Pakistan's trade relationship with the European Union, currently valued at over $12.6 billion annually, faces new pressures following the recently concluded EU-India Free Trade Agreement. Business leaders and economists warn that without urgent structural reforms, the country risks losing its competitive edge in one of its most vital export markets. Main Developments Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), convened a meeting of the Pakistan–EU Business Forum to assess the implications of the EU-India FTA. He stressed that the EU remains a crucial export destination and called for timely policy reforms to improve the ease of doing business for exporters. Read also: Sindh Spokesperson Reviews Lyari Drug Rehab Centre Operations Zubair Baweja, who chairs the Forum, underscored its role in strengthening trade ties with both Western and Eastern Europe. Omer Hameed, Economic Minister at Pakistan's Mission to the EU, noted that while Pakistan will benefit from the GSP+ scheme until 2027, the country must use this period to enhance industrial competitiveness and comply with emerging EU sustainability regulations. Background Pakistan has long relied on the EU as a primary export destination, with textiles forming the bulk of shipments. The EU-India FTA, finalized recently, threatens to erode the tariff advantage Pakistan previously enjoyed under the GSP+ preferential scheme. Dr. Junaid Ahmed of the Pakistan Institute of Development Economics (PIDE) presented analysis showing that the FTA will gradually reduce Pakistan's price edge over India. Pakistan's GSP+ status, which provides duty-free access to EU markets, expires at the end of 2027. The country has previously benefited from this arrangement but has struggled to diversify beyond traditional textile exports or to meet new EU regulatory standards on sustainability and labor conditions. Why It Matters The EU-India FTA could significantly reduce Pakistan's export competitiveness unless the country undertakes deep structural reforms. Dr. Ahmed emphasized that lowering energy costs, improving logistics, easing access to finance, and advancing technological upgradation are critical. Moving beyond textiles into higher-value manufacturing and knowledge-based sectors is essential for long-term growth. The FPCCI meeting concluded with a resolve to formulate recommendations for the government, focusing on safeguarding Pakistan's trade interests in the European market. Without decisive action, Pakistan risks losing market share to India in a region that accounts for a substantial portion of its export revenue. What's Next The Pakistan–EU Business Forum plans to maintain regular engagement with commercial counsellors in Europe, the EU delegation in Pakistan, and trade institutions. A comprehensive set of policy recommendations will be submitted to the government. The clock is ticking on GSP+ renewal, and stakeholders agree that preparations must accelerate to meet new EU regulatory requirements and to strengthen Pakistan's position before 2027.