Pakistan, KSA reach consensus for free trade deal with GCC

Commerce minister Dr Ejaz says both sides held productive discussions towards finalising the investment-related agreement

Solangi terms this a major development towards attracting huge investments in country.

ISLAMABAD  -  Pakistan and Saudi Arabia have reached a consensus on the investment modalities, paving the way for the ratification of a much-awaited free trade agreement with the Gulf Cooperation Council, a development that has been pending for the last 19 years.

“If approved, this will mark the first trade and investment agreement that the GCC has entered into with any country in the past 15 years,” said Caretaker Federal Minister for Information and Broadcasting Murtaza Solangi Sunday in a post on X.

Currently, an important Pakistani delegation led by Commerce and Industries Minister Dr Gohar Ejaz is in Saudi Arabia where they held talks with the GCC’s chief negotiator to finalise the investment-related part of the GCC Free Trade Agreement (FTA). Sharing the details of the meetings in Saudi Arabia on his X handle, the commerce minister said, “Productive discussions in Saudi Arabia as we work towards finalising the investment-related part of the GCC Free Trade Agreement.”

The minister was confident that this agreement will strengthen economic ties between Pakistan and the GCC, fostering new opportunities for trade and investment.

The agreed investment chapter is now set to be presented to the GCC ministers for approval, which was already included in the meeting’s agenda. The GCC Secretariat has the authority to sign the agreement on behalf of the six-member GCC countries. If approved, this will mark the first trade and investment agreement that the GCC has entered into with any country in the past 15 years.

According to a statement issued by the ministry, the technical teams from the two sides held extensive discussions on the remaining details of the investment chapter, including investment protection and facilitation.

They also discussed the potential impact of the FTA on bilateral trade and investment flows.

“This is a major step forward in our efforts to strengthen economic ties between Pakistan and the GCC.” said Ejaz. The investment chapter is an important part of the agreement, and we are confident that we can reach an agreement soon, the minister said. The GCC FTA is expected to boost trade and investment between Pakistan and the GCC. The agreement is also expected to create new jobs and opportunities for businesses in both regions. The two sides also discussed the possibility of holding a joint business forum shortly and to promote trade and investment between Pakistan and the GCC. In September, Pakistan agreed on the FTA with the GCC. However, the signing of the agreement was postponed as Saudi Arabia demanded to incorporate an investment chapter into the agreement. This chapter was particularly aimed at including a protection clause, specifically the provision of the forum of the International Centre for Settlement of Investment Disputes (ICSID). In August 2004, Pakistan and the GCC, which includes Saudi Arabia, the United Arab Emirates, Bahrain, Oman, Qatar, and Kuwait, signed a framework agreement to explore the possibility of an FTA. However, only a handful of negotiation rounds occurred in the years that followed. The dialogue was revived in 2021 after a substantial hiatus. In the previous year, both parties conducted technical-level discussions to assess the feasibility of finalising the agreement. This potential agreement could significantly enhance Pakistan’s export capacity to the GCC bloc.

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