Pakistan, US fail to achieve ‘breakthrough’ in promoting trade ties

ISLAMABAD: Pakistan and the US have failed to achieve any ‘breakthrough’ for promoting trade ties despite US Secretary of Commerce Wilbur Ross's visit to Islamabad, The News has learnt. 

“This high-level visit proved a non-starter because the US did not make any firm commitment on three demands put by the Pakistani side on negotiating table. It could be just termed posturing visit for balancing act in the wake of US President Donald Trump’s visit to our arch rival India," top officials of the Finance Division who were privy to parleys with the visiting US secretary of commerce confirmed to The News in background discussions here on Wednesday evening.

The crux of day-long official meetings between the US and Pakistani side could be concluded just in a few words that “nothing substantial came out of it” despite Islamabad's hopes that Washington might offer something ‘concrete’ for promoting trade and commercial ties but all such hopes were dashed to the ground.

Top official sources said that the Pakistani side tabled three demands before the US visiting delegation including initiation of Scoping Study for Free Trade Agreement (FTA) but the US side replied that “they would look into it” instead of making any commitment.

The Pakistani side also demanded of expanding the GSP Plus list for providing concession on export items from the US side but Washington did not seem to agree to it. The US had already granted GSP Plus on such items where Pakistan could not increase its trade share, so again it became non-starting area. The Pakistani side also demanded of moving towards TIFA (Trade and Investment Framework Agreement) but the visiting US authorities again replied that they would see how things could proceed in future.

Although, Pakistani officials still seemed confident that US would reciprocate positively on TIFA front in coming future but it was a fact that Washington did not make a firm commitment.

Keeping in view experience of the past many years, there were several occasions when the US agreed to hold talks on TIFA and Bilateral Investment Treaty (BIT) but it always proved a futile exercise after holding sessions for several years.

According to official statement issued by the Ministry of Commerce on Wednesday, "in line with the mutual desire on the part of both US and Pakistani leadership to intensify economic engagement with focus on trade and investment, Wilbur Ross, US Secretary of Commerce, undertook a bilateral visit to Islamabad on 26th February, 2020. The said visit was outcome of recently-held discussions of Prime Minister Mr. Imran Khan and President Donald Trump to promote bilateral trade and enhanced economic engagement.

"During his call on meeting with Abdul Razak Dawood, Adviser to Prime Minister on Commerce, Industries & Production and Investment, the issues related to bilateral trade and enhanced market access to Pakistan were discussed. The adviser told the visiting delegation that after achieving economic stability, the government under the leadership of Prime Minister Imran Khan is now focusing on job creation and export augmentation by encouraging foreign investments. He suggested that this is high time for US companies to invest in Pakistan. He also took up the issue of early convening of the long awaited 9th session of Trade and Investment Framework Agreement (TIFA) meeting as well as the visit of US business delegation to Pakistan to participate in the Business Opportunities Conference in order to forge a better networking among the private sectors of both countries.

"The Adviser also suggested that the U.S. International Development Finance Corporation (IDFC) should help in developing of new businesses in Pakistan. Wilbur Ross said that his visit to Pakistan is part of his government's desire to increase trade relations with Pakistan. He also believed that such links between both the countries would not only enhance trade but encourage further expansion of ties in all fields of economic engagement. About IDFC assistance, Secretary Ross sounded positive and suggested that the Ministry of Commerce should propose projects in this regard.

"US Secretary of Commerce also called on Minister for Energy, Omar Ayub Khan. The energy minister gave an overview of Pakistan's energy sector and the present government's earnest endeavours in reforming this sector. These efforts are being personally overseen by the Prime Minister of Pakistan himself. Omar Ayub Khan called for greater US investment in energy sector, including areas such as power generation, transmission and distribution, artificial intelligence, renewable energy, hydel energy and training opportunities. The minister also reaffirmed Pakistan's commitment to cleaner fuels and green energy. The Special Assistant to Prime Minister on Petroleum, Nadeem Babar, informed the visiting side on key actions taken to improve ease of doing business in Pakistan. SAPM also shared how more US investments could be incremental in improving the business relations between both the US and Pakistan. Wilbur Ross said his visit to Pakistan is part of the US government's desire to increase trade links with Pakistan. He also believed that such links between both the countries would not only enhance trade but encourage further expansion of ties in all fields.

"Both the sides agreed to step up cooperation in the energy sector. Wilbur Ross, Secretary Commerce of the United States of America, along with the accompanying delegation, called on the Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Finance Division. The adviser welcomed the secretary commerce and said that Pakistan and United States had maintained a durable relationship over the years and there was a need to build it further. The adviser said that the arrival of the delegation from the commerce sector is good news for Pakistan and would have positive consequences for the country.

“This is at a time when the government is looking forward to a major boost in exports after offering concessions to the export oriented sector of Pakistan. "The adviser said that Pakistan was trying to carve out a new progressive image in the comity of nations. We have tried to follow the FATF action plan to a significant level, opened our markets to the foreign investors by providing ease of doing business and we are trying to build our image as a tourism-friendly and investment-opportunity country in the region. The adviser also shared the updates on the economy with the US Secretary of Commerce. He said that though the country is trying to revive the economy through stabilization reform and inviting foreign investment to the country as well as taking care of its vulnerable, the rising prices of food items, high energy prices and slow revenue generation were issues that concerned him. He said that the government’s efforts are directed towards providing ease to the common man and it would require guidance from its global partners as well. The trade between the two countries is only around $7 billion and the country has an urgent need to increase that to help in GDP growth which requires long term planning for economic development. He said that we have made a mistake in the past of not forming our alliances on the economic front based on our developmental requirements. He felt this was the time to enable the relationship to become more long lasting on a firm footing.

"The US secretary commerce said they can help Pakistan in the energy sector and the details of the projects where economic cooperation could be enhanced are being worked on. The Adviser said that he hopes that a healthy interaction shall continue in future as well."