Pakistan seeks tariff concessions and greater access to United States (US) market in order to boost gross domestic production (GDP) growth in coming years, senior government officials and diplomats said.
Talking to Khaleej Times on the sidelines of second US-Pakistan business opportunities conference, they were confident of positive outcomes and quick progress on key issues to remove tariff barriers and obstacles, hurting bilateral trade and investment.
“This meeting is a sequel to the London conference held in October, which was a good start and we need to build on and further the positive bilateral trade between US and Pakistan,” Munir Qureshi, secretary, ministry of commerce, said.
Pakistan and the US have made significant progress on bilateral Trade and Investment (BIT) treaty at the second US-Pakistan business opportunities conference.
Javed Malik, former ambassador and adviser to Prime Minister Nawaz Sharif, said progress on BIT was encouraging and the two sides would soon sign the agreement. He said there was wide scope for US and Pakistani businessmen to increase cooperation in various key sectors like energy, agriculture, education, IT and telecom, among others.
Responding to a question on the US-Pakistan conference, Malik said it was a very successful event, which laid down foundations of better understandings and future cooperation. He said Prime Minister Nawaz Sharif was committed to promoting e-government in order to facilitate businesses and citizens of the country. He said the third US-Pakistan business opportunities conference was likely to be held in Pakistan, however there no decision had been made.
He said Pakistan urged the US government to extend the period of Generalised System of Preferences (GSP) for more than one year as it was presently renewed on a yearly basis.
“We are very keen to see Pakistani textiles gain access to the US market on favoured terms or at least on similar terms as offered to other least developed countries. This would have negligible impact on domestic US manufacturing, but will help Pakistan in reclaiming some of its lost market share,” he said.
Currently, Pakistan’s exports under the GSP programme stand at $195 million, which is five percent of Pakistan’s total exports to the US. “There is immense potential to increase this figure many folds,” he observed.
Pakistan’s share of the US global imports of textile and apparel products currently stands at around three percent. It has seen little change since the quotas were removed in 2005 while market share of other Asian exporters including China, Bangladesh, Vietnam and Cambodia have grown exponentially.
Pakistan’s textile and apparel manufacturers have a mutually complementary relationship with the US cotton industry. In recent years, Pakistan’s annual average cotton import from the US is worth $300 million, which may grow significantly once preferential access is granted.
“We have set up Special Economic Zones (SEZ) for private investors, public sector and private-public joint ventures. Investors should come and invest in these zones as their income is now exempted from income tax for 10 years instead of five years. There is no bar on profit repatriation and all foreign investors will be treated at par with local businessmen,” he added. Responding to a question on investment in energy sector, he said the government was considering setting up LPG terminals in the country. “We have discussed LPG terminals in details at the conference and invite US, European and UAE investors to install these units in the country.”
Stephen Snyden, chief executive of an IT company, said Pakistan offered a congenial environment for investment in IT. He said the workforce available in Pakistan was of international standards. He mentioned that the labour cost is half of the cost incurred in employing equally skilled workforce in India.
A Pakistani business delegate in IT, Raza Saeed, apprised participants that out of $500 million advertisement market, only one percent ($5 million) is being covered by online advertisement. “So, there is a wide gap which can be covered through investment in this sector,” he added.
