Pakistan could loose its biggest market, as the European Union has declining to sign a free trade agreement (FTA) with it, arguing that Pakistan''s economy is not big enough for such a deal.

According to a report in the Pakistni daily, The Dawn, with the EU''s refusal to sign the FTA, Pakistan would be the only country in the region in the coming years to lose its biggest market.

The Dawn quoted n unidentified Pakistani official as saying, "Pakistan''s reliance on the EU market and the US is too much and in case the EU market is lost, Pakistan would stand nowhere with regard to exports."

On the other hand, the EU has decided to ink a FTA with India that would facilitate greater demands for Indian products at zero duty.

"Right now apart from India and Pakistan, all the SAARC countries as LDC contracting states are exporting their products to EU at zero duty and in case the FTA deal is struck with New Delhi, Indian products would also enjoy zero duty and capture the market of Pakistani products also. This is really an alarming situation for Pakistan," the official told The Dawn.

Islamabad has communicated to Brussels that Pakistan is the frontline state against terrorism and in case trade cooperation is not extended to Pakistan, terror activities would further increase because of poverty in the country.

"The poverty situation would worsen in the country if trade under the FTA is denied," the daily quoted a Pakistan foreign office officials as saying.

According to Pakistan''s commerce secretary Asif Shah said commerce minister Humayun Akhter Khan would soon visit EU countries separately to allay their misgivings On the size of Pakistan''s economy.

Shah said the EU in response to Pakistan''s request for the FTA has communicated that it frames FTAs with countries keeping in view its economic considerations. He said the EU is of the view that since Pakistan''s tariff regime is liberalised, it does not need a trade deal with Islamabad.

Shah said that Pakistan had succeeded in convincing EU''s top officials that Pakistan''s economy was growing rapidly in the region and the size of the economy was also expanding.