akistan’s share of trade with the Gulf Cooperation Council nations has been relatively modest. The direction of trade database of the International Monetary Fund shows that it has been below 1 percent of the imports by the GCC.

In the year 2002, the GCC countries imported $86.7 billion worth of goods, with Pakistan contributing a mere $650 million, equivalent to 0.75 percent of the GCC’s total imports. By 2012, Pakistan’s share in GCC imports had inched up to 0.81 percent. Over the last decade, it has dwindled to 0.47 percent, accounting for approximately $3.2 billion in 2022. The untapped potential for expanding exports to the GCC bloc therefore offers significant promise.

From 1980s to the late 1990s, Pakistan had a bigger role as a food supplier to the GCC countries, particularly the United Arab Emirates and Saudi Arabia. Arid climates of the GCC countries make agricultural activities arduous.

With the advent of the 21st Century, Pakistan gradually lost its status as a prominent supplier of food to the GCC states. The factors behind this trend included climate change, water scarcity, inefficiency of traditional irrigation systems, high input costs, lack of investment and low literacy rate among Pakistani farmers.

The GCC, formed in 1981 as an inter-governmental union, boasts considerable economic power, with a combined GDP of $2,185 billion in 2022. Leading contributors to this economic juggernaut include Saudi Arabia ($1,108 billion) and the UAE ($508 billion). The GCC’s total population hovers around 59 million. Saudi Arabia alone accounts for 35 million of its residents.

Pakistan reported a GDP per capita of $6,685 in 2022. The GCC nations have significantly higher per capita income levels, with Qatar topping the list at $115,045, followed by the UAE at $83,727, and Saudi Arabia at $61,808. The higher per capita income is associated with higher import demand. The GCC’s imports, valued at approximately $676 billion in 2022, underscore its status as a lucrative export destination.

While the GCC nations predominantly source machinery, electrical appliances, vehicles, metals, plastics and pharmaceuticals from global players such as China, India, the United States and European countries, Pakistan holds a comparative advantage in various agricultural products and labour-intensive manufacturing. These sectors include textiles, footwear, optical equipment and surgical instruments.

In 2022, Pakistan’s meat exports to the GCC totalled $360 million, comprising 5.54 percent of the GCC’s total meat imports. Cereal exports from Pakistan reached $480 million, constituting 6.55 percent of the GCC’s imports.

Similarly, Pakistan’s exports of fruits constituted 2.73 percent, vegetables 4.80 percent, and fisheries 5.59 percent of the GCC’s imports in these categories. Furthermore, Pakistan exports basket included textiles, apparel, footwear, beverages, salt, dairy products, live animals, optical instruments and surgical equipment.

Geographic proximity presents a distinctive advantage in the world of international trade. Cargo ferries can reach the UAE from Karachi in 30 to 35 hours, offering a remarkably efficient and cost-effective trade route.

Ukraine has been a key supplier of agricultural imports for the GCC countries. There were plans for substantial investments in Ukraine’s agriculture sector. However, the Ukraine-Russia conflict has disrupted these arrangements, reshaping food security concerns in the GCC and creating opportunities for other countries with a comparative advantage to emerge as potential suppliers.

Recent developments in Pakistan are fostering an encouraging business environment to attract investment, primarily from the GCC states, in the agriculture sector, especially food industry. The passage of the Special Investment Facilitation Council bill signifies a proactive approach in this regard.

Pakistan’s geographic proximity to the GCC countries is another advantage. Cargo ferries can reach the UAE from Karachi in just 30-35 hours, offering a remarkably efficient and cost-effective trade route. Gwadar port can soon become a linchpin in trade facilitation, as this deep-sea port not only connects Pakistan to the Arabian Sea but also serves as a gateway to China’s landlocked Xinjiang province via the Strait of Hormuz.

A preliminary free trade agreement has been signed between Pakistan and the GCC countries. Under this agreement, agriculture, defence production, energy, information technology, and mining have been identified as key priority sectors. In the future, joint ventures in the potential priority sectors will address the economic challenges in our country and improve the trade landscape, expanding the exports and capital inflow and attracting more FDI with more efficient resource allocation.

Traditional trade processes have imposed bureaucratic burdens, historically leading to time-consuming and resource-intensive border clearance procedures that hindered export performance.

Significant progress has been made recently through the Pakistan Single Window initiative, which aims to digitise trade processes. More recently, the PSW has extended its efforts to digitising the marine industry, enhancing the overall efficiency and positioning Pakistan to increase exports, especially seafood, to the Gulf region. Notably, Saudi Arabia and other Gulf Cooperation Council countries are substantial consumers of Pakistani fish and fish products.

Amid these developments, the Pakistan-GCC agreement holds significant importance in increasing its international trade opportunities. Negotiations for the trade agreement have been going on since 2004. In 2022, the third round of negotiations for the Pak-GCC Free Trade Agreement focused on modalities for tariff reduction across various categories.

Concurrently, China is actively pursuing a free trade agreement with the GCC, focusing on various trade-related sectors, including energy, agriculture, fruits, spices, building materials and trade in services.

While free trade agreements hold promise, Pakistan must bolster the competitiveness and internationalisation of its industrial sector. To make agricultural exports competitive, adherence to international standards like GlobalGAP can be valuable. Meeting the stringent food product safety regulations, chemical-free requirements and packaging and labelling standards are essential to tap into the GCC’s promising market.

Abdullah Khalid is a researcher at the Sustainable Development Policy Institue

Dr Amjad Masood is an independent trade policy expert. The article doesn’t necessarily represent the views of any organisation