New govt must negotiate FTA with GCC nations for perfection of significant investment relations
Interview with MR KHALID TAWAB – Chairman, Tawab Group of Companies
PAGE: Tell me something about yourself and your organization, please:
Khalid Tawab: I am Chairman of Tawab Group of Companies, which is a renowned name in the manufacturing of paper, board and steel. I have served as Senior Vice President and Vice President of FPCCI and Karachi Chamber. I am honorary Consul General of Mozambique since 1989. President of Pakistan awarded me Sitara-e-Imtiaz in 2009 in recognition of my outstanding public services. My company got two time FPCCI Exports Awards and one time International Asia Award due to highest exports. I am also philanthropist and trustee of Aiwan-e-Tijarat-o-Sanat Hospital.
PAGE: How would you comment on the trade relations between Pakistan and Gulf Cooperation Council countries?
Khalid Tawab: Pakistan has strong historical, cultural, religious, economic and strategic ties with Gulf Cooperation Council (GCC) countries since independence. There is a significant trade relation between Pakistan and GCC. Pakistan is mainly dependent on Saudi Arabia and UAE for imports of oil and Qatar for LNG imports. Pakistan’s exports to GCC are agriculture products, leather, edible fruit & vegetables and textile commodities. At present, the trade between Pakistan and GCC stands at US$ 18.24 billion with Pakistan’s export to GCC at US$ 1.7 billion and imports from GCC at US$ 16.54 billion. All GCC member countries enjoy trade surplus with Pakistan. For the enhancement of trade relations, Pakistan initiated Free Trade Agreement (FTA) with GCC countries in 2006, which has not been yet finalized.
As the current government is very much keen to enhance relations with Saudi Arabia, UAE, Qatar and other Gulf countries, it is expected that the negotiation on FTA with GCC countries might start again.
PAGE: How could Pakistan increase its exports to Gulf Cooperation Council countries?
Khalid Tawab: There is huge potential for increasing Pakistan’s export to Gulf Cooperation Council countries particular with Saudi Arabia, UAE and Qatar. There are exports potential available to these countries in textile apparel, iron, steel, machinery, leather, cereal, copper, edible fruits, vegetable, sea food, organic chemicals, meats etc. The exports to these countries can be increased by aggressive marketing and holding of commercial activities like holding of exhibitions, formulation of trade delegation on reciprocal basis. Moreover, Pakistan needs to improve the quality of products as GCC region has its own standards and technical requirements for imports of medicine, surgical items and agriculture products on bilateral and multilateral basis.
PAGE: How could Pakistan cater to the market of Gulf Cooperation Council countries in terms of the products, which are being imported from other countries? Is it dependent on quality and price?
Khalid Tawab: Pakistan can cater to the Gulf Cooperation Councils countries by aggressive marketing and improving standards and quality of products. Pakistan needs to negotiate with Saudi Arabia and UAE to allow the export of edible fruits and vegetables during the season. Pakistan produces a wide range of exotic fruits and vegetables, which are highly demanded in international market. All GCC countries have their own standards, testing and certification requirements particularly for imports of pharmaceutical products, chemicals, agricultural. If Pakistan wants to enhance its exports to GCC which GCC countries currently import from India and other countries, Pakistan must improve the quality and economy of scale of its products. Moreover, Pakistan needs to maintain standards and develop laboratories for testing and sign agreement with GCC countries for mutual recognition of standards.
PAGE: Do you think the government seems serious to increase its bilateral trade with Gulf Cooperation Council countries?
Khalid Tawab: The Government of Pakistan is very much keen to increase its trade with Gulf Cooperation Council countries. In this connection, the Prime Minister with his economic team has visited Saudi Arabia, UAE and Qatar. For the enhancement of trade, Pakistan has negotiated the imports of crude oil with UAE and Saudi Arabia. Now there is a need that GCC must give market access to traditional products of Pakistan which they are importing from our regional competitors. The GCC countries are important for trade. Pakistan is significantly contributing in their economy by providing human resource. Around four million Pakistanis are working in GCC countries.
PAGE: How does the business community see the Gulf Cooperation Council countries for export?
Khalid Tawab: The business community of Pakistan considers Gulf Cooperation Council a very lucrative market for exports of goods and services. GCC countries are a big market for Pakistani products with 54 million population and US$ 3.46 trillion GDP. Pakistan can provide market access to GCC countries for trading with Central Asian countries at low cost. For the enhancement of Pakistan’s export, Pakistan needs to sign trade agreement with GCC, which allows exports of Pakistani products to GCC on concessionary rates and also removes trade barriers. Since 2006 Pakistan has been negotiating FTA with GCC region but has not yet finalized. If Pakistan signs this agreement, there will be common tariff, common customs law, customs procedures, common law on anti-dumping, countervailing and safeguard measures etc. for exports of Pakistani products to GCC. Apart from trade, there is significant investment relations between Pakistan and GCC. GCC has made significant investment in telecommunication sector, real estate, transport, steel and financial sector and getting benefits of business friendly investment policy of Pakistan.