Pakistan, UK move toward FTA

April 02, 2026 (MLN): Pakistan and the United Kingdom are moving toward deeper economic integration, with both sides considering a long-term Free Trade Agreement (FTA) as bilateral trade engagement gains momentum amid global economic and energy uncertainties.

The development emerged during high-level talks in Islamabad, where officials from both countries reviewed progress under the Pakistan UK Trade Dialogue and agreed to expand sectoral cooperation, according to the press release.  

The proposed FTA was described as a natural next step in strengthening trade ties, showing growing commercial engagement between the two economies.

Discussions also focused on activating dedicated working groups in key sectors, including IT, agriculture, healthcare and life sciences, professional services, and education and skills.

These sectors are seen as critical for boosting exports, enhancing value addition, and improving market access, particularly as Pakistan seeks to diversify its export base and attract foreign investment.

Pakistan reiterated its commitment to structural reforms aimed at improving the business climate.

Highlighted ongoing tariff rationalization and regulatory adjustments designed to enhance competitiveness and create a more predictable investment environment.

Emphasis was placed on policy consistency as a key factor in sustaining long-term investor confidence.

On the UK side, concerns were raised regarding proposed changes to Pakistan’s intellectual property framework, with a call for greater policy clarity and transparency.

The importance of timely consultations with stakeholders was stressed to ensure that international businesses remain confident in Pakistan’s regulatory direction.

Both sides also reviewed progress on the registration of Geographical Indications (GI) and trademarks for Pakistani basmati rice, an issue with direct implications for export branding and market protection in international markets.

Beyond trade, the talks addressed rising risks in global shipping routes, particularly around the Strait of Hormuz.

Pakistan highlighted the impact of increased maritime charges on its export competitiveness and called for a more balanced assessment of risk premiums affecting regional trade flows.

The engagement concluded with an understanding to continue close coordination on trade, energy, and regional stability, as both countries navigate a complex global economic environment marked by supply chain disruptions and elevated geopolitical risks.

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