SEOUL, Aug 21, 2026: Pakistan and South Korea have completed the first round of negotiations on a Comprehensive Economic Partnership Agreement (CEPA), opening the way for a second round of talks while six business-to-business memoranda of understanding were signed at a Pakistan-Korea Trade and Investment Conference in Seoul.
Pakistan's Ministry of Commerce said the Seoul conference brought together more than 170 Pakistani and Korean businesspeople and resulted in six B2B MoUs between companies from the two countries. Commerce Minister Jam Kamal Khan, addressing the conference by video link, said the first round of CEPA negotiations had been successfully concluded and the second round was expected soon. He said finalising the agreement would open new avenues for Pakistani exporters and further strengthen bilateral economic cooperation.
وزیر تجارت جام کمال خان نے سیئول میں پاکستان-کوریا بز نس کانفرنس سے ویڈیو لنک پر خطاب کیا۔سیئول کانفرنس میں 170 سے زائد پاکستانی و کوریائی کاروباری افراد شریک ہوئے۔کانفرنس میں پاکستان کی ٹیکسٹائل، لیدر، سرجیکل، اسپورٹس، زرعی مصنوعات اور آئی ٹی کی برآمدی صلاحیت اجاگر کی گئیں۔… pic.twitter.com/LEnuqVmgz0
— PTV News (@PTVNewsOfficial) August 20, 2026
The development marks a significant step in negotiations that began in January 2025, when Pakistan and South Korea formally launched talks for an Economic Partnership Agreement. Pakistan's Press Information Department said at the time that the proposed agreement was intended to promote trade in goods and services, economic cooperation and supply-chain resilience. South Korea's Ministry of Trade, Industry and Resources has subsequently described CEPA as an important framework for expanding trade and investment between the two countries.
Trade remains heavily tilted toward South Korea
The economic case for the agreement is particularly significant because bilateral trade remains small relative to the size and capabilities of the two economies. According to 2025 UN Comtrade data, Pakistan's exports to South Korea were $164.95 million, while Pakistan's imports from South Korea reached $1.26 billion, producing a Pakistani trade deficit of roughly $1.10 billion.
The composition of Pakistan's exports also indicates areas where greater Korean market access could matter. UN Comtrade data show that Pakistan's leading exports to South Korea in 2025 included cotton worth about $29.7 million, oilseeds and related products at $27.5 million, salt, sulphur, earth and stone products at $20.1 million, knitted apparel at $15.8 million, beverages at $14.8 million and fish and other aquatic products at $12.6 million.
Pakistan's imports from South Korea, meanwhile, are considerably more diversified and industrial in character. UN Comtrade data show that in 2025 Pakistan imported about $519.14 million of vehicles, $116.40 million of iron and steel, $111.71 million of plastics, $99.12 million of machinery and $90.03 million of mineral fuels and oils from South Korea.
Why market access matters for Pakistan
This imbalance is one of the reasons market access will be central to the negotiations. A feasibility study prepared by the Policy Research & Advisory Council (PRAC) found that Pakistan had preferential access to only about 20% of South Korea's tariff lines, while countries including Vietnam, India and Indonesia had secured zero tariffs on more than 80% of tariff lines under their respective agreements with Seoul. The study said Pakistan's limited preferential access was restricting the competitiveness of its products in the South Korean market.
The PRAC study proposed priority concessions covering 669 tariff lines for Pakistani exports, alongside a broader concession structure and a protection list for sensitive Pakistani imports. The study proposed 5,150 tariff lines for concessions in three categories, while identifying 1,606 tariff lines for protection from concessions in order to shield domestic industries from early competition.
What the CEPA could change
The potential economic effect is substantial, but it should be understood as a modelled projection rather than a promise contained in the agreement under negotiation. Using Computable General Equilibrium modelling under the GTAP framework, PRAC estimated that a Pakistan-South Korea FTA could increase Pakistan's exports by 306.99%, equivalent to an additional $571 million, over five years from the study's 2023 baseline. Imports were projected to increase by 71.38%, or an additional $586 million, while total bilateral trade was projected to reach approximately $2.164 billion, a 114.9% increase.
Because that model uses 2023 trade as its starting point, its projected export figure of roughly $757 million should not be presented as a forecast from today's actual trade level. The 2025 UN Comtrade data show that Pakistan's exports to South Korea were $164.95 million and imports $1.26 billion, meaning that the present baseline has changed since the PRAC model was constructed. The study nevertheless provides a quantitative indication of the scale of improvement that could be possible if substantially better market access were secured.
Why South Korea sees an opportunity
South Korea's own trade ministry sees an economic rationale on its side as well. The ministry said when negotiations were launched that Pakistan's strategic location, large population, young workforce and natural resources made it a promising market, and that expanding trade and investment could provide Korean companies with new export opportunities while contributing to Pakistan's economic development. The ministry also identified Pakistan's digital, IT and automotive industries as areas offering potential for cooperation.
Trade Minister Yeo Han-koo of #MOTIR held a virtual meeting with Pakistan’s Federal Minister for Commerce Jam Kamal Khan on April 30, 2026, to discuss ways to advance #Korea–#Pakistan #CEPA negotiations and expand bilateral trade and investment cooperation. pic.twitter.com/bwW8yrQ3TS
— MOTIR - Korea (@MOTIRKoreaEng) May 6, 2026
The South Korean trade ministry has subsequently said that bilateral trade remains limited relative to Pakistan's market potential and that the CEPA is intended to provide a practical framework for expanding trade and investment. It has also said the agreement could help Korean companies enter Southwest Asian markets.
Where Pakistan can expand its exports
For Pakistan, the strategic opportunity therefore extends beyond simply selling more goods in South Korea. Pakistan's Ministry of Commerce has identified textiles and apparel, leather, surgical and sports goods, agro-food, minerals and information technology as areas with export potential. The Seoul conference and six B2B MoUs provide an indication that private-sector engagement is developing alongside the government negotiations.
The Ministry of Commerce said the six MoUs cover areas including salt, cosmetics, oil and sesame-seed trade. The ministry said the agreements could provide a foundation for further commercial cooperation between companies from the two countries.
The PRAC study's analysis indicates that a successful trade agreement would need to do more than reduce headline tariffs. It identifies non-tariff measures, investment integration, technology transfer, industrial development and infrastructure as important complementary elements if Pakistan is to convert improved Korean market access into sustainable export growth.
That consideration is particularly important because the present trade imbalance means that simply increasing two-way trade would not necessarily improve Pakistan's position. The PRAC model provides one possible scenario: it projects Pakistani exports growing proportionately much faster than imports, which could significantly narrow the imbalance if the assumptions underlying the model are achieved.
The longer-term strategic significance could lie in investment and industrial cooperation as much as merchandise trade. South Korea's Ministry of Trade has identified Pakistan's manufacturing expansion and infrastructure development as areas of potential, while PRAC's study says an investment-focused agreement could support technology transfer, industrial growth and infrastructure development.
For Pakistan, the attraction is therefore twofold: gaining better access to a technologically advanced, highly export-oriented economy while seeking Korean investment and industrial know-how. For South Korea, Pakistan offers a large emerging market and a geographical position that the Korean trade ministry has identified as relevant to broader Southwest Asian market opportunities.
The strategic test for Pakistan
The next negotiations will consequently be important not simply because they determine the tariff concessions available to Pakistani exporters, but because they will help determine whether the eventual CEPA addresses the structural barriers that have kept bilateral trade below its potential. The Korean government has said the negotiations cover areas including goods, rules of origin, economic cooperation, investment, intellectual property rights and trade remedies.
The immediate signs are encouraging: the first negotiating round has been completed, a second round is expected, and six private-sector MoUs have emerged from the Seoul conference. But the the economic analysts were of the view that the ultimate test of the CEPA will be whether it can translate these negotiations into a sustained increase in Pakistani exports, greater Korean investment, technology partnerships and a narrower trade imbalance — outcomes that will depend on the final concessions and on the ability of businesses on both sides to exploit them. Pakistan's Commerce Ministry has said the agreement, once finalised, would open new avenues for Pakistani exporters and strengthen bilateral economic cooperation.
