Trade Boost: Pakistan’s New Plan For Middle East Markets
Pakistan has established a strategy to boost trade with Middle Eastern countries, including Saudi Arabia, though it will not involve signing new agreements due to disagreements over the Bilateral Investment Treaty (BIT) template, according to well-informed sources.
The major economies in the Middle East include Saudi Arabia (GDP: $1.108 trillion), UAE ($507 billion), Kuwait ($184 billion), Iraq ($264 billion), and Qatar ($237 billion).
For the fiscal year 2023-24, Pakistan’s top export destinations and their respective figures are: UAE ($1.590 billion), Saudi Arabia ($698 million), Oman ($210 million), Qatar ($158 million), Kuwait ($127 million), Bahrain ($64 million), Yemen ($118 million), Iraq ($58 million), Jordan ($39 million), and Lebanon ($15 million).
A parliamentary body has called for strengthening trade relations in the region.
Bilateral trade between Pakistan and the Middle East totaled $15.970 billion, with Pakistan’s exports amounting to $3.080 billion.
Pakistan’s primary imports from the Middle East include crude petroleum oils and oils from bituminous minerals, petroleum oils (excluding crude), preparations ($4.588 billion); petroleum gas and other gaseous hydrocarbons ($3.6375 billion); polymers of propylene or other olefins, in primary forms ($525.2 million); polymers of ethylene, in primary forms ($525.2 million); and ferrous waste and scrap, including re-melting scrap ingots of iron or steel.
Key exports from Pakistan to the Middle East during 2023-24 were: rice ($564 million), fresh or chilled bovine meat ($351.92 million), petroleum and oils (excluding crude) preparations ($197.22 million), and men’s or boys’ apparel such as suits, jackets, and trousers ($128 million).
The government has been engaged in internal discussions regarding trade relations with Saudi Arabia, focusing on post-FTA negotiations and future strategies, as the FTA cannot proceed until the BIT is finalized. GCC members, including Saudi Arabia and Qatar, are keen on concluding the BIT before proceeding with investments in Pakistan.
Export restrictions on seafood products from Pakistan to Saudi Arabia have been lifted.
Plans include a single-country exhibition in Saudi Arabia from February 5-7, 2025, and a ‘Lifestyle Show’ in Saudi Arabia also scheduled for 2025.
A trade delegation from the UAE is expected to visit soon, and the Ministry of Commerce has been tasked with coordinating with key business associations and chambers to maximize benefits from the delegation.
The UAE has recognized progress in the sectors of agriculture (14 projects), mining, and finance. However, the UAE has expressed concerns about the slow response from Pakistan’s Commerce Ministry regarding the Comprehensive Economic Partnership Agreement (CEPA), urging for expedited action.
Regarding the proposed investment in the logistics sector, the Ministry of Railways has communicated with the Foreign Office as per previous instructions and engaged the Pakistani Ambassador in the UAE to coordinate with DP World on the commercial agreement. The Ministry of Foreign Affairs has requested additional information on the project, which has been provided by the Ministry of Railways.
Efforts are underway to establish Joint Working Groups (JWGs) with Iraq, Kuwait, Jordan, Oman, and Yemen, with meetings planned with Iraq and Syria. A trade delegation to Iraq and Syria is in preparation, and planning for the 18th OIC Trade Fair in December 2024 is underway.
Three new missions in Iraq, Kuwait, and Oman have been approved, and work on concessions with OIC countries is ongoing.
