The Gulf Cooperation Council (GCC), comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, announced the signing of a preliminary free trade agreement with Pakistan. The preliminary accord was inked at the headquarters of the General Secretariat in Riyadh by GCC Secretary General Jasem Al Budaiwi and Pakistan’s Trade Minister Gohar Ejaz. However, before the final trade deal takes effect, an internal administrative and approval process is required.
During the signing ceremony, Al Budaiwi referred to the agreement as “a historic economic agreement” and a “turning point in cooperation.” The GCC underscored its commitment to fostering trade and economic cooperation for its member states regionally and globally.
Pakistan’s Commerce Ministry highlighted that once finalized, this agreement is poised to be the GCC’s first free trade agreement with any country since 2009 when it signed a pact with the European Free Trade Association. The GCC has one existing free trade agreement with Singapore and is actively negotiating similar agreements with Britain and several other nations.
Technical discussions between GCC and Pakistani officials regarding a potential trade agreement commenced last year, with the goal of boosting Pakistan’s exports to the bloc. In March of this year, Pakistani diplomats convened with their GCC counterparts in Riyadh to advance discussions on the agreement. Recently, Pakistan’s Foreign Minister Jalil Abbas Jilani met with Budaiwi, where both senior officials expressed the need for an “early conclusion” of the agreement.
In June, Pakistan established a Special Investment Facilitation Council to encourage foreign direct investment, particularly from Gulf nations, focusing on agriculture, defense production, energy, information technology, and mining sectors. The council aims to revitalize the country’s economy, which is grappling with a crisis and a significant trade deficit.
Jilani revealed that the council has received considerable interest from Middle Eastern countries, anticipating the arrival of delegations from GCC nations to explore agreements primarily centered on joint ventures in the five priority sectors.
In July, the International Monetary Fund (IMF) approved a $3 billion standby loan for Pakistan to address economic challenges brought on by “an external environment, devastating floods, and policy missteps.” The economic turmoil resulted in substantial fiscal and external deficits, escalating inflation, and dwindling reserves.
