German envoy raises concerns over trade barriers

LAHORE: German Ambassador Ina Lepel has said Pakistan and Germany maintain long-standing friendly and economic ties, but trade diversification and broader investment remain below potential because of regulatory unpredictability, a complicated tax regime, limited transparency and bureaucratic hurdles.

Speaking at the Lahore Chamber of Commerce and Industry (LCCI) on Tuesday, the ambassador said bilateral trade had stayed largely stagnant despite remaining stable, according to a statement. She said German companies were looking to diversify supply chains, creating new openings for countries such as Pakistan.

LCCI President Faheemur Rehman Saigol said Germany was Pakistan’s largest trading partner within the European Union, with two-way trade worth more than $2.5 billion. He said Pakistan’s exports to Germany stood at $1.7 billion, while imports were $880 million, leaving the trade balance in Pakistan’s favour.

Trade and investment potential

Saigol said there was room to expand cooperation in automobile manufacturing, renewable energy, engineering, pharmaceuticals, tourism and small and medium-sized enterprise development. He also appreciated Germany’s continued backing for the GSP+ framework, saying it had contributed significantly to the growth of Pakistan’s exports.

He also stressed the need for stronger cooperation with German development and technical organisations, especially GIZ, which he said had been supporting technical and vocational training as well as skills development in Pakistan.

Lepel acknowledged improvements in Pakistan’s infrastructure and economic indicators, but said deeper structural issues in taxation, governance and regulatory consistency were still affecting investor confidence and export competitiveness. She said continued implementation of reforms supported by the International Monetary Fund was necessary for lasting macroeconomic stability.

GSP+ and development cooperation

The ambassador said Germany, as part of the European Union framework, closely follows trade arrangements including GSP+, which are tied to compliance with international conventions related to labour rights, human rights and environmental standards.

She said Germany had committed around €114 million in development cooperation, focused on climate, energy, private-sector development, health and social protection.

Lepel also appreciated Pakistan’s diplomatic efforts for regional peace-building and recognised its role in facilitating dialogue and de-escalation in sensitive geopolitical situations. She further underlined the importance of stronger institutional connections between chambers and business organisations to improve business matchmaking and encourage joint ventures between Pakistani and German firms, particularly small and medium enterprises.