A vote by the European Parliament today (12 December) to allow preferential market access to the European Union (EU) for a group of developing countries has finally granted Pakistan its long-awaited GSP+ status.

The voted overwhelmingly defeated a resolution objecting to the European Commission's proposal to grant GSP+ to ten countries including Pakistan. The resolution was defeated by 409 votes against, while 182 voted in favour.

GSP+ will now become effective from 1 January 2014 for Pakistan, which already benefits from reduced tariffs under the overall GSP scheme. With the new status, Pakistani companies are expected to benefit from zero tariffs on all products exported to the EU. 

"This is a very good day for EU-Pakistan relations," said Lars-Gunnar Wigemar, the EU Ambassador to Pakistan. "The granting of GSP+ shows the importance the European Union attaches to its relations with Pakistan. We have listened to Pakistan's plea for more trade and not just aid.

"In addition to expanding and facilitating Pakistan's trade with the European Union, GSP+ will also promote economic growth and create much needed jobs across Pakistan.

"EU consumers will benefit as well from cheaper imports made in Pakistan. The textile industry is an obvious winner, but we should work together to ensure that other sectors of Pakistan's economy will benefit too.

"It is now up to the Pakistani business community to take full advantage of the opportunities offered. This will require improvements in the business climate in Pakistan, including access to energy."

Other countries who will benefit from GSP+ are Armenia, Bolivia, Cape Verde, Costa Rica, Ecuador, Georgia, Mongolia, Paraguay and Peru - but it is Pakistan that has caused most concern among EU textile and clothing companies.

Industry group Euratex had strongly opposed the move, arguing that it did not allow an effective assessment of each country’s individual application.

In particular, it said that Pakistan’s application did not fulfil the necessary conditions, citing its “extremely poor” record on women’s and children’s rights, and on respecting religious minorities.

A preliminary estimate from the European Commission suggests exports from Pakistan - including textiles, clothing and leather - will increase by EUR574m a year as a result of the reduction of tariffs on more than 90% of all products exported by Pakistan to the EU. 

The Pakistani textile industry estimates that exports to the EU of textiles and clothing alone under GSP+ will increase by US$650m in the first year. 

In 2012, the EU and Pakistan adopted a five-year Engagement Plan and launched a 'Strategic Dialogue' covering a wide range of issues from security, including counter- terrorism, non-proliferation and regional cooperation, to human rights, migration and development cooperation. 

Under the GSP+ regime, Pakistan must implement commitments under international human rights, labour rights and environment and good governance conventions.