GSP+ in jeopardy?


Problems with the French are fast becoming controversial. It seems, if reports in the press are to be trusted, that the EU is not very happy about what has so far become known about the deal between the government and Tehreek e Labbaik Pakistan (TLP) protestors the other day and has threatened to suspend the GSP+ trade facility if the French ambassador is expelled or French products boycotted. The Union well within its rights to do so, of course, since it says so in the black-and-white of the original agreement that the program can be suspended at any time if the recipient country does not follow it “in letter and spirit.” To make things worse, Paris has also hinted making life difficult for Pakistan at the next FATF meeting in February if Islamabad follows through with such harsh actions.
All this puts the government in a bit of a tight situation. If it has indeed signed such an agreement with TLP, then it must have thought things through and also factored in all that comes with such decisions. The only problem is that Pakistan needs not just this trade facility and other like it simply to stay afloat but cannot do without the aid that comes from places like the EU either. Just two weeks ago the EU extended financial support to Pakistan to the tune of 150 million euros to help address pandemic related issues in the country. Pakistan also has budgeted estimates of $25.373 million in project loans from France for 2020-21, a good part of which has already been disbursed.
To completely reset the equation with France at this sensitive moment, when the government is already pretty much in the dark about what it is going to do in case the second wave of the pandemic gets worse, would not be wise. Yet the leadership is also bound to accommodate the feelings and demands of all segments of society. Therefore it is up to the government to find the right balance. Hopefully it will not let matters drag on till it is caught in an even darker corner, especially if that is going to make FATF related things worse. That is something that the country cannot afford at all, for failure there would shut us out of the international lending regime, along with many other things. No doubt the government is aware that this moment requires very careful thinking.