ECO region can become powerful economic bloc

FPCCI says intra-regional trade at just 8.75%; vast resources remain underutilised due to trade barriers

KARACHI:

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh has called for revamping and effectively implementing the ECO Trade Agreement (ECOTA) to enhance intra-regional trade and transform the Economic Cooperation Organisation (ECO) region into a more integrated and competitive economic bloc, a statement said on Saturday.

The ECO region currently accounts for only around 4% of global trade, while intra-regional trade stands at approximately 8.75%, significantly below its actual potential, Sheikh said.

The region possesses enormous economic advantages, including vast hydrocarbon and mineral resources, a young and skilled population, strategic road and rail connectivity linking Asia with Europe, and proximity to major markets such as China, India and Russia. However, high tariffs and non-tariff barriers, limited product diversification, difficulties in trade-related payments and regulatory differences continue to constrain regional trade.

Sheikh recalled that ECOTA was signed in 2003 and entered into force in April 2008 with the objective of establishing an ECO Free Trade Area. However, differences in tariff structures, incomplete product lists and concerns regarding equitable benefits have hindered its effective implementation.

"ECOTA should not remain merely an agreement on paper. We need to address the outstanding issues through sustained negotiations and develop a framework that provides balanced and equitable benefits to all member states," the ECO CCI president stated.

He proposed a balanced approach to tariff reductions, greater product diversification and investment to enhance regional competitiveness, and stronger mechanisms for trade-related payments. He also emphasised reducing transaction costs, improving regulatory transparency, facilitating e-commerce and digital trade, and developing regional transport and logistics infrastructure.

Sheikh further suggested utilising the resources of the ECO Trade and Development Bank to support trade finance and regional infrastructure projects.

He stressed that Pakistan, as an active member of ECO and ECO CCI, would continue supporting initiatives aimed at strengthening regional economic integration. "The ECO region has all the ingredients of a powerful economic bloc. What we need is stronger commitment, practical trade facilitation and a modernised ECOTA to convert our vast resources and strategic location into greater trade, investment and shared economic prosperity," he said.