Pakistan exports to the United States under the cover of General System of Preferences (GSP) have declined to $130.686 million in 2011 from $169.474 million in 2009, well-informed sources told Business Recorder.
Washington, sources said, had promised to extend unilateral trade concessions to Pakistan on the pattern of European Union (EU) in lieu of Reconstruction Opportunities Zones (ROZs) but it appears that the US may have backtracked from this commitment as well.
US GSP, a programme designed to promote economic growth in the developing world, provides preferential duty-free treatment for over 3,400 products from 128 designated beneficiary countries and territories. However, for the 44 Least Developed Countries (LDCs), enhanced market access is provided by adding an additional 1,434 tariff lines for duty-free treatment: Pakistan is also one of the beneficiaries of US GSP scheme. The GSP programme was instituted on January 1, 1976 and authorised under the Trade Act of 1974. All imports of GSP-eligible articles from beneficiary countries are duty-free. Currently, the US GSP scheme has been renewed till July 31, 2013.
During 2011, the share of GSP generated exports was consistently sliding since it peaked in 2009. In 2011, GSP exports were a mere 3.4 percent of Pakistan's total exports. This compares very poorly to the 5.4 percent share such exports had in the overall figures for 2009.
ROZs programme, which was announced by former President Bush in Islamabad in early 2006, had it been implemented, would have provided duty-free access to nearly 53 percent of the textile tariff lines that Pakistan currently export's to the US. However, in April 2012, Assistant USTR for South and Central Asia Michael Delaney formally communicated to the US Administration's decision to give up further efforts to get the ROZ programme approved by Congress. Reasons given were negative sentiment against Pakistan currently prevailing in US Congress and the political calendar, particularly the 2012 US presidential elections.
The sources said US is a major destination for Pakistan's trade. Every year, around 15-20 percent of Pakistan's total exports enter US market. During 2011-12, Pakistan's total exports to US were $3.532 billion, which is about 16 percent of the total exports of Pakistan to the world.
During the 6th TIFA Council meeting held at Washington on 24th April, 2012, it was decided that US Department of Commerce will explore possibilities of arranging GSP seminars in collaboration with leading Chambers of Commerce and Industry in Pakistan, to encourage greater utilisation of duty free access available to Pakistan under US GSP Scheme.
Pakistan's major exports to US are garments, fabrics, apparel, other textile articles, food items, leather garments, cutlery and surgical instruments etc whereas major imports are raw cotton, machinery, ores and concrete, medical and pharmaceutical products, chemical material and product, paper and paper board, iron & steel Mfg thereof, aircraft equipment and parts and etc.
The sources said, Trade and Investment Framework Agreement (TIFA) between Pakistan and US was signed on June 25, 2003 in Washington D.C. Wide ranging initiatives are covered under the agreement which include enhancement of bilateral trade in goods and services and to secure favourable conditions for long term development and diversification of bilateral trade. The agreement has also constituted a Council comprising representatives of both countries co-chaired by the Minister for Commerce, Government of Pakistan and Trade Representative of the US Government (USTR).
The TIFA Council has met six times since its inception - the 6th meeting was held in Washington D.C on April 24, 2012. The objectives of the Council are as follows: (i) to monitor trade and investment relations, identify opportunities for expanding trade and investment, and to identify issues relevant to trade and investment that may be appropriate for negotiation at an appropriate forum; (ii) to hold consultations on specific trade and investment matters of interest to the parties; and (iii) to identify and work towards the removal of impediments to trade and investment flows.
The third round of Pak-US Strategic dialogue took place on October 20-22, 2010 in Washington DC. During the Economic Cluster Working Group of Strategic Dialogue, the two governments discussed the following issues: (i) unilateral and non-reciprocal market access for Pakistan's core exports by obtaining waiver from WTO;(ii) market access for Pakistan under the US-GSP scheme;(ii) co-operation on technical and vocational education and training; (iii) conclusion of negotiations for Bilateral Investment Treaty (BIT); and (iv) improving intellectual property environment in Pakistan.