Islamabad (TDI): Pakistan is preparing to extend duty and tariff concessions to Gulf states under a proposed free trade agreement (FTA), in line with concessions recently granted to the United States under a tariff deal.
The government intends to conclude the FTA with the Gulf Cooperation Council (GCC) states after a series of resumed negotiations, which were relaunched in May 2024 following the bloc’s agreements with other partners, including Turkiye, according to The Express Tribune.
At a recent cabinet meeting, it was noted that Pakistan would freeze additional customs duty and regulatory duty at FY2022-23 levels across all tariff lines, while also incorporating a Most Favoured Nation (MFN) clause. This clause ensures that any preferential treatment offered by Pakistan to another country would also apply under the Pakistan-GCC FTA.
Under the plan, Pakistan will provide concessions on 202 tariff lines. The Tariff Policy Board approved the concessions in April 2025. In exchange, the GCC is extending market access for 95.8% of Pakistan’s global exports and 94.8% of Pakistan’s exports to the Gulf in FY2023-24. Pakistan will grant reciprocal access on 38% of GCC exports to Pakistan and 73% of GCC’s global exports.
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The draft agreement also includes commitments to reduce non-tariff barriers by easing procedures and mutually recognizing standards. Services trade is part of the framework as well, covering transport, IT, telecommunications, financial services, construction, recreational activities, and repair and maintenance services. Bilateral investment treaties with Saudi Arabia and Qatar are annexed to the draft.
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A committee has been formed to assess the proposed FTA, with a mandate to review rules of origin, address Pakistan’s trade imbalance with GCC states, evaluate revenue losses from tariff cuts, and propose safeguards against dumping. Cabinet members stressed that Pakistan’s export targets must be met to offset the imbalance, particularly since oil and gas imports heavily dominate Pakistan’s trade with the Gulf.
Pakistan’s exports to the GCC rose from $2.37 billion in FY2022-23 to $2.83 billion in FY2023-24. Imports, however, remained far higher at $15.68 billion in FY24, down slightly from $16.24 billion in FY23.
