The recent trade deal signed between the European Union (EU) and India needs to be very seriously evaluated by Pakistan, because if not handled prudently it can significantly affect Pakistan’s exports to the EU, which, as we know, is our largest export destination. Despite a general slowdown in the EU over the last decade, it remains one of the principal consumption markets of the world and holds extreme importance for countries like ours that tend to suffer from a negative external account. Our own GSP status is up for review and renewal in a year’s time, and the general vibes from EU quarters are not entirely positive.

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As a precursor, earlier, bang in the middle of the Covid-19 pandemic, the free trade agreement inked between the European Union (EU) and Vietnam was signed in 2020. The FTA dramatically changed the fortunes of the Vietnamese economy. In the five years ending 2024, trade between the two grew by 47% to €67.1 billion. This was largely because of the exponential growth in exports from Vietnam to the EU. As a result of this boost to its economy, Vietnam’s per capita income rose from around $3,700 to around $5,060 during this period. No rocket science here: for all emerging markets, trade is the elixir of growth. It expands markets for domestic firms, fosters competition, raises productivity and opens access to foreign investment.

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This recent mammoth EU-India trade deal carries the same sort of potential as........

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