garment manufacturers in the region like Bangladesh, Sri Lanka, etc. Despite being officially outlawed, bonded labour arrangements (debt slavery) continue to be widespread in Pakistan, especially in rural areas, denying workers even opportunities for education and employment. Pakistan’s illiterate, an estimated 60 million who live in rural areas, have suffered the most and had no other option but to work at minuscule wages for local landlords.
Despite the EU extending GSP+ benefits, they were ‘trapped in a downward spiral of rising debt, and an estimated 3 million people in Pakistan effectively live as indentured servants’, stated the assessment report. Even in urban manufacturing centres like Sialkot, where about 70% of global football manufacturing takes place, many workers still earn below the standard minimum wage. According to the workers’ rights group Labour Qaumi Movement, so far barely 10% of the workforce have actually received social security cards, even though the GSP+ conditionalities require all workers to receive it. Women and children are part of the most vulnerable groups in Pakistan and are often being exploited and subjected to human trafficking. They are also forced to work under inhumane and bonded labour conditions and face a great risk of sexual violence. There are currently over 2 million child labourers in Pakistan.
The EU report noted that law enforcement remains very weak, particularly outside densely populated Punjab province. Although a great number of laws and regulations already exist or have been introduced, they have not implemented, let alone enforced. These observations gain significance as the GSP+ scheme is currently under review for 2024-2034, since the current one expires at the end of next year. Despite claims made by Islamabad on the progress in implementing the laws related to human rights, EU delegations found it otherwise during their various field visits. In the unskilled, labour-intensive industries such as leather, carpet, aquaculture and food-processing, construction and kilns industries, workers faced increased vulnerability. According to the Pakistan Workers Confederation (PWC), the country is in a “state of near non-implementation” with regard to many of the International Labour Organization (ILO)’s core labour conventions. Pakistan has yet to ratify, inter alia, the ILO’s 1970 Minimum Wage Fixing Convention.
The country’s NGOs, academics, trade unions and civil-society groups continue to be critical of compliances on even very basic principles on which the GSP+ status has been granted by the EU. However, despite the lack of compliance, the EU has not suspended the GSP+ scheme and the related benefits.