THE European Union’s Generalised Scheme of Preferences Plus (GSP+) is a special incentive arrangement for sustainable development and good governance that supports vulnerable developing countries.
Pakistan has GSP+ status since January 2014 and can benefit from preferential access to the European market. In compliance with GSP regulations, Pakistan has ratified all 27 core international conventions on human rights, labour standards, environmental protection and good governance. Total EU imports from Pakistan amounted to €6.6 billion in 2021, of which €4.7bn benefited from GSP+ tariffs. This makes Pakistan the largest beneficiary among all GSP+ beneficiary countries. However, exports to EU have dipped by over 4.41 per cent in FY23 due to a slump in demand for Pakistani goods in Germany and Netherlands.
Pakistan’s most important export products are trousers, linen, t-shirts, and pullovers made from cotton, but also medical instruments and appliances. Rice is the main agricultural product for export. The top export destinations for Pakistan are Germany, the Netherlands, Spain, Italy, and Belgium.
The monitoring priorities for getting the GSP+ incentives include (1) Human rights (2) Labour rights (3) Environmental protection and (4) Good governance. EU is considering extending the current GSP+ for Pakistan and other countries until 2027 with the same regulations.
Federal labour laws are obsolete.
Pakistan has been an active member of the International Labour Organisation (ILO) since 1947 and has ratified 36 ILO conventions, including eight out of 10 fundamental conventions and two governance conventions. This includes Freedom of Association and Protection of the Right to Organise Convention, 1948 (No 87) and Right to Organise and Collective Bargaining Convention, 1949 (No 98). However, Pakistan’s record of compliance with international labour standards remains a challenge, specifically in the context of these two conventions.
The ILO’s Committee of Experts on the Application of Conventions and Recommendations (CEACR) identifies where Pakistan’s labour laws are not in compliance with one or both of the two conventions. It also notes the persistence of this non-compliance across several years and through multiple labour law reform processes.
The CEACR has carried out detailed analysis of all the provisions of the [Federal] Industrial Relations Act, 2012. Following the devolution of labour laws by virtue of the 18th Amendment in April 2010, the federal government has not made any amendments in the labour laws falling within its domain, aside from the 2012 law.
The CEACR has recommended comprehensive changes to the law, to bring it in conformity with the requirements of ILO’s constitution. Mostly, the existing provisions of the federal and provincial acts are based on the Industrial Relations Ordinance, 1969, considered by all stakeholders as one of the best labour legislations promulgated in Pakistan. Following are some of the CEACR’s key recommendations:
(a) Many categories of workers remain outside the scope of the act. Excluding the police, armed forces and public servants engaged in the administration of the state, workers in other categories should be allowed to enjoy their rights under the convention.
(b) The act permits employers to ban managerial employees from joining organisations of their own choosing. Senior managerial employees should be enabled to establish and join organisations that can adequately defend their occupational interests.
(c) Federal and provincial legislations should be amended so that all agricultural and fisheries workers, whether in the formal or informal sector, enjoy the rights conferred by the convention.
(d) Ensure that workers can join trade unions at the national and branch level as well as the enterprise level at the same time.
(e) Unions other than the Collective Bargaining Agent, named by the CEACR as “minority unions” in an establishment, should be provided with the essential means of defending their members’ occupational interests.
(f) Repeal Section 27 B of the Banking Companies Ordinance 1962, to enable workers in the banking sector to exercise trade union activities.
(g) Ensure the mandate and role of other elected forums — ie shop stewards, works council, management committee and the joint management board — constituted under the act, is sharply distinguished from that of trade unions.
In addition, there are 22 recommendations of the CEACR on which Pakistan is required to submit a report to ILO by February 2026 and to the EU by 2027. The government has committed to doing so in consultation with the tripartite constituents.
It appears an uphill task for the government, which has allowed federal labour laws to become obsolete since devolution in 2010.