US report urges tariff cut on textiles: Free trade agreement with Pakistan should be part of new strategy
WASHINGTON, March 25 Trade will be a valuable part of the new US strategy for fighting terrorism in Pakistan, says America`s top business lobby which also called for a cut in US tariffs on Pakistani textiles.
President Barak Obama is expected to announce the new strategy on Friday.
In a report issued on Tuesday evening, the US Chamber of Commerce and the US-Pakistan Business Council called for talks on a free-trade agreement with Pakistan and also highlighted the problems undermining the country`s economic growth.
The United States is the largest investor and market for Pakistan.
Total trade between the countries had shot up to $5.6 billion last year from $2.6 billion in 2001, the year Pakistan joined the US-led war on terror following the Sept 11 terrorist attacks.
The two business groups said that stronger economic ties with Pakistan would help advance America`s geopolitical goals in South Asia.
The report sought a review of US tariff policy on Pakistan, saying that duties on Pakistani textiles
were higher than those from other key producers.
The groups backed a proposal by Senator Maria Cantwell and Congressman Chris Van Hollen for a duty-free import of certain products from the Pak-Afghan border regions.
“In addition to its strategic elements, a broad-based relationship with Pakistan needs to include enhanced cooperation in the areas of trade and investment and energy security,” said Myron Brilliant, the US Chamber`s senior vice-president of International Affairs and member of the board of directors of the US-Pakistan Business Council. “We are actively working with both governments to strengthen our economic ties.”
The chamber noted that greater trade engagement with Pakistan would create new opportunities for US businesses and jobs in both countries.
It urged the Obama administration to work with Pakistan to boost intellectual property rights protection to foster US private sector investment in the country.
“Our report also urges US government officials to work with Pakistan to address bilateral trade and investment opportunities,” said Jay Collins, the chairman of the board of directors of the USPBC.
“Our members stand ready to contribute to efforts to expand commercial relations between the two countries.”
Key recommendations for the Obama administration and members of Congress include
Obtain passage of US foreign assistance legislation showing that the United States is committed to
ensuring Pakistan`s long-term prosperity.
Address unfair trade and investment practices with Pakistan to ensure that American companies find a level playing field.
Approve legislation creating Reconstruction Opportunity Zones to promote economic development in Pakistan.
Conclude a high-standard bilateral investment treaty with Pakistan to provide safeguards for US investors.
Pakistan is fast losing US market share in key products as its textile exports have been far weaker than those of China, India and Bangladesh during the US fiscal year 2009, which ends in October. Lower textile and clothing exports will inevitably filter into lower total exports as textile is the largest component of the country`s trade, around 55 per cent.
The estimated total export of the country for the current fiscal year is $18 billion against the
targeted export of $21.5 billion.
The joint report reminded US investors that with a population of 170 million and a labour force of 51 million, Pakistan had a large pool of consumers and workers.
The report, however, also highlighted the problems inhibiting foreign investment and economic growth. The foremost on this list is security concerns.
The report noted that security concerns and the deterioration of law and order in Pakistan had deterred FDI. Investor confidence was further weakened by the bombing of the Marriot Hotel in Islamabad in September 2008, which contributed to the worsening economic situation.
The report also urged the United States to help Pakistan overcome the energy crisis.
It noted that the lack of sustained and affordable energy for the industrial sector had curtained economic growth and discouraged foreign investment.
Several fuel shortages and daily power cuts in major cities hinder the manufacturing sector`s ability to operate, with particularly harmful consequences for the textile industry.
The report noted that improvement in the access to water resources was critical for Pakistan`s economic growth. The country needs to attract foreign investment to build the water storage facilities that its population and industry will need in the next few years.