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Pakistan: Faces further delays in US trade talks

Just-style | 22 September 2011

PAKISTAN: Faces further delays in US trade talks

Author: Ahmed Abdullah

As the fifth round of talks on the Pak-US Trade Investment Facilitation Agreement (TIFA) began in Islamabad on Tuesday (20 September), Pakistani delegates have taken a tough stance to demand better trade arrangements with the US.

In particular they want to see the signing of the Free Trade Agreement (FTA) or US$1bn in additional annual apparel export quotas for the US market.

Michael Delaney, assistant United States Trade Representative for South and Central Asia is heading the five-member US delegation, while Commerce Secretary Zafar Mehmood led the Pakistani side.

Former US President George W Bush initially floated the proposal to establish Reconstruction Opportunity Zones (ROZs) in areas bordering Pakistan and Afghanistan. But Pakistan also wants RoZs to be set up in the areas affected by the 2005 earthquake, as well as less developed areas of the country.

Under the ROZs proposal, the US offered direct market access with zero tariffs on products manufactured in the ROZs. The legislation has been approved by the US House of Representatives and now is pending for approval before the US Senate.

The United States is Pakistan’s top export market, accounting for around 19% of total exports. Pakistan’s textile and clothing exports to the US reached $3bn in 2010.

According to a US embassy document, the Pak-US FTA would more than double Pakistani exports to the United States from US$3.6bn to US$6.5bn.