Daily Times, Islamabad, 25 October 2005
Pakistan to sign FTA with GCC soon
ISLAMABAD: Pakistan will soon sign free trade agreement with the member countries of the Gulf Cooperation Council (GCC), a senior official at the ministry of commerce told the Daily Times on Monday.
The GCC was established following agreement concluded on May 25, 1981 in Riyadh, Saudi Arabia, between Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). These countries declared that the GCC had been established in view of the special relations between them, their similar political systems based on Islamic beliefs, joint destiny and common objectives. The GCC is a regional common market with a defence planning council as well. The geographic proximity of these countries and their general adoption of free trade economic policies are factors that encouraged them to establish the GCC.
The government of Pakistan had decided to sign free trade agreement with the GCC as a trading block a year ago and a trade research study was initiated to facilitate the government to prepare the draft for the agreement, the official added.
A consultant was appointed to carry out a study in this connection. Now the consultant had completed his task, the official said.
The free trade agreement between Pakistan and the GCC is to be comprehensive in nature covering the overall economic relations between the contracting states.
The trade research study has proposed to the government that Most-Favored Nation status be offered to the GCC on a reciprocal basis. There should be an implementation commission to implement the FTA among the signatories. If any dispute arises it should be resolved through the appointment of a Dispute Settlement Panel consisting of officials from contracting states. The official said that having the FTA with the GCC member countries would benefit Pakistan as the distance between the contracting states was short resulting in reduced cost of imports and export under the proposed FTA. At present Pakistan is importing a good amount of raw materials, semi-finished goods and oil from the GCC countries and the FTA would reduce the cost of the imports. As a result of the FTA, Pakistan would be in a position to increase its export under the tariff concession to be available to Pakistani exporters, the official added. The agreement would 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.