By Asad Cheema
ISLAMABAD: The Pakistan Business Forum (PBF) has commended the efforts of the Ministry of Commerce for finalizing the Pakistan-Gulf Cooperation Council (GCC) Free Trade Agreement (FTA) at Riyadh and the PBF called the signing of the FTA a “remarkable step” for export growth. PBF President, Mian Usman Zulfiqar said, “FTA has been the first by GCC with any country since 2009.” “We have excellent relations with all the countries of the GCC, and this FTA will ensure that our economic ties are commensurate with these excellent relations,” he added.
Pakistan and the GCC had signed a framework agreement to discuss the free trade pact in August 2004, but only a few rounds of talks took place. The two sides resumed the negotiations in 2021. PBF President also noted that this historic economic agreement represents an important turning point in cooperation and would contribute to growth and prosperity in a way that serves the common interests of both sides. The PBF is a leading business organization in Pakistan that represents the interests of the private sector.
The organization has been a vocal advocate for the FTA, arguing that it would boost trade between Pakistan and the GCC countries and create jobs in Pakistan. The GCC is a regional bloc of six Arab countries: Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, and the United Arab Emirates. The GCC countries are major trading partners of Pakistan, and the FTA is expected to increase trade between the two sides by up to 50%. “From this development Pakistan to boost its exports to GCC countries,” and this FTA would help enhance trade with Gulf nations, he added.
“One should understand that FTA is a basic tool to enhance trade between the nations and this step is very welcoming because of the future growing market of the Middle East,” Zulfiqar said. “There is huge potential for trade enhancement and investment in the GCC region as countries including Saudi Arabia are rapidly growing.” The share of Pakistani exports to the Saudi market was very limited, the PBF President said, an issue that would be addressed through the removal of trade barriers under the FTA.
Similarly, this FTA would provide a competitive level playing field to Pakistan compared with its South Asian neighbors including India and Bangladesh. “This FTA will also increase trade volume with GCC nations because if we compare our trade (with GCC) with India, it is doing well in GCC, while we are lagging,” Zulfiqar added. PBF President also stated, “The signing of the FTA comes as Pakistan is pushing to pitch an improved business climate and its potential for foreign direct investment in a range of sectors. In June Pakistan government set up a Special Investment Facilitation Council (SIFC) — a civil-military hybrid forum — to fast-track decision-making and promote investment from foreign nations, particularly Gulf countries.”
The council has identified five sectors as a priority, namely agriculture, mining, information technology, defense production, and energy, as Pakistan deals with a balance of payments crisis and requires billions of dollars in foreign exchange to finance its trade deficit and repay its international debts in the current financial year.