Pakistan-GCC Free Trade Agreement: Pakistan’s Potential Services Trade with the GCC

This report explores the potential impact of a future Free Trade Agreement (FTA) between Pakistan and the Gulf Cooperation Council (GCC) on services trade. It highlights the growing importance of services in global trade and examines Pakistan’s relatively low share in global services exports and imports, despite notable growth since the early 2000s.
The study identifies key service sectors where Pakistan could expand exports to the GCC, including telecommunications, transport, travel, ICT, construction, healthcare, and education services. It also analyzes the intensive margin of export potential, suggesting significant opportunities for Pakistan to deepen market access in the GCC.
Conversely, the report assesses the potential increase in services imports from the GCC to Pakistan, particularly in transport, business services, insurance, and ICT, and proposes regulatory tools to manage these imports effectively.
The report concludes with policy recommendations for Pakistan’s negotiating strategy, emphasizing the need to leverage cost-effectiveness, skilled labor, and cultural affinity to gain competitive advantage. It also stresses the importance of improving transport logistics, supporting Pakistani firms, and addressing external competition from countries like India, China, and the EU.