AFTER failing to reach any sort of understanding with the Gulf Council Cooperation (GCC) for free trade agreement, talks for which were continuing since 2004, Pakistan has now decided to pursue individual trade deals with countries such as Saudi Arabia, United Arab Emirates (UAE) and Oman.
In an interview with Reuters, Advisor on Commerce Razaq Dawood hoped bilateral negotiations for preferential trade deals with the three Gulf Arab states would start in the next 6-12 months.
Pakistan has excellent and historic relations with these three countries and there is immense scope of bolstering the trade volume with them.
However, any PTA should be signed after due deliberations and considerations ensuring it also benefits Pakistan.
The PTAs signed with some of the countries in the past such as Malaysia and Indonesia only enhanced our imports but have had little impact on our exports which significantly deteriorated our trade balance.
Since Pakistan imports high value petroleum products from the Gulf countries, especially Saudi Arabia, and our exports only include items such as cereals, meat, textile, fruit, beverages, trade balance is already not in our favour.
Hence, in any PTA with the Gulf countries, we should seek reduction or removal of tariffs on such items which are in great demand in the Gulf countries in order to reduce this trade imbalance. Whilst ensuring quality in our products, we should capture the vast market of the Gulf.
Apart from trade, our authorities concerned must also engage with these countries to bolster their investment in different sectors of economy, especially agriculture and energy.
During his visit to Pakistan back in 2019, Saudi Crown Prince Mohammad Bin Salman had promised investment worth $ 20 billion in Pakistan which also included the establishment of an oil refinery in Gwadar but there appears to be no progress towards that end.
Similarly, the UAE announced earlier this month it would seek broad economic agreements covering trade and investment with eight countries, including India, Britain and Turkey but not Pakistan.
We need to enhance the level of engagement with these friendly countries in order to lure their investment.
