PAKISTAN: Brussels suspends Pakistan’s ethanol trade privileges as EU scrutiny deepens
EU Today (23.06.2025) – In a move that underlines the growing tension between trade liberalisation and domestic market protection, the European Commission has suspended Pakistan’s preferential access to the European ethanol market under the Generalised Scheme of Preferences Plus (GSP+).
The decision, effective from 20th June, marks the first significant restriction imposed under the renewed scheme and comes amid mounting calls for the EU to enforce conditionality with greater rigour.
The suspension applies specifically to imports of ethanol—a significant industrial export for Pakistan—but leaves fuel-grade ethanol untouched. While on the surface a narrow technical measure, the implications are more far-reaching. Ethanol exporters in Pakistan, many of whom have relied heavily on tariff-free access to European buyers, now face a sudden and sharp contraction in demand. European traders, meanwhile, have been scaling back orders in anticipation.
The move follows a request made in May 2024 by six member states—France, Germany, Spain, Italy, Hungary and Poland—who invoked Article 30 of the GSP Regulation, citing “serious disturbance to the Union ethanol market” caused by Pakistani imports since 2022. Under this clause, the Commission is authorised to suspend preferences in order to protect EU industries deemed at risk.
This episode lays bare the delicate balancing act at the heart of the GSP+ regime.
Originally granted to Pakistan in 2014, the status was intended to encourage reforms by offering developing countries favourable access to the world’s largest single market. In return, recipients must demonstrate commitment to 27 international conventions on human rights, labour protections, environmental safeguards and good governance.
Yet enforcement has often lagged behind rhetoric. Critics argue that the scheme too frequently turns a blind eye to chronic violations. For several years, human rights organisations, notably CAP/ Liberté de conscience and Human Rights Without Frontiers (HRWF) have raised the alarm over Pakistan’s deteriorating record on religious freedom, forced conversions, and systemic abuse of minorities.
Earlier this year, EU Today, in association with HWRF, CAP/ Liberté de conscience and a coalition of NGOs, launched a sustained campaign urging Brussels to reassess Pakistan’s continued eligibility for GSP+ status in light of these abuses. The ethanol decision, while ostensibly economic, is seen by many as an early signal that the tide may be turning.
“This is not just about ethanol,” said one senior Commission official speaking off the record. “The GSP+ framework is built on mutual responsibility. If the commitments made by beneficiary countries are not upheld, we are obliged to act.”
Indeed, the technical rationale for the ethanol measure—market disturbance—is not incompatible with a broader political reality. Pakistan’s export surge in industrial-grade ethanol, aided by duty-free access, has placed sustained pressure on European producers.
In Pakistan, exporters are already preparing for impact. Some suppliers have indicated they will pivot toward African markets, where certification regimes are less stringent. Others are bracing for a drop in overall revenue, compounded by growing uncertainty over whether GSP+ benefits will survive beyond 2027. Although the scheme was technically extended at the end of 2023, its future remains under review.
Supporters of continued GSP+ access argue that the programme has delivered real economic benefit to Pakistan and contributed to social stability. But mounting scrutiny from civil society, alongside defensive reflexes from EU industries, is testing that consensus.
In Brussels, the conversation is shifting. Where once the GSP+ label was handed out as a symbol of partnership, it is increasingly being scrutinised as a privilege with a price. With human rights concerns mounting and protectionist sentiment rising, Pakistan’s position looks more precarious than ever.
As one MEP bluntly put it: “The EU cannot keep subsidising impunity.”
The ethanol decision may well be just the beginning.
More reading
Pakistan loses EU GSP+ ethanol status
Photo : A side event held during the 58th Session of the United Nations Human Rights Council, Geneva, on 26th March 2025 drew urgent attention to systemic human rights violations in Pakistan, focusing particularly on religious persecution, education policy, and the use of European Union development instruments.
Left to Right: Mr Anwar Mehmood Rehman, a Swiss-based Ahmadiyya Muslim politician and human rights activist, Mr Ján Figeľ, former EU Commissioner and first European Union Special Envoy for the promotion of freedom of religion or belief outside the EU, Ms Christine Mirre, Director of CAP Liberté de Conscience, Mr Willy Fautré, Director of Human Rights Without Frontiers, Ms Inna Chefranova, Executive Director of the European Facilitation Platform
