Pakistan’s Trade with the EU & its Member States
The European Union (EU) has its historical origins in the aftermath of World War II when European leaders sought to...
The European Union (EU) has its historical origins in the aftermath of World War II when European leaders sought to prevent future conflicts and foster peace and cooperation among European countries.
Combined, the EU is one of the world’s largest economies. Table 1 below lists the top 10 economies of the EU based on gross domestic product (GDP) in 2022. Following Brexit, the UK has not been included in this list.
The EU combined produced $14.08 trillion worth of goods and services in 2022, accounting for around 14.0 % of the world’s output. The following table shows the top 10 economies within the EU, where Germany produces the highest GDP of $4,031.1 billion and accounts for 24.3% of the EU economy. Following Germany are France, Italy, Spain, and the Netherlands.
Table 1: Top EU Economies Based on GDP-2022
| Rank | Country | GDP 2022 (USD Billion) |
Share in the EU Economy (%) |
|---|---|---|---|
| 1 | Germany | 4,031.1 | 24.3 |
| 2 | France | 2,778.1 | 16.7 |
| 3 | Italy | 1,997.0 | 12.0 |
| 4 | Spain | 1,390.0 | 8.4 |
| 5 | Netherlands | 990.6 | 6.0 |
| 6 | Poland | 716.3 | 4.3 |
| 7 | Sweden | 603.9 | 3.6 |
| 8 | Belgium | 589.5 | 3.5 |
| 9 | Ireland | 519.8 | 3.1 |
| 10 | Austria | 468.0 | 2.8 |
| Source: Trading Economics | |||
Pakistan’s Trade with the EU:
Trade has been a significant aspect of Pakistan-EU relations. In the early 2000s, Pakistan enjoyed preferential trade benefits under the EU’s Generalized System of Preferences (GSP). Subsequently, in 2014, Pakistan was granted GSP+ status, a major development that significantly enhanced trade opportunities for Pakistani exporters. The GSP+ has allowed Pakistan to export a wide range of products to the EU market at reduced or zero tariffs, leading to a notable increase in exports, particularly in the textiles and clothing sectors.
The following figure shows Pakistan’s trade trends with the EU for the last five years. Over the last five years, Pakistan’s trade with the European Union (EU) has seen growth. Total trade between the EU and Pakistan reached $13.62 billion in 2021, making EU Pakistan’s second most important trading partner after China, accounting for approximately 7.0% of Pakistan’s total trade. The EU is the most crucial export destination for Pakistan, with 29.8% of the country’s exports heading to the European market. Conversely, the EU ranks as Pakistan’s third-largest import source, with imports of $5.3 billion in 2021.
The GSP+ scheme has facilitated Pakistan’s exports to the EU, with zero import duties applied to 66 percent of tariff lines. As a result, Pakistan’s exports to the EU have consistently increased over the years, rising from $7.67 billion in 2013 to $13.6 billion in 2021, making it the largest beneficiary among all GSP+ countries.
About 86.0% of EU imports from Pakistan are imported using GSP+ preferential tariffs, showcasing the scheme’s significance in promoting trade. The current preference utilization rate, representing the ratio of preferential imports to GSP+ eligible imports, stands at an impressive 97.0%.
Figure 1 shows Pakistan’s trade trends with the EU region during the period 2018 and 2022.
Source: ITC Trade Map
Table 2 show Pakistan’s exports to the EU for the year 2022. Pakistan’s total exports to the EU in 2022 were $9.3 billion, accounting for 29.8% of Pakistan’s total exports to the world. Pakistan’s largest export destination within the EU was the Netherlands, with exports amounting to $1.8 billion in 2022, and accounting for 19.5 percent of total exports to the EU. Excluding Netherlands, the top 4 consisted of Germany, Spain, Italy and Belgium respectively.
Table 2: Pakistan Exports to EU Members 2022
| Ranking | Member Countries | Pakistan Exports 2022 (USD Millions) |
Share in Exports to the EU (%) |
|---|---|---|---|
| European Union (EU 27) | 9,304.7 | – | |
| 1 | Netherlands | 1,814.9 | 19.50 |
| 2 | Germany | 1,774.6 | 19.07 |
| 3 | Spain | 1,404.9 | 15.10 |
| 4 | Italy | 1,230.3 | 13.22 |
| 5 | Belgium | 766.5 | 8.24 |
| 6 | France | 537.0 | 5.77 |
| 7 | Poland | 364.5 | 3.92 |
| 8 | Portugal | 266.4 | 2.86 |
| 9 | Denmark | 260.2 | 2.80 |
| 10 | Sweden | 176.7 | 1.90 |
| 11 | Greece | 121.4 | 1.30 |
| 12 | Slovenia | 105.3 | 1.13 |
| 13 | Ireland | 95.8 | 1.03 |
| 14 | Romania | 72.7 | 0.78 |
| 15 | Czech Republic | 59.1 | 0.64 |
| 16 | Bulgaria | 42.5 | 0.46 |
| 17 | Finland | 42.4 | 0.46 |
| 18 | Lithuania | 35.2 | 0.38 |
| 19 | Slovakia | 26.7 | 0.29 |
| 20 | Croatia | 25.8 | 0.28 |
| 21 | Hungary | 22.6 | 0.24 |
| 22 | Estonia | 15.2 | 0.16 |
| 23 | Latvia | 14.6 | 0.16 |
| 24 | Austria | 13.8 | 0.15 |
| 25 | Cyprus | 9.1 | 0.10 |
| 26 | Malta | 5.3 | 0.06 |
| 27 | Luxembourg | 1.0 | 0.01 |
| 28 | European Union Nes | 0.11 | 0.00 |
| Source: ITC Trade Map | |||
Table 3 shows Pakistan’s imports from the EU for the year 2022. Pakistan’s total imports from the EU in 2022 were worth $5.3 billion, accounting for 7.4% of Pakistan’s total imports from the world. Pakistan’s largest import source within the EU was Germany, with imports of $938.8 million, and accounting for 17.7% of imports from the EU. Excluding Germany, the top 4 import sources were the Netherlands, Italy, Belgium and France.
Table 3 Pakistan Imports from EU Members 2022
| Ranking | Member Countries | Pakistan Imports 2022 (USD Millions) |
Share in Imports from EU (%) |
|---|---|---|---|
| European Union (EU 27) | 5,293.2 | – | |
| 1 | Germany | 938.8 | 17.7 |
| 2 | Netherlands | 668.2 | 12.6 |
| 3 | EU Nes., | 652.5 | 12.3 |
| 4 | Italy | 500.7 | 9.5 |
| 5 | France | 491.1 | 9.3 |
| 6 | Belgium | 457.2 | 8.6 |
| 7 | Sweden | 253.1 | 4.8 |
| 8 | Romania | 222.8 | 4.2 |
| 9 | Spain | 217.2 | 4.1 |
| 10 | Poland | 135.4 | 2.6 |
| 11 | Bulgaria | 127.5 | 2.4 |
| 12 | Austria | 123.1 | 2.3 |
| 13 | Ireland | 116.7 | 2.2 |
| 14 | Finland | 94.4 | 1.8 |
| 15 | Denmark | 89.5 | 1.7 |
| 16 | Hungary | 49.6 | 0.9 |
| 17 | Greece | 47.2 | 0.9 |
| 18 | Czech Republic | 31.2 | 0.6 |
| 19 | Portugal | 16.2 | 0.3 |
| 20 | Slovakia | 13.0 | 0.2 |
| 21 | Lithuania | 9.9 | 0.18 |
| 22 | Latvia | 9.3 | 0.17 |
| 23 | Slovenia | 7.0 | 0.13 |
| 24 | Estonia | 6.3 | 0.12 |
| 25 | Luxembourg | 5.7 | 0.11 |
| 26 | Cyprus | 5.6 | 0.10 |
| 27 | Croatia | 2.0 | 0.03 |
| 28 | Malta | 1.8 | 0.03 |
| Source: ITC Trade Map | |||
Pakistan’s Trade with the EU
Pakistan’s Top Exports to the EU
Table 4 shows Pakistan’s top 10 export products to the EU between 2020 and 2022. Pakistan’s most exported product in 2022 to the EU was “Men’s or boys’ ensembles of cotton” (HS-620322), and its exports amounted to $954.4 million. This accounted for 10.2% of all exports to the EU in 2022. Other popular products for export included bedlinen of cotton, ethyl alcohol, and toilet/kitchen linen.
Table 4 Pakistan’s Top 10 Exports to EU
| All Values in USD Million | ||||
|---|---|---|---|---|
| Code | Product label | Pakistan’s exports to European Union (EU 27) | ||
| 2020 | 2021 | 2022 | ||
| TOTAL | All products | 6,236.3 | 7,632.7 | 9,304.7 |
| 620322 | Men’s or boys’ ensembles of cotton | 756.3 | 863.1 | 954.4 |
| 630231 | Bedlinen of cotton (excl. printed, knitted or crocheted) | 590.5 | 748.4 | 747.4 |
| 630210 | Bedlinen, knitted or crocheted | 347.1 | 423.5 | 463.8 |
| 220710 | Undenatured ethyl alcohol, of actual alcoholic strength of >= 80% | 121.7 | 130.5 | 426.2 |
| 630260 | Toilet linen and kitchen linen, of terry towelling or similar terry fabrics of cotton | 259.0 | 337.6 | 412.9 |
| 630239 | Bedlinen of textile materials | 190.1 | 274.1 | 359.2 |
| 620342 | Men’s or boys’ trousers, bib and brace overalls, breeches and shorts, of cotton | 215.1 | 237.8 | 330.5 |
| 611090 | Jerseys, pullovers, cardigans, waistcoats and similar articles, of textile materials, knitted or crocheted | 117.9 | 204.4 | 289.2 |
| 610349 | Men’s or boys’ trousers, bib and brace overalls, breeches and shorts of textile materials, knitted or crocheted | 86.7 | 137.8 | 217.6 |
| 420310 | Articles of apparel, of leather or composition leather | 167.3 | 169.6 | 171.9 |
| Source: ITC Trade Map | ||||
Pakistan’s Top Imports from the EU
Table 5 shows Pakistan’s top 10 import products from the EU between 2020 and 2022. Pakistan’s most imported product from the EU in 2022 was light oils and preparations, and its imports amounted to $384.7 million. This accounted for 7.3% of all imports to the EU in 2022. Other popular products for import include durum wheat, turnings, shavings, waste and scrap, and vaccines.
Table 5: Pakistan’s Top 10 Imports from the EU
| All Values in USD Million | ||||
|---|---|---|---|---|
| Code | Product label | Pakistan’s imports from European Union (EU 27) | ||
| 2020 | 2021 | 2022 | ||
| TOTAL | All products | 4,009.0 | 5,656.4 | 5,293.2 |
| 271012 | Light oils and preparations, of petroleum or bituminous minerals which >= 90% by volume … | 249.6 | 111.1 | 384.7 |
| 100119 | Durum wheat (excl. seed for sowing) | 35.1 | 68.9 | 364.8 |
| 720441 | Turnings, shavings, chips, milling waste, sawdust, filings, trimmings and stampings of iron or steel, whether or not in … | 200.0 | 268.7 | 288.5 |
| 720449 | Waste and scrap of iron or steel (excl. slag, scale and other waste of the production of iron and steel; radioactive waste and scrap… | 139.3 | 199.4 | 204.5 |
| 300220 | Vaccines for human medicine | 127.9 | 564.1 | 199.7 |
| 300490 | Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic purposes, put up in measured doses… | 170.2 | 177.5 | 152.1 |
| 630900 | Worn clothing and clothing accessories, blankets and travelling rugs, household linen and articles for interior furnishing, of all types of textile materials… | 72.1 | 94.9 | 94.6 |
| 300259 | Cell cultures, whether or not modified (excl. cell therapy products) | 0.0 | 0.0 | 72.4 |
| 760200 | Waste and scrap, of aluminium (excl. slags, scale and the like from iron and steel production, containing … | 50.0 | 62.0 | 69.9 |
| 190110 | Food preparations for infant use, put up for retail sale, of flour, groats, meal, starch or malt extract, not containing cocoa… | 64.7 | 55.2 | 56.1 |
| Source: ITC Trade Map | ||||
Pakistan’s Potential Trade with EU
Pakistan’s Potential Exports to the EU
Table 6 shows Pakistan’s top theoretical potential products for additional exports to the EU in 2022. The aggregate theoretical potential for the top 10 products amounted to $4.9 billion during this year.
Table 6 Pakistan’s Export Potential to EU
| All Values in USD Million | |||
|---|---|---|---|
| Code | Product Description | Actual Exports in 2022 | Potential Exports in 2022 |
| 630231 | Bedlinen of cotton, n.e.s. | 696.0 | 873.0 |
| 620342 | Men’s trousers & shorts of cotton | 715.0 | 808.0 |
| 630260 | Toilet/kitchen linen of terry fabrics | 376.0 | 606.0 |
| 630210 | Bedlinen, knit/crochet | 332.0 | 541.0 |
| 611510-12, 611519-22, 611529, 611530, 611591-96, 611599 | Hosiery, knit/crochet | 215.0 | 423.0 |
| 610910 | T-shirts & vests of cotton, knit/crochet | 165.0 | 406.0 |
| 620462 | Women’s trousers & shorts of cotton | 380.0 | 330.0 |
| 630710 | Cleaning cloths | 48.0 | 319.0 |
| 100630 | Semi-milled or wholly milled rice | 124.0 | 306.0 |
| 420310 | Apparel, of (composition) leather, n.e.s. | 209.0 | 295.0 |
| Source: ITC Trade Map | |||
Pakistan’s Potential Imports from the EU
Table 7 shows Pakistan’s top theoretical potential products for additional imports from the EU in 2022. The aggregate theoretical potential for the top 10 products amounted to $3.3 billion.
Table 7 Pakistan’s Import Potential from the EU
| All Values in USD Million | |||
|---|---|---|---|
| Code | Product Description | Actual Imports in 2022 | Potential Imports in 2022 |
| 300210, 300211, 300212, 300213, 300215, 300219, 300220, 300290 | Human & animal blood, blood fractions & immunological products | 322.0 | 1,100.0 |
| 870321-24, 870331-33, 870340, 870350, 870360, 870370, 870380, 870390 | Motor vehicles for the transport of persons, n.e.s. | 51.0 | 569.0 |
| 720449 | Waste & scrap of iron/steel, n.e.s. | 346.0 | 513.0 |
| 300460, 300490 | Medicaments consisting of mixed or unmixed products, for retail sale | 253.0 | 396.0 |
| 720441 | Turnings & similar of iron/steel | 180.0 | 196.0 |
| 293311, 293319, 293321, 293329, 293331-33, 293339, 293341, 293349, 293352-55, 293359, 293361, 293369, 293371, 293372, 293379, 293391, 293392, 293399, 293410, 293420, 293430, 293491, 293499, 293980, | Other organic chemicals | 39.0 | 139.0 |
| 841989, 842119, 842489, 842839, 842850, 842890, 845610-12, 845620, 845630, 845640, 845650, 845690-91, 845699, 846221, 846229, 846410, 846420, 846490, 846520, 846591-96, 846599, 847710, 847720, 847730, 847740, 847759, 847780, 847950, 847971, 847979, 847989, 848071, 848610, 848620, 848630, 848640, 854311, 901041, 901042, 901049 | Other machinery | 85.0 | 117.0 |
| 870840, 870850, 870860, 870880, 870891, 870892, 870894, 870895, 870899 | Parts & accessories of motor vehicles, n.e.s. | 5.5 | 105.0 |
| 382200 | (Prepared) diagnostic/laboratory reagents & certified reference materials | 52.0 | 74.0 |
| 120510 | Low erucic acid rape or colza seeds | 0.9 | 73.0 |
| Source: ITC Trade Map | |||
The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 95) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about PBC, its members, objectives and activities can be found on its website: www.pbc.org.pk
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