The Research and Policy Division of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has prepared a report on the Economic and Trade Relations between Pakistan and Saudi Arabia. The report indicates that Saudi Arabia is an important country for Pakistan and both countries enjoying geographical proximity, historical relations and religious affinity. Bilateral trade between both nations is below potential and stands at US$ 3.5 billion. Pakistan mainly imports petroleum products, plastic goods, organic chemical and fertilizer from Saudi Arabia and exports cereals, meat, textile, beverages, edible fruit and vegetable to Saudi Arabia, the report stated.
The report further reveals that there are huge potential available for enhancement of bilateral trade and investment relations. The enhancement of bilateral relations with Saudi Arabia is also the priority for the Government which reflects from the visits of Prime Minister of Pakistan to Saudi Arabia and Saudi Prince’s visit to Pakistan and signing of various MoUs for enhancement of relations in trade, energy, commerce, investment and other fields. The report indicates that Pakistan has potentials to enhance its exports to Saudi Arabia in textile, pharmaceutical, rice, sea food, meat, edible fruits and vegetable, dairy products, leather goods and information technology.
The report also identifies trade barriers that create hindrance in exports to Saudi Arabia related to compliance of standards, lack of information, lack of commercial activities etc between both nations. The report suggests that Pakistan and Saudi Arabia should formulate a strategy for mutual recognition of standards for exports of surgical instrument, food items and pharmaceutical goods as there is a huge demand of these products in Saudi Arabia. Both the nations should formulate a mechanism to reduce non-tariff measures which are faced by Pakistan in exporting agriculture products to Saudi Arabia. The report added that Pakistan may negotiate to initiate formal trade pack or agreement in terms of tariff concession for enhancement of trade. The report suggests that Pakistan and Saudi Arabia should sign bilateral investment treaty in view of removal of complex investment procedures and avoid of taxation complications
The report has suggested activation of Joint Business Council of both countries and holding of business people to people contact, formulation of trade delegations and participation in trade fairs. The Trade Mission of both nations should also play their due role in enhancement of bilateral trade. The report also suggests signing of an agreement with Saudi Arabia related to exchange of skilled workers and promotion of tourism as the process of economic development in Saudi Arabia is going on which indicates an increasing demand of skilled labor force in Saudi Arabia.