The agreement was officially signed by the EU Ambassador, Rina Kionka, and the Secretary of Economic Affairs, Dr. Kazim Niaz, marking a significant step in strengthening bilateral ties.
The 20 million euro grant will be used specifically for enhancing governance and improving Pakistan s business environment. The goal is to make Pakistan’s private sector, especially small and medium-sized enterprises (SMEs), more competitive in both local and international markets. This is a crucial step towards boosting the economy and fostering an environment that encourages investment and business growth in Pakistan.
In addition to this, Pakistan and the European Union share a long history of economic cooperation. Under the Cooperation Agreement signed in 2004, both parties have worked to improve trade and investment. Pakistan is also a major beneficiary of the EU’s Generalised Scheme of Preferences (GSP+), which provides favorable trading conditions, including zero duties on two-thirds of product categories. This scheme helps Pakistan enhance sustainable development and good governance, as it is required to ratify and implement 27 core international conventions on human rights, labor, and environmental protection to maintain its GSP+ status.
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The EU remains Pakistan’s second most important trading partner, accounting for 12.4% of Pakistan’s total trade in 2024. In 2024, bilateral trade between the two regions reached €12 billion, with textiles and clothing dominating EU imports from Pakistan. On the other hand, the EU exports machinery, chemicals, and base metals to Pakistan. This is part of the EU-Pakistan 5-year Engagement Plan, designed to further enhance trade and investment opportunities.
The signing of this new deal is not just about the immediate grant but also a reflection of Pakistan’s strong position in the global market, especially in the textile industry, and its growing relationship with the EU. With this continued partnership, Pakistan is poised to benefit further from the GSP+ arrangement, which brings even more opportunities for growth and development.
