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November 7, 2026

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Business & Money

Pakistan presses Saudi Arabia for early signing of Gulf free trade deal

Faizan Altaf

Pakistan has asked Saudi Arabia to help speed up the signing of a long-delayed free trade agreement with the Gulf Cooperation Council, in the latest push to turn a close political relationship into bigger trade. The request came during a meeting in Islamabad on Saturday, 31 October, between Federal Minister for Commerce Jam Kamal Khan and Saudi Arabia’s newly appointed ambassador to Pakistan, Dr Rajeh Albugamy.

The agreement, known as the Pakistan-GCC Free Trade Agreement, has been more than two decades in the making. Negotiations were finished in 2023, Pakistan completed its own approval process and sent the approved text to the GCC Secretariat on 31 December 2025, and yet the deal still has not been signed.

For Pakistan, the stakes are practical. Trade with Saudi Arabia alone was worth $4.75 billion in the last fiscal year, but almost all of it flowed one way. Pakistan imported about $4.06 billion worth of goods, mostly oil, and exported only $687 million.

At a glance

What happened: Commerce Minister Jam Kamal Khan met Saudi Arabia’s new ambassador, Dr Rajeh Albugamy, in Islamabad on Saturday, 31 October, and discussed the early signing and implementation of the Pakistan-GCC Free Trade Agreement, along with wider trade, investment and agricultural cooperation.

Why it matters: The deal has been negotiated since 2004 and finalised since 2023, but it still has not been signed. Pakistan’s exports to Saudi Arabia fell in the last fiscal year, and the government wants better market access for exporters.

What happens next: Both sides agreed to keep meeting regularly. Pakistan is also pressing Qatar and other Gulf states to support an early signing.

What was discussed in Islamabad

The meeting was the new Saudi ambassador’s first call on the commerce minister since taking up his post, and it covered the full sweep of the economic relationship. According to the Associated Press of Pakistan, Jam Kamal Khan told the ambassador that Pakistan had worked over the past three years to strengthen ties through government-to-government, business-to-business and people-to-people engagement.

The minister pointed to two things that make this a good moment for a trade push. The first is Saudi Arabia’s Vision 2030 programme, the kingdom’s plan to diversify its economy away from oil, which is creating demand for food, manufactured goods and services. The second is Pakistan’s own production and industrial capacity, which the minister said could help meet the requirements of the Saudi market.

The two sides talked about working together to scale up production, improve product quality, adopt modern technologies and strengthen industrial competitiveness. The minister also stressed the need to widen Pakistan’s export base and to give the private sector a bigger role, so that the growing engagement between the two governments turns into real trade.

Ambassador Albugamy reaffirmed what both sides routinely call the historic bonds of brotherhood between the two countries and assured Pakistan of continued Saudi support for stronger economic ties. He pointed in particular to regional connectivity and agriculture as areas where the two countries could do more together. He also committed to staying in close contact with the Ministry of Commerce to find new areas of cooperation.

The free trade agreement was the centrepiece. Both sides discussed the Pakistan-GCC Free Trade Agreement and its early signing and implementation, and the minister said the deal would improve market access, expand bilateral trade and deepen economic engagement. They agreed to maintain regular coordination and follow-up meetings to advance trade, investment and agricultural partnerships.

A deal 22 years in the making

The Pakistan-GCC free trade agreement is one of the longest-running trade negotiations in Pakistan’s history. It began in August 2004, when Pakistan and the GCC signed a framework agreement to explore the possibility of a free trade deal. The GCC’s six members are Saudi Arabia, the United Arab Emirates, Bahrain, Oman, Qatar and Kuwait. After that promising start, only a handful of negotiation rounds took place, and the talks went quiet for a long stretch before being revived in 2021.

The breakthrough came in Riyadh in September 2023. Pakistan and the GCC concluded the final round of negotiations from 26 to 28 September 2023, and a joint statement was signed by Pakistan’s then commerce minister, Dr Gohar Ejaz, and the GCC Secretary General, Jasem Mohamed Albudaiwi. Pakistan’s Press Information Department said at the time that the agreement would be the first free trade agreement signed by the GCC with any country since 2009.

The investment chapter was finalised in December 2023 after Pakistan’s cabinet revised its investment template to include three international arbitration bodies: the International Centre for Settlement of Investment Disputes, the Permanent Court of Arbitration and the Dubai International Arbitration Centre. Under the agreed approach, investors would have eight months to settle a dispute locally before it could be taken to an international court.

That was almost three years ago. Since then, the agreement has moved through the slow machinery of approvals on both sides. Pakistan completed its domestic approval process and forwarded the approved text to the GCC Secretariat on 31 December 2025. What remains is for the GCC side to complete its own formalities and for the agreement to be signed, ratified and brought into force.

Why Pakistan is pushing now

The Islamabad meeting did not happen in isolation. A week earlier, Pakistan made the same case in Doha. At the second meeting of the Pakistan-Qatar Joint Task Force on Trade and Investment on 24 October, Commerce Minister Jam Kamal Khan asked Qatar to support the early signing of the agreement and to help complete the remaining formalities. Qatar’s Minister of State for Foreign Trade Affairs, Dr Ahmad bin Mohammed Al-Sayed, co-chaired that meeting.

The Doha meeting shows how Pakistan is running the campaign. The joint task force, whose secretariat is Pakistan’s Special Investment Facilitation Council, reviewed progress since its first session in April 2026 and looked at practical steps to increase trade, encourage investment and build industrial partnerships across agriculture, food security, manufacturing, information technology, maritime transport and infrastructure.

Pakistan also used the Doha meeting to push for the early setting up of 11 technical working groups covering logistics, aviation, advanced manufacturing, mining and minerals, agriculture, tourism, financial technology, healthcare, education, industrial development, information technology and startups. The third meeting of the task force is due to be hosted by Pakistan.

For Islamabad, the argument for urgency is straightforward. The agreement has already been negotiated, finalised and approved on Pakistan’s side. Every month without a signature is a month in which Pakistani exporters face the same tariffs and barriers as before, while competitors with their own trade deals enjoy easier access to Gulf markets.

What the numbers say

The trade figures explain why the government is so keen. Pakistan’s bilateral trade with Saudi Arabia was worth $4.75 billion in fiscal year 2025-26, according to government sources reported by TechJuice in August. That was down 0.27 percent from $4.76 billion the previous year, a small fall driven by a drop in Pakistani exports.

Pakistan’s imports from Saudi Arabia rose by about 1 percent to roughly $4.06 billion, from $4.04 billion in fiscal year 2024-25. Most of that is oil and petroleum products, along with petrochemicals and fertilisers. Pakistan’s exports to Saudi Arabia, by contrast, fell by about 5 percent, from $724 million to $687 million.

That leaves a trade deficit of about $3.37 billion with Saudi Arabia alone. In other words, Pakistan buys nearly six times as much from Saudi Arabia as it sells there. The imbalance is not new, but the fall in exports last year made it worse, and it is the backdrop to every trade conversation between the two countries.

Agriculture is where Pakistan sees the clearest chance to sell more. In August, the two countries agreed to raise Pakistan’s agricultural and food exports to Saudi Arabia to $3 billion over two years. The target was set during a visit to Islamabad from 26 to 28 August by a Saudi delegation led by the kingdom’s environment, water and agriculture minister, Engineer Abdulrahman Al-Fadley.

The starting point is modest. Pakistan supplied about 169,000 tonnes of rice to Saudi Arabia in 2025, worth around $163 million, and about 30,000 tonnes of red meat a year, worth around $167 million. Together those two items are worth about $330 million, less than half of Pakistan’s total exports to the kingdom. Reaching $3 billion in farm and food exports would mean more than quadrupling what Pakistan currently sells to Saudi Arabia in total.

What exporters stand to gain, and what stands in the way

A free trade agreement with the GCC would matter to Pakistani exporters in two ways. The first is market access: lower tariffs on Pakistani goods entering the six Gulf states, which together form one of the world’s richest consumer markets and are home to millions of Pakistani workers. The second is predictability: a formal agreement gives exporters and investors a stable set of rules instead of arrangements that can change with each budget or policy shift.

Textiles, rice, meat, fruit, leather goods and surgical instruments are among the products Pakistan already sells to the Gulf, and all of them could benefit from lower duties. The agreement’s investment chapter, with its dispute-settlement rules, is also meant to reassure Gulf investors who want to put money into Pakistan, whether in agriculture, food processing, mining or manufacturing.

But a signature alone will not fix the problems that have held Pakistan’s exports back. Quality certification is one of them. Gulf buyers have strict standards for food safety and product quality, and Pakistani exporters have often struggled to meet them consistently. The August agriculture talks put mutual recognition of quality certificates on the agenda for exactly this reason.

Another problem is supply. Getting farm goods to Gulf markets in the right quantities, at the right time and in the right packaging needs cold storage, reliable transport and better processing. The Doha meeting discussed cold-chain infrastructure, grain storage, silos and modern farming technology, all of which are part of the same puzzle.

Then there is the question of what the agreement actually covers. The details of the final text have not been published, so it is not yet clear which products will get lower tariffs, how quickly the cuts will apply, or what rules will govern services and investment. Exporters will need those details before they can plan around the deal. Even if the agreement is signed soon, ratification and implementation will follow, and businesses will need time to adjust.

What happens next

The immediate next step is more meetings. Both sides in Islamabad agreed to regular coordination and follow-up, and the Saudi ambassador committed to close engagement with the Ministry of Commerce. The Pakistan-Qatar task force will also keep working, with Pakistan due to host the third meeting.

Watch for three things. The first is any announcement of a signing date for the agreement, which would be the clearest sign that the GCC’s internal formalities are complete. The second is movement on the agriculture target, especially rice and meat shipments, which are the most measurable part of the trade push. The third is whether Gulf investment follows the trade talks, since the investment chapter was designed to encourage exactly that.

Frequently asked questions

What is the Pakistan-GCC Free Trade Agreement?

It is a proposed trade deal between Pakistan and the Gulf Cooperation Council, whose six members are Saudi Arabia, the United Arab Emirates, Bahrain, Oman, Qatar and Kuwait. It aims to lower tariffs and other barriers so that goods, services and investment can flow more easily between Pakistan and the Gulf states. Negotiations were concluded in September 2023, and the agreement includes a chapter on investment protection.

Why has the agreement taken so long?

The idea dates back to a framework agreement signed in August 2004, but only a few rounds of talks took place in the years that followed, and the dialogue was only revived in 2021. After the main negotiations were finished in September 2023, Saudi Arabia asked for an investment chapter to be added, which was finalised in December 2023. Pakistan sent its approved text to the GCC Secretariat on 31 December 2025, and the agreement is now waiting on the GCC side’s formalities.

How big is trade between Pakistan and Saudi Arabia?

Total bilateral trade was $4.75 billion in fiscal year 2025-26. Pakistan imported about $4.06 billion worth of goods, mostly oil, and exported only $687 million, leaving a deficit of about $3.37 billion. Pakistan’s exports to Saudi Arabia fell by about 5 percent that year, from $724 million the year before.

What would the deal mean for ordinary Pakistanis?

If it works as intended, it could mean more orders for Pakistani farmers, food processors, textile makers and other exporters, and more jobs in those industries. It could also encourage Gulf investment in Pakistan. But the benefits will depend on the details of the final text, which have not been published, and on whether Pakistani businesses can meet Gulf quality standards.

What is the $3 billion agriculture target?

Pakistan and Saudi Arabia agreed in August 2026 to raise Pakistan’s agricultural and food exports to the kingdom to $3 billion over two years. Rice, red meat, fruit, green fodder and water-efficient farming technology were named as priority areas. Pakistan currently exports about 169,000 tonnes of rice worth around $163 million a year to Saudi Arabia, plus about 30,000 tonnes of red meat worth around $167 million.

Conclusion

The meeting in Islamabad on 31 October was, on its face, a routine diplomatic courtesy: a new ambassador calling on a minister. But the subject matter was anything but routine. Pakistan is asking its closest Gulf partner to help finish a trade deal that has been 22 years in the making, at a moment when its exports to Saudi Arabia are falling and its trade deficit with the kingdom is widening.

The case for the agreement is strong. The negotiations are done, Pakistan’s approvals are done, and the potential gains for exporters are clear, especially in food and agriculture. Every year without the deal is a year in which Pakistani businesses compete in Gulf markets at a disadvantage.

Whether the push succeeds will be decided in Gulf capitals, not in Islamabad. What Pakistan can control is the follow-up: keeping the meetings going, fixing the quality and supply problems that hold exporters back, and making sure that when the deal is finally signed, Pakistani businesses are ready to use it.

This article is for general information and education only. It is not legal or financial advice.

Sources

Faizan Altaf

Faizan Altaf is the founder and author of findivoza.com, a news blog covering world, Pakistan, business, technology, health and sport in plain English. He writes for general readers who want clear, trustworthy news without jargon. His work focuses on explaining what happened, why it matters, and what to watch next.

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