Fozia Azam

In a bid to accelerate economic growth and foster international trade relations, Pakistan is actively considering negotiating, signing, and ratifying a series of free trade agreements (FTAs), double taxation treaties, and international investment agreements with several countries. Under the Investment Policy 2023, Pakistan intends to engage in these agreements that reflect its commitment to creating a more favourable business environment and attracting foreign direct investment (FDI) into the country. The initiative aims at establishing stronger ties with its global partners to capitalise on the potential trade benefits and spur economic activity. The negotiation and signing of free trade agreements (FTAs) will provide an avenue for Pakistan to enhance its trade competitiveness internationally.

These agreements aim to reduce tariffs and trade barriers, opening up new markets for Pakistani goods and services. By expanding export opportunities, it is anticipated that Pakistan's economy will thrive and grow significantly. Additionally, Pakistan's consideration of double taxation treaties demonstrates its commitment to creating a conducive environment for foreign investors, as these treaties help eliminate or minimise the burden of double taxation on individuals and businesses engaged in cross-border activities. The double taxation treaties promote investment by providing tax certainty and enhancing the attractiveness of Pakistan as an investment destination. Furthermore, the intention to negotiate and ratify international investment agreements showcases Pakistan's dedication to safeguarding foreign investments and providing legal protection to investors.

These agreements will establish clear rules and regulations, offering stability and transparency in investment regimes. This step is crucial in boosting investor confidence and attracting foreign capital to drive economic growth. The initiative underscores Pakistan's practical approach to economic development through stronger international collaboration. As Pakistan moves forward with its plans, it anticipates reaping the rewards of increased trade volumes, job creation, technology transfer, and overall economic progress. These agreements are expected to serve as catalysts for pushing Pakistan towards becoming a hub of economic activity, attracting both domestic and foreign investment.

Pakistan's determined approach to accelerating economic growth through the negotiation, signing, and ratification of FTAs, double taxation treaties, and international investment agreements exemplifies its commitment to creating a dynamic and globally connected economy, poised for sustained development and prosperity. Experts believe that free trade triggers rapid economic growth. Focusing on exports and resources with a strong comparative advantage can help attract foreign investment capital and provide relatively high-paying jobs for local workers. According to data released by the Pakistan Bureau of Statistics (PBS), Pakistan's trade deficit surged to an all-time high of $48.66 billion in the fiscal year 2021-2022, up from $30.96 billion in 2019-2020, representing a 57% increase. Pakistan's import bill increased by 43.45% to $80.51 billion in 2021-2022, up from $56.12 billion in 2019-2020.

Credit: INP-WealthPk