Trade Opportunities, Competitiveness, and Trade Potential in Pakistan: An Analysis of GCC Regional Countries

Abstract

Pakistan and GCC region share a common religion and cultural characteristics, increasing their importance to Pakistan regarding trade policy. To promote economic, cultural, and technical cooperation with GCC members, Pakistan is committed to signing a free trade arrangement with GCC. This paper aims to examine Pakistan's trade opportunities, competitiveness, and trade potential in the GCC region during 2003-2017. The result shows that Pakistan has the maximum comparative and competitive advantage with Bahrain, Saudi Arabia, and UAE amongst GCC countries. PPML shows that the main trade indicators responsible for Pakistan’s bilateral trade enhancement are GDP in both countries and partner country trade openness. Amongst the GCC countries, Pakistan has the highest trade potential with Bahrain, Kuwait, and Qatar. In contrast, with UAE and Saudi Arabia, Pakistan has a lower trade potential than the rest of the countries. Therefore, Pakistan needs to sign FTA with GCC before boosting their mutual trade and cooperation.