PAKISTAN'S TRADE RELATIONS WITH THE EUROPEAN UNION: A STUDY OF TRADE AGREEMENTS, TARIFFS, AND NON-TARIFF BARRIERS

Abstract

Pakistan's trade relations with the European Union (EU) have evolved significantly over the decades, with the EU emerging as one of Pakistan's largest trading partners. This study examines the dynamics of this relationship, focusing on the impact of trade agreements, tariffs, and non-tariff barriers (NTBs) on bilateral trade. The research highlights the EU's role in promoting trade liberalization through preferential trade agreements, such as the Generalized System of Preferences (GSP+), which has provided Pakistan with tariff concessions to enhance its export competitiveness. However, the benefits of these agreements are often offset by the persistence of non-tariff barriers, which include regulatory standards, licensing requirements, and technical barriers to trade. Using a mixed-methods approach, this study analyzes trade data, policy documents, and stakeholder interviews to assess the effectiveness of EU-Pakistan trade agreements in reducing tariffs and addressing NTBs. The findings reveal that while tariff reductions have facilitated increased exports of Pakistani textiles, garments, and agricultural products to the EU, non-tariff barriers remain a significant obstacle. These barriers increase the cost of compliance for Pakistani exporters, limit market access, and hinder the full realization of trade potential. The study also explores the asymmetries in the trade relationship, emphasizing the need for Pakistan to align its regulatory frameworks with EU standards to overcome NTBs. It concludes with policy recommendations, including capacity-building initiatives for exporters, harmonization of product standards, and enhanced bilateral dialogue to address trade disparities. By addressing these challenges, Pakistan can strengthen its trade ties with the EU and achieve sustainable economic growth.

Keywords: Pakistan, European Union, Trade Agreements, Tariffs, Non-Tariff Barriers, GSP+, Export Competitiveness, Trade Liberalization, Regulatory Standards, Bilateral Trade.