Pakistan and the European Union have generally enjoyed a cordial relationship since the two parties began collaborating in 1976. Trade and development has continued in a positive fashion for more than forty years and it continues in the present day.
A recent news report confirms that the partnership is set to continue after Pakistan and the EU have signed what is referred to as a ‘strategic engagement plan’.
What does the strategic engagement plan cover?
It took four rounds of dialogue between the two sides to finally reach an agreement but what does the plan actually cover? The deal effectively takes existing arrangements as part of a bi-lateral agreement and it extends the official relationship between the two parties.
As a country, Pakistan benefits from preferential access to trade under the EU’s GSP-Plus system. The Generalised System of Preferences, to give the scheme its full title, provides a tariff reduction on certain products and is mainly targeted at developing countries. Pakistan has taken full advantage and the new arrangement sees that set to continue.
The deal also allows the EU to provide help in Pakistan’s domestic affairs such as security and freedoms for various groups.
Who was involved in the final agreement?
Representing each side were Federica Mogherini, representative of the EU for Foreign Affairs and Security while Pakistan were led by Foreign Minister Shah Mehmood Quereshi. In welcoming the deal on Monday 25th March, Shah Mehmood Quereshi said:
“The encouraging news is that after exchange of so many drafts, Pakistan and EU have finally agreed on a Strategic Engagement Plan. That’s a real plus.”
On behalf of the EU, Federica Mogherini noted that Pakistan had benefited from preferential market access under the Union’s GSP-Plus scheme. The new deal is therefore set to encourage further trade between the two parties.
“The trade with EU from Pakistan has doubled,” she said. “The EU is now Pakistan’s first export market.”
Ms Mogherini went on to acknowledge Pakistan’s commitment to freedoms within the country and she offered the EU’s help with in many key domestic areas.
What does this mean for Pakistan’s economy?
The economy of Pakistan has received a number of boosts in recent weeks. Back in February, Prime Minister Imran Khan signed $20 billion in investment from Saudi Arabia.
Elsewhere, the Chinese continue with their commitment to the region. Significant projects are coming to fruition under the CPEC agreement, most notably down in Gwadar where construction is set to begin on the city’s international airport.
The strategic port of Gwadar is very much the jewel in Pakistan’s economic crown right now and development in this south-western coastal port is fast but sustained. Elsewhere in the country, the atmosphere is one of consolidation, but it’s a positive overall landscape and the latest announcement between Pakistan and the EU can only help to boost the position even further.