KARACHI – Pakistan, all set to sign a Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC), would be at a disadvantage compared to the gulf countries which possess a huge economy. Pakistan must consider the weaker position of its own economy and should look to avoid repeating mistakes, the country had committed, during the FTA with China, sources told Pakistan Today. The country has exhibited a huge trade difference with China after signing of FTA, as there has been an influx of goods from the neighboring country in the last few years which took trade deficit to around $4.0 billion.
The proposed FTA would not make a lot of difference in the duty structure, affecting the present bilateral trade, as import duty of zero to five percent in the GCC countries is already existent, they said. “Concerned authorities should thoroughly examine future implications of any agreement prior to its signing,” they said, adding that the trade difference between Pakistan and China has significantly widened after implementation of the Pak-China FTA. Chinese cell phones, which have captured almost 90 percent of the market in Pakistan after the FTA, are an example while other foreign products have also easily captured a major share of the domestic market, they claimed.
However, according to sources, Pakistan and GCC were about to sign the FTA as negotiations over the draft of the proposed agreement were almost finalised. Following the FTA, sources claimed that Pakistan was looking to boost its trade volume with GCC countries from the current $59 billion to $350 billion by 2020.
As trade relations between Pakistan and GCC countries were expecting to be multiplied in the near future, volume of trade will enter in the figure of hundreds. The Ministry of Commerce and other concerned departments were also submitting their inputs before formal signing of the agreement, while member countries of the council were also convinced about the issue, sources claimed.
Proposals from both sides have also been discussed in various rounds of negotiations on FTA during the last few years. Pakistan was also negotiating with different member countries of GCC including Oman, Saudi Arabia, United Arab Emirates, Bahrain, Qatar and Kuwait on the framework of FTA for the last four years. Besides Pakistan, the United States was also interested to have an FTA with the GCC, but some members of the council had raised objections.
However, proposal of including payment of the five percent duty by the governments of GCC members with free trade agreements with the US into a regional fund, tagging duty-free products exported under the FTAs, or routing them via existing free trade zones in the region, was also under discussion. Pakistan is trying hard to finalise the FTA at the earliest, while the third round of talks on the issue are expected soon to conclude the discussion. The Pakistan’s ambassador to Riyadh Umar Khan Sherazi had, earlier, claimed that FTA with GCC would be signed before March this year.
