In line with the government's decision to pursue a region/country specific strategy to enhance exports, Commerce Minister Humayun Akhtar made a hectic one-day visit to the US earlier this month. He held separate meetings with several high level officials, including Commerce Secretary, Carlos Gutierrez; Under Secretary of State for Economic, Agriculture, and Business Affairs, Earl Anthony Wayne; Deputy National Security Advisor for International Economic Affairs, Faryar Shirzad; Trade Representative-designate Peter Allgeier; and Assistant Secretary of State for South Asia, Christina Rocca.
During his discussions with these officials, he later told the press, he emphasised the need for a free trade agreement which would greatly benefit Pakistan.
That is not an extraordinary request for Pakistan to make considering that such an agreement already exists between Washington and certain other countries, including Bangladesh and Sri Lanka. In the case of Pakistan, it is all the more important because of a convergence of opinion and interest on that the prevalent poverty levels in the country contribute to expansion in the cadres of extremist groups.
Ever since this country forged a close alliance with the US in the aftermath of 9/11, the latter has been making promises of help in economic development. But help has not been forthcoming in terms of providing Pakistan with greater access to the US own market.
In the post 9/11 period the EU did offer greater market access through a preferential treatment regime, but that lapsed recently. Despite its best efforts, Islamabad has failed to get a renewal of preferential treatment for EU-bound exports.
Meanwhile, the volume of Pakistani exports to the US - the main market for this country - has remained more or less static. The following statistics speak for themselves: in the fiscal year 99-00 Pakistani exports to the US amounted to 24.8 percent of the total exports, in 00-01 the figure stood at 24.4, in 01-02 at 24.7, in 02-03 at 23.5, and in 03-04 at 23.6.
True, the US has extended some financial aid and grants to Pakistan to be spent on the purchase of its military merchandise and also for some development projects. But as Islamabad has been repeatedly and rightly saying, what it needs is trade rather than aid so that it can stand on its own feet and effectively address the problem of poverty.
Pakistan's main exports to the US are a variety of textiles, leather, surgical and sports goods - all of which happen to be labour intensive industries. FTA status can give a big boost to production activity in these sectors, creating a lot of the much-needed jobs.
During the recent years, our textile industries have made appreciable efforts to modernise and upgrade their machinery and other facilities. As a prominent authority on global outsourcing and CEO of Cyber Merchants Exchange, Frank Yuan, noted at a recent seminar in Karachi, this sector enjoys availability of raw material, quality fabrics and modern finishing and processing systems. Hence so far as the quality and competitiveness of Pakistan's textiles sector is concerned it is not far behind India - which along with China dominates the international textiles market at present - in terms of its potential to grab a bigger share in the US and European markets.
Experts believe that it can easily emerge as the world's second biggest exporter of textiles. A simple facilitative measure of free trade agreement, which the US extends to some other friendly countries, can go a long way in helping Pakistan take the initial important steps in that direction.