Exploring the Influence of GSP Plus Status on Pakistan’s Agro-Based Exports to the European Union: Insights from PPML Estimation

This research examines the impact of European Union’s Generalized Scheme of Preference plus (GSP+) on agricultural exports of Pakistan to European Union (EU) countries. Using panel data for the period 2004 to 2022, the study employs an advanced technique Poisson Pseudo-Maximum Likelihood (PPML), which aligns with the gravity model and addresses issues in the trade data analysis. Agricultural exports are analyzed using both PPML and Negative Binomial Regression (NBR) to ensure robustness findings. The results indicate that GSP+ status has significantly boosted Pakistan’s agricultural exports to EU countries. Key EU markets, Italy, Netherland, Belgium, Spain, and France have experienced a substantial growth in export volume. The findings further revel that cereals, products of animal origin, sugars and sugar confectionery, and fish and crustaceans are among the top exported categories. Policy implication based on findings suggest that maintaining Pakistan’s GSP+ is crucial for sustaining the growth of agricultural exports to the EU. Policy makers should focus on strengthening diplomatic and trade relations with top performing EU markets to ensure continued access under the GSP+ framework. Additionally, efforts should be made to diversify the export portfolio by promoting non-traditional and high value agricultural products.