According to Pakistan’s top diplomat in the UAE, bilateral trading between Pakistan and the UAE is expected to increase from the US$10.6 billion volume attained in 2021-2022. In 2021, overall trading between the UAE and Pakistan was 19.7 billion dirhams (US$5.36 billion), a 23% increase over 2020. The previous calendar year had US$10.6 billion in trade, Pakistan’s highest turnover in the Middle East and North Africa (MENA) region.
Moreover, Pakistan has begun discussions to establish a Comprehensive Economic Partnership Agreement (CEPA) with the UAE to build deeper, more substantial trade and investment connections with one of the region’s most significant countries.
Pakistan and UAE trade ties
The Islamic Republic of Pakistan and the United Arab Emirates have had bilateral relations since the UAE’s inception in 1971. Both countries have had a unique fraternal relationship for 50 years. It is commendable that fraternal relations have evolved into expanding trading in Pakistan by UAE and economic ties. Bilateral relations between the UAE and Pakistan are taking on new dimensions on all political, economic, and social levels, resulting in a trustworthy strategic relationship. The UAE is one of the country’s top investors in the Gulf Cooperation Council (GCC). Still, trading in Pakistan with UAE has been steadily increasing over the years, as have people-to-people relations.
In an interview with Emirates News Agency, Pakistan Ambassador to the UAE, Faisal Niaz Tirmizi, said, “Pakistanis regard the UAE as a second home, and vice versa. The two countries’ close geographical closeness provides an excellent collaboration opportunity.”
Trading between Pakistan and UAE has been beneficial for both economies. Every year, the 1.7 million Pakistani diasporas living in the UAE send approximately $6 billion back to Pakistan, which benefits Pakistan’s economy.
Currently, trading between Pakistan and UAE is over $11 billion, projected to increase to $40 billion in 10 years. Imports and exports in Pakistan to UAE play a significant role in Pakistan’s economy. Pakistan imports refined petroleum, crude petroleum, scrap iron, and other commodities from the UAE and exports clothes, food, meat, cereals, agricultural products, fruits and vegetables, and other items. In 2021, Pakistan exported goods worth $1.17 billion to the UAE.
CEPA an opportunity to increase trading between Pakistan and UAE
The Ambassador acknowledged that Pakistan had begun discussions on the Comprehensive Economic Partnership Agreement (CEPA) with the UAE and that significant progress is expected before the end of the year. The Ambassador told the interviewer, “Yes, we are working on that; it is critical. The Pakistan Ministry of Commerce is in contact with the official authorities in the UAE, and we hope to make major progress on this deal by 2023.” The Ambassador mentioned three areas where Pakistan and the UAE may work together more closely: Fintech, IT, and Startups. He further stated that the UAE is Pakistan’s largest economic partner in the MENA area and that CEPA would significantly enhance trading between Pakistan and UAE. “Last year, our exports climbed to US$3 billion in these industries. We have skilled workers and new businesses. I will be paying great attention to this because I believe there are enormous prospects for increased collaboration between the UAE and Pakistan.”
How can trade with UAE benefit Pakistan?
Trading in Pakistan with the UAE will undoubtedly lead to several prospects with many other countries. The UAE shares land borders with Oman and Saudi Arabia, as well as marine borders with Iran and Qatar. With a population of ten million people, the UAE is home to 15% Pakistanis. With a nominal GDP of $501 billion, the UAE’s product exports are roughly $335 billion, while imports of goods are around $246 billion. The involvement of millions of visitors in Dubai Expo 2020 was a clear testament to the success of its policies and economy, and the UAE organized an incredibly triumphant show.
Pakistan and the UAE are collaborating on a variety of projects. Joint enterprises would undoubtedly strengthen bilateral trade and economic relations between the Islamic brothers. UAE enterprises are doing well in Pakistan, and Pakistani investors have been welcomed to explore commercial and investment opportunities in the UAE. The UAE is a desirable investment location, with a low-tax environment and prospects for investment on both the mainland and free zones. The UAE is rising as a global center for trading in Pakistan, and it is forecast to attract $150 billion in inward investment by 2030.
According to the Ambassador, the UAE has seized the lead in clean energy. “They invest in technology and projects such as solar, wind, and other renewables.” He further stated, “Pakistan will cooperate closely with the UAE, and you will see the fruits of these conversations that have already begun between the two countries very soon,” he continued. We will see a large renewables project in Pakistan.
