Pakistan seeks U.S. market access to fight extremism
28 Mar 2006
By Simon Cameron-Moore
ISLAMABAD, March 28 (Reuters) - What Pakistan really needs to fight extremism is better access to U.S. markets in order to create jobs, Pakistan’s Commerce Minister Humayun Akhtar Khan said ahead of the opening of a major export fair on Wednesday.
While grateful for aid and arms supplies from the West, Khan voiced frustration with trade policies that left countries such as Pakistan disadvantaged, while they were being urged to do more to combat Islamist militancy resulting from economic deprivations.
He also bemoaned travel warnings that discouraged foreign buyers from coming to Pakistan, and visa difficulties that hindered Pakistani businessmen from visiting markets abroad.
"Now if the sellers can’t visit and buyers can’t visit us, what do you expect us to do? This is a huge challenge to us," said Khan, as Karachi prepared to welcome representatives from 46 U.S. firms among 880 foreign visitors expected at the five-day "Expo-2006" in the southern city.
Duties on high-level industrial goods manufactured by more developed, richer economies were far lower, while duties on low-level industrial products were high, Khan said.
"For example the average tariff on Pakistani goods going to the United States is 10.5 percent. The average tariff all of U.S. imports is 1.5 percent," Khan said.
"They are charging a lot more to nations like ours that really need market access."
Noting Pakistan, and countries like it, accounted for few billion out of a total $1.3 trillion the U.S. imports annually, Khan said Washington could earn far more goodwill at little cost.
The minister reckoned that $1 billion worth of garment exports — textiles and garments account for nearly 60 percent of Pakistani exports — would provide 200,000 jobs, and provide income for 1.2 million people, based on an average Pakistani family size of six.
"Is there a more powerful tool to curb extremism than this? Now what is $1 billion for the United States out $1.3 trillion...Nothing, nothing," Khan argued. Pakistan’s economy is expected to grow around seven percent this year after 8.4 percent last year, and latest trade data show exports up more than 20 percent from a year ago.
But it is burdened by a population of nearly 160 million, and with a gross domestic product put at $2,400 per capita in 2005, Pakistan is only slightly better off than Bangladesh, Cambodia and Mongolia.
"Now if the United States has a deal with us where our exports can go from $18 billion to $30 billion in a few years — imagine the impact it can have, imagine the goodwill," he added.
Pakistan and the United States discussed a bilateral investment treaty during a visit by President George W. Bush to Islamabad earlier this month, but the officials were unable to conclude negotiations due to issues raised by the Pakistani side.
The treaty, a necessary step toward a bilateral free trade agreement (FTA), would be signed in weeks or months, Khan said.
The Pakistani minister said he was in a hurry for talks to commence on a FTA, as President Bush’s fast track authority for such deals was due to expire in mid-2007.
"The U.S. president has the fast track authority right now, but time is running out," Khan said, adding that thereafter it was difficult to predict how the U.S. administration and Congress might receive an FTA with Pakistan.
The Pakistani minister noted that the United States already had FTAs with Morocco, Bahrain and Jordan, and was working on similar accords with several Gulf countries.
"We want to be treated in an identical manner. We are also a moderate Muslim nation. We are at the forefront, we’re a frontline state. We need this help much more."