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Analysis

Six Years of GSP+ in Pakistan: Progress and Challenges

Text: Abdul Qadir, Kai Dittmann, Friedrich Ebert Foundation (FES)

The Generalised Scheme of Preferences (GSP+) is a key tool of the EU to promote sustainable development. In return for trade preferences, countries must ensure the implementation of fundamental labour rights, such as the International Labour Organization’s (ILO) Core Labour Conventions.

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Textiles and clothing account for over 80 per cent of Pakistan’s exports to the EU. Since joining the special service initiative under GSP+ in 2014, Pakistan’s exports to the EU have increased by 50 per cent, with 95 per cent of these exports being covered by GSP+. Pakistan’s government has started to implement a national labour pro­tection framework. Similarly, both federal and provincial authorities have improved systems of labour inspection. In the area of child labour, limited progress has been made specifically in Punjab, where the provincial government took steps to address issues in several factories.

At the same time, workers in Pakistan continue to face unemployment, job insecurity, infor­mality and gender discrimination. Exploitative labour practices remain pervasive. Large parts of Pakistan’s significant informal workforce are not issued proper contracts and are thus lacking minimum wage guarantees and social security. In the city of Sialkot, only one third of workers receive social secu­rity provisions. Child and bonded labour remain pervasive in both the formal and informal sectors of the Pakistani economy. Over three million1 people are still living under modern slavery in Pakistan, and over two million children are working as child labourers.2 Unpaid family work and work in the agricultural sector account for the largest share of children in employment in Pakistan. Girls are more likely than boys to work in agri­culture or non-market household production. Furthermore, no law prohibits wage discrimi­nation based on sex or gender. At 34 per cent, Pakistan continues to display a gender pay gap that is more than double the global average.3 The workers’ unionisation rate remains below 5 per cent.

Under the Friedrich Ebert Foundation4 (FES) regional project Core Labour Standards Plus5, re­searchers have looked at the effects of global supply chains in Pakistan and have found that the social clauses in the GSP+ have led to some early signs of positive responses from the government. In cooperation with the FES office in Pakistan, the Pakistan Workers Confederation (PWC) has been issuing annual assessment re­ports on GSP+ compliance status. The reports have been used for discussions with national and international actors including the European Commission and various members of the European Parliament as well as with workers to raise their awareness of how they can use GSP+ provisions in negotiations with authorities and employers.

However, speaking from his practical experience in 43 years of union work, Mr Zahoor Awan, General Secretary of the PWC and the Pakistan Workers Federation, notes: “Companies that are complying with labour standards complain about the absence of a level playing field.” This situation is exemplified in the city of Sialkot with its sporting goods industry: “The representative union of a factory in Sialkot, Punjab, which produces rucksack bags for Adidas Germany, ensures that their employer reliably implements labour laws in the company. This leads to severe problems for the plant in the face of strong competition from those suppliers who are quickly moving into the nearby export processing zone to take advantage of labour law exemptions,” Awan added.

The third periodic review of GSP+ is due in 2020. If Pakistan makes positive progress in the implementation of the ILO conventions6, greater oppor­tunities for trade and exports will be waiting for its business community. Lasting progress can only be made through dialogue with trade unions, multinational corporations, local employers as well as regional and national administrations. At the same time, the legal and actual implemen­tation situation of laws in Pakistan has to improve in order for the GSP+ to fulfil its promises to Pakistani workers.

Footnotes

1.
Country data, Global Slavery Index. Accessed 5 March 2020. https://www.globalslaveryindex.org/2018/data/country-data/pakistan/
2.
Hossain, Jakir; Ahmed, Mostafiz; Hasan Sharif, Jafrul. (2018). Linking trade and decent work in global supply chains in Bangladesh, Dhaka.
3.
International Labour Office (2018). Global Wage Report 2018/19: What Lies behind Gender Pay Gaps.
4.
The Friedrich-Ebert-Stiftung (FES) is a German political foundation. The FES was named for Friedrich Ebert, Germany’s first democratically elected president.
6.
Pakistan has ratified all eight ILO Fundamental Conventions.
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