12 April 2010 | Internews/Karachi
Pakistan, GCC close to signing free trade pact
Pakistan and the Gulf Co-operation Council (GCC) are about to sign Free Trade Agreement (FTA) as the consolidated draft incorporating the version of both the governments is almost in the final stage, official sources revealed here yesterday.
Talks of signing of FTA between Pakistan and GCC have been making the rounds for several years but both sides have only now reached at some concrete work to move ahead.
Pakistan was expected to sign FTA with the GCC countries in 2007 but was unable to finalise it due to procedural delays. The FTA between Pakistan and the GCC would be comprehensive in nature, covering the overall economic relations between the contracting states, including the UAE, Saudi Arabia, Qatar, Bahrain, Oman and Kuwait.
Bilateral trade volume between Pakistan and the GCC states averages at $4.7bn.
The third round of negotiations on FTA between Pakistan and GCC is also scheduled in the next month, which according to reliable sources would be the final one to sign FTA. Sources said the pact between Pakistan and the Council would be comprehensive in nature covering the overall economic relations between the two sides.
“Pakistan is negotiating with the GCC on a framework of FTA for four years after former prime minister Shaukat Aziz had directed the commerce ministry to enter into a pact with the Arab countries”, an official privy to the development said.
The agreement, the sources hoped will provide an opportunity to Pakistani exporters to tap the demand for goods in the GCC countries under the reduced tariff in the first phase and without tariff in the long term.
“The FTA will help abolish or reduce the existing 5% import duty imposed in the GCC countries, which will ultimately help reduce prices of Pakistani products in the region,” the official said.
Pakistan has already signed FTAs with Sri Lanka, China and Malaysia, besides South Asia Free Trade Agreement. At present, Pakistan is importing raw materials, semi-finished goods and oil from the GCC countries and the FTA will reduce the cost of these imports.
“The country wants to enhance trade ties with the Gulf countries and after signing of this agreement, Pakistan’s exports will show a substantial growth,” the official hoped.
He said that the continuous issues between Pakistan and GCC nations are related to agriculture products, which hampered the export growth of these products from Pakistan.