Islamabad (TDI): Pakistan and the United States appear to be nearing a breakthrough in ongoing trade negotiations, with both sides actively exploring a Preferential Trade Agreement (PTA) aimed at boosting market access and expanding bilateral commerce.
During a virtual meeting, Finance Minister Muhammad Aurangzeb and US Commerce Secretary Howard Lutnick discussed tariff frameworks and ways to enhance trade cooperation, The News reported.
Both sides reportedly expressed satisfaction with the progress and agreed to finalize discussions by next week.
“Alongside the PTA, both parties are working toward a broader economic partnership based on strategic and investment priorities,” an official statement said following the latest round of talks held virtually on Wednesday.
The trade discussions come in the wake of Field Marshal Asim Munir’s recent visit to Washington, which helped pave the way for renewed economic dialogue. Officials are currently evaluating the feasibility of either a Preferential Trade Agreement (PTA) or a broader Bilateral Trade Agreement (BTA).
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One of the proposals on the table is a mutually beneficial tariff arrangement. For instance, the US could place Pakistan’s textile exports under a 10% tariff slab, while Pakistan could reciprocate by easing tariffs on American cotton and soybean imports. Any such agreement would comply with World Trade Organization (WTO) guidelines, sources confirmed.
Currently, bilateral trade favors Pakistan, with exports to the US hovering around $5.1 billion, while imports stand at $2.1 billion, yielding a trade surplus of $3 billion in Pakistan’s favor.
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While the US typically prioritizes trade negotiations with countries where it has a large deficit, officials say the Trump administration is open to offering Pakistan enhanced market access, particularly in the textile sector, where potential incentives could be worth $2 to $3 billion annually.
Further easing may be facilitated under Pakistan’s National Tariff Policy, set for approval alongside the upcoming Budget 2025-26.
Farkhund Yousafzai is an Associate Editor at The Diplomatic Insight.
