The US-Pakistan relationship, severely tested by the Afghan war and border security issues over the last two years, appears to be moving to a wide-ranging cooperative phase as officials this week discussed economic ties with a thrust on trade and investment.
Finance Minister Dr. Abdul Hafeez Shaikh and Deputy Secretary of State Thomas R. Nides co-chaired the US-Pakistan Economic and Finance Working Group, with Washington vowing to focus on Pakistan’s longstanding call for “trade not aid” as the driving force behind ties.
Another indication of the Administration’s commitment to ties came as the White House voiced its opposition to a Congressional move to condition US assistance for Pakistan.
“These certification requirements – some of which require the Secretary of Defense to certify Pakistani cooperation on issues outside of his purview – are proposed at a particularly sensitive time and would severely constrict DOD’s (Department of Defense’s ) ability to respond to emergent war-time coalition support requirements, putting at risk the success of our campaign in Afghanistan,” the White House said in a policy statement in reaction to proposals to attach certification requirements to Pakistan assistance in the year.
Secretary of State Hillary Clinton has already waived certification requirements for aid to Pakistan. The Administration’s firm stand on the need for continued US assistance for Pakistan comes as relations between the two sides crawl back from a “strategic pause” of around 18 months, during which the Abbottabad raid on Osama bin Laden’s hideout and killing of 24 Pakistani soldiers damaged the ties seriously.
Focused on meeting the 2014 military drawdown from Afghanistan in accordance with the NATO-set deadline, the Obama Administration is banking on Pakistan’s critical supply routes and its cooperation for success of the Afghan reconciliation process.
Islamabad, on the other hand, seeks greater trade access to the US market and financial support for its mega projects like Diamer Basha dam, as indicated by Dr. Shaikh in a think tank appearance on Friday.
At the outset of the Economic Dialogue at the State Department Dr. Shaikh and Nides both sounded confident to take forward the economic cooperation forward.
Deputy Secretary Nides said the US-Pakistan cooperation is not only about helping each other in national security, but also in economic growth.
“We are going to continue with the idea of trade not aid that we have been working on for the last two years —- our theme for these talks is about the economic growth of the people of Pakistan,” Nides said, standing along side the finance minister.
The Pakistani finance leader appreciated the longstanding bilateral trade and investment links, saying economic ties are vital to to the relationship. He said Deputy Secretary of State Nides played a major part in re-energizing the partnership.
“We are looking forward to deepening our economic relationship —- the areas we want to focus are trade and investment, better utilization of external assistance —- we are trying to bring our businesses together to put this relationship on really strong foundations,” the finance minister noted.
Islamabad and Washington began to repair the bilateral relations in July after Secretary of State Hillary Clinton expressed apology over killing of 24 Pakistani soldiers on Salala border posts and Islamabad reopened its blocked supply routes that transport NATO supplies into landlocked Afghanistan.
Pakistan’s Ambassador to the United States Sherry Rehman acknowledged after the meeting that Pakistan and US are moving to a broad spectrum of discussions at multiple levels. She said enhancing trade, investment opportunities is very important to the relationship.
In Islamabad this week, Foreign Minister Hina Rabbani Khar said this week in Islamabad that the US-Pakistan relationship had been fully restored.
In a post-meeting statement, the State Department said both sides committed to broadening private sector ties between their two countries.
Deputy Secretary Nides highlighted the US government’s many initiatives in this area – including a Pakistan investment conference in London hosted by the Office of the US Trade Representative in October, the launch of the Pakistan Private Investment Initiative, and a series of conferences and virtual meetings devoted to training and mentoring Pakistan’s entrepreneurs.
In other meetings with Dr. Shaikh and his high-level delegation, senior State Department officials and USAID Administrator Rajiv Shah also highlighted the positive results of ongoing civilian assistance programs in Pakistan, including significant contributions in sectors critical to economic growth – such as the addition of more than 400 MW of capacity to Pakistan’s power grid and the construction of over 650 km of roads to date.
“Both sides agreed that Pakistan’s prosperity is predicated on energy sector reform; the United States welcomed Pakistan’s commitment to undertake the reforms needed to attract greater investment,” a statement said.
The United States commended Pakistan’s recent efforts to expand economic cooperation with its neighbors. Both sides discussed ways to improve trade and transit with Afghanistan and the Central Asian republics, citing the importance of enhanced trade for the region’s stability and prosperity. The United States welcomed the Government of Pakistan’s plans to extend most-favored-nation status to India by the end of the year.
Finance Minister Shaikh led a delegation of top economic managers including Minister of State Saleem Mandviwalla, Finance Secretary Wajid Rana, Governor State Bank Yasin Anwar and Chairman Federal Board of Revenue Ali Arshad Hakim.
The US delegation included senior representatives from the Department of State, USAID, the Office of the US Trade Representative, and the National Security Staff.
