Duty-free but rights-bound: Pakistan’s GSP+ compliance gap and cost of ignoring labour standards
Pakistan’s textile and apparel sector, the backbone of its GSP+ export performance, has long struggled with labour rights issues
In the sprawling garment factories of Pakistan, rows of sewing machines hum with the promise of duty-free access to one of the world’s richest markets.
The European Union, through its Generalised Scheme of Preferences Plus (GSP+), granted Pakistan this privileged access in January 2014 in exchange for its commitment to uphold international human rights, labour, environmental and governance standards.
Over a decade later, this arrangement has become a cornerstone of Pakistan’s export economy — in 2024, more than €7 billion of the country’s €8.3 billion in EU imports were tariff-free under GSP+, with apparel accounting for nearly three-quarters of the benefit.
Yet behind this veneer of economic opportunity lies a yawning compliance gap, particularly in the garment sector, where labour rights have been chronically violated and union formation denied.
As Pakistan’s garment exports flourished, its record on core labour standards lagged far behind the commitments it undertook, raising fundamental questions about the government’s seriousness in meeting its own legal obligations.
What GSP+ demands — and what Pakistan has delivered
The GSP+ arrangement is unique among preferential trade schemes. It allows vulnerable developing countries to export to the EU on almost duty-free terms on the condition that they effectively implement 27 international conventions covering human rights, labour rights, environmental protection, and good governance.
Pakistan ratified all these conventions, including the International Labour Organisation’s (ILO) core labour standards on freedom of association and collective bargaining. The expectation was clear — ratification would be followed by effective domestic enforcement.
But a major evaluation of Pakistan’s GSP+ compliance, launched by the International Labour Organisation and Pakistan’s Ministry of Overseas Pakistanis and Human Resource Development in September 2023, identified significant compliance gaps.
The report, discussed at a tripartite forum involving government, employers and workers, acknowledged legislative effort but underscored enforcement weaknesses — especially in labour rights and union access — that undermine Pakistan’s commitments.
The ILO and EU representatives noted that inspection and monitoring remained weak, delaying concrete improvements on the ground.
A garment sector at odds With labour standards
Pakistan’s textile and apparel sector, the backbone of its GSP+ export performance, has long struggled with labour rights issues.
Worker interviews and independent research document widespread denial of trade union rights, precarious employment contracts, excessive working hours and unsafe conditions.
Factories producing for EU markets are often marked by intimidation and administrative pressure against union formation. Despite legal protections on paper, the reality for garment workers remains one of constrained agency.
Trade union organisers have reported systematic obstacles to registering unions in export-oriented factories. Workers seeking to affiliate or bargain collectively face non-transparent procedures, employer influence over union certification, and bureaucratic delay.
These practices run counter to Pakistan’s obligations under the ILO conventions it has ratified, including Convention No. 87 on Freedom of Association and Convention No. 98 on the Right to Organise and Collective Bargaining.
Labour inspectors, nominally responsible for enforcing standards, are outnumbered and under-resourced. Their reports routinely cite violations of working hours, wage laws and safety requirements — yet follow-up enforcement actions are sporadic at best.
In many factories, persistent non-compliance goes unchecked, particularly in smaller subcontracting facilities outside Karachi and Lahore, where oversight is weakest.
Persistent violations draw EU scrutiny
While Pakistan has benefited from rising exports under GSP+, the European Union’s own documents caution that compliance with human rights and labour conventions “needs improvement.”
An EU Staff Working Document noted violations, including weak trade union rights and poor enforcement of labour laws, as part of a broader assessment of Pakistan’s GSP+ performance.
This assessment was serious enough for Brussels to initiate a process for possible temporary withdrawal of Pakistan’s GSP+ status — the first time such a threat has been openly discussed in relation to labour rights obligations.
The stakes are high — any suspension of GSP+ could sharply increase costs for textile exporters, erode competitiveness in the EU market, and slow growth in an industry that employs millions.
Yet this very economic leverage highlights a central paradox of the GSP+ system — Pakistan’s export success has outpaced its institutional capacity to ensure labour rights on the factory floor.
Workers’ rights vs. export imperatives
Pakistan’s reluctance to confront labour rights gaps is tied to broader political and economic pressures. The garment industry, a major employer in Punjab and Sindh, operates at narrow margins and is highly sensitive to global price competition.
Employers and government alike prioritise production continuity over compliance costs, often framing labour standards as impediments rather than obligations.
Moreover, union organisers and activists face an environment where mobilising workers can lead to harassment or dismissal. In some cases, authorities treat union activity with distrust, conflating it with industrial disruption rather than a legitimate exercise of internationally recognised rights.
These dynamics not only undermine compliance with GSP+ labour conventions but also burden workers with limited avenues for advocacy or redress.
The 2025 review and mounting pressure
In late 2025, the European Union launched a periodic assessment of Pakistan’s compliance with the full slate of GSP+ conventions, including labour standards.
This review, postponed earlier in the year due to geopolitical tensions, involved engagement with government institutions, civil society and worker representatives.
The monitoring mission reflects heightened EU concerns — not only about labour rights but also broader human rights violations in Pakistan, including entrenched discriminatory practices and misuse of legal systems against vulnerable groups.
Critics within the EU and international human rights community have argued that Pakistan’s repeated failure to translate legal commitments into enforcement warrants consideration of the temporary suspension of GSP+ benefits.
These calls are rooted in a broader interpretation of compliance that goes beyond ratification to examine tangible implementation.
Economic growth and human rights: A floral cover on fading standards
Pakistan’s utilisation rate of GSP+ preferences on exports to the EU has remained among the highest globally, often exceeding 90 percent.
This statistic reflects the country’s economic integration into European supply chains, particularly in the garment sector. Yet the very foundations of this success — preferential tariffs granted in exchange for labour and human rights commitments — expose a compliance gap that has persisted for years.
As apparel exports surged, labour standards lagged. The result is an export economy that thrives while worker rights stagnate.
The mismatch between economic performance and rights protection underlines a broader governance failure: textile growth has not been accompanied by strengthened institutions to protect workers or enforce international conventions effectively.
A credibility test for Pakistan’s global commitments
The GSP+ compliance gap does not merely reflect administrative weak points; it casts a long shadow over Pakistan’s international commitments.
For a country that prizes access to European markets and relies heavily on textile exports, the divergence between ratified conventions and lived reality raises compelling questions about the credibility of its trade and human rights agenda.
The EU’s increasing scrutiny, including threatened suspension of GSP+ benefits, signals that preferential access must be matched by genuine compliance.
Pakistan’s garment industry — thriving in export volumes but deficient in labour rights enforcement — illustrates a broader challenge where economic incentives have outrun institutional reform.
In the end, Pakistan’s GSP+ experiment stands at a crossroads — continued economic engagement with Europe, or a reckoning over unmet obligations that have allowed labour rights to be sidelined in pursuit of export growth.
