The United States and Pakistan have a long-standing history of trade relations. Pakistan is an emerging market economy with a growing middle class, making it an attractive destination for American businesses looking to expand their operations. In this article, we will explore the current state of the US-Pakistan trade agreement and its potential impact on both economies.
The current trade agreement between the United States and Pakistan is called the Trade and Investment Framework Agreement (TIFA). The TIFA was signed in 2003 to promote trade and investment between the two countries. Since then, both countries have taken steps to strengthen their economic ties.
In recent years, the US has become Pakistan`s largest export market. According to the US Trade Representative, the total bilateral trade in goods and services between the US and Pakistan was $6.6 billion in 2020. The US primarily exports machinery, aircraft, and pharmaceuticals to Pakistan. On the other hand, Pakistan exports textiles, rice, and leather goods to the US.
Despite the growing trade ties, there are still barriers that hinder the growth of trade between the US and Pakistan. One of the major obstacles is Pakistan`s complex tariff structure. The US has been pushing for Pakistan to simplify its tariff structure to make it easier for American businesses to export to Pakistan. Additionally, Pakistan is also facing challenges related to intellectual property rights and investment restrictions.
To address these issues, both countries have been engaging in ongoing negotiations to update the TIFA. The new agreement is expected to improve market access for US exports to Pakistan and address the trade imbalance between the two countries. The updated agreement is also expected to address non-tariff barriers, such as intellectual property rights, investment restrictions, and technical barriers to trade.
The new agreement will likely have a positive impact on both economies. The US will have access to a growing market, while Pakistan will have access to new technology and investment opportunities. The updated TIFA could also attract more foreign investment to Pakistan, which could create new jobs and boost economic growth.
In conclusion, the US-Pakistan trade relationship has come a long way since the signing of the TIFA in 2003. While there are still challenges that need to be addressed, the ongoing negotiations to update the agreement are a positive sign for both economies. The updated TIFA has the potential to create new opportunities for trade and investment, which could benefit both countries in the long run.