Pakistan has reportedly agreed to sign a Free Trade Agreement (FTA) with Gulf Cooperation Council (GCC) for tariff reduction which has been divided into five categories, sources said.
According to details, category A states zero duty from the first day of entry into force of the agreement; category B claims zero duty after 5 years of entry into force of the agreement; category C is zero duty after 10 years of entry into force of the agreement; category D consists of zero duty after 15 years of entry into force of the agreement.
Meanwhile, category E states products in this category should not exceed 5 percent of tariff lines and are subject to tariff reduction by 50 percent, and lastly, in category F, products are excluded from liberalization. Sources also said the Ministry of Commerce is deciding on which products will be shifted to which categories.
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Pakistan’s relations with GCC
The GCC, which consists of the UAE, Saudi Arabia, Qatar, Bahrain, Oman, and Kuwait, was established under an agreement concluded on 25 May 1981 in Riyadh, Saudi Arabia. The Framework Agreement was signed in Islamabad in August 2004.
So far two rounds of negotiation between the GCC States and the Islamic Republic of Pakistan have been held to establish a free trade area. In these rounds of negotiations, a number of topics related to this agreement were finalized.
The GCC countries offer huge potential for Pakistan in multiple fields including infrastructure, food, and services. Pakistan benefits from the emerging job market in the services sector of the Gulf States. In fact, during the July – May period, Pakistan received the highest remittances from Saudi Arabia.
April 2022 received record level of $3.1 billion in remittances from overseas Pakistan – breakdown as follows: Saudi Arabia $707 million, UAE $614 million, UK $484 million and US $346 million
— omar r quraishi (@omar_quraishi) May 13, 2022
May, Foreign Minister Bilawal Bhutto met with GCC Secretary-General Dr. Nayef Falah M Al-Hajraf on the sidelines of the annual meeting of the World Economic Forum (WEF) in Davos.
Recalling historical linkages, geographical proximity and cultural affinities between Pakistan and the GCC, the foreign minister underscored that Pakistan attached high importance to its fraternal relations with member states of the GCC, both bilaterally and in the context of the GCC.
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The Foreign Minister and the Secretary-General agreed to explore further avenues for enhancing bilateral trade and economic ties between Pakistan and the GCC as well as to strengthen institutional linkages, in line with the Joint Action Plan for Strategic Dialogue. As for the FTA, the two sides expressed their determination to conclude the negotiations at the earliest possible.