ISLAMABAD: The Pakistan and Gulf Cooperation Council (GCC) are said to have signed “face-saving” Free Trade Agreement (FTA) as both sides have not yet agreed on zero duty on many items, well-informed sources told Business Recorder.

According to an official statement, Pakistan and GCC concluded the final round of negotiations on the Pakistan-GCC FTA (PAK-GCC FTA) at Riyadh, Saudi Arabia. The final round was held from September 26-28, 2023 at the GCC Headquarters, Riyadh.

This is a significant development as the FTA is the first by GCC with any country since 2009 and marks a milestone in both sides’ economic cooperation.

Pakistan 'finalises' free trade agreement with GCC

The agreement was signed by GCC Secretary-General Jasem al-Budaiwi and Pakistan Minister for Commerce and Industries Gohar Ejaz.

Al-Budaiwi stated that the preliminary free trade agreement (FTA) between the GCC and Pakistan comes in recognition of the importance of strengthening trade relations and economic cooperation with countries and international blocs. The Commerce Ministry in an official statement stated that speaking on the occasion, Gohar Ejaz said that Pakistan has excellent relations with all the countries of the GCC and this FTA will ensure that economic ties are commensurate with these relations.

The sources said, Pakistan and GCC delegations recently held negotiations in Islamabad, where general consensus was evolved that FTA must be signed even if its scope is limited so that the process which was started decades ago materializes. In parallel, Pakistan and United Arab Emirates (UAE) are also in talks on a trade pact.

“Both parties look forward to the expeditious signing, ratification, and implementation of the agreement, which will mark a new chapter in the economic relations between our countries”, a joint statement reads.

This will now be followed by internal administrative and approval process before signing and entry into force of the agreement.

An unsubstantiated source suggested that Crown Prince/Prime Minister of Saudi Arabia Muhammad Bin Salman has linked his October visit to Pakistan with signing of FTA between Pakistan and GCC during talks on September 26-28. Previously, both sides decided on tariff reduction modalities in five categories.

The GCC, sources said, wanted to ink the pact prior to finalisation and signing of trade agreement between Pakistan and United Arab Emirates (UAE) which is also under active deliberations.

Copyright Business Recorder, 2023