WASHINGTON: Trade will be a valuable part of the new US strategy for fighting terrorism in Pakistan, says America’s top business lobby which also called for a cut in US tariffs on Pakistani textiles.

President Barak Obama is expected to announce the new strategy on Friday. In a report issued on Tuesday evening, the US Chamber of Commerce and the US-Pakistan Business Council called for talks on a free-trade agreement with Pakistan while also highlighted the problems undermining the country’s economic growth.

The United States is the largest investor and market for Pakistan, which in November required a $7.6-billion emergency credit line from the International Monetary Fund as the world economic crisis hit the nation.

Total trade between the countries has shot up to $5.6 billion last year from $2.6 billion in 2001, the year Pakistan joined the US-led war on terror following the September 11 terrorist attacks.

The two business groups said that stronger economic ties with Pakistan will help advance America’s geopolitical goals in South Asia.

The report sought a review of US tariff policy on Pakistan, saying that duties on Pakistani textiles were higher than those from other key producers.

The groups backed a proposal by Senator Maria Cantwell and Congressman Chris Van Hollen for a duty-free import of certain products from the Pak-Afghan border regions.

‘In addition to its strategic elements, a broad-based relationship with Pakistan needs to include enhanced cooperation in the areas of trade and investment and energy security,’ said Myron Brilliant, the US Chamber’s senior vice president of International Affairs and member of the board of directors of the US-Pakistan Business Council.

‘We are actively working with both governments to strengthen our economic ties.’

The chamber noted that greater trade engagement with Pakistan would create new opportunities for US businesses and jobs in both countries.

It urged the Obama administration to work with Pakistan to boost intellectual property rights protection to foster US private sector investment in the country.

‘Our report also urges US government officials to work with Pakistan to address bilateral trade and investment opportunities,’ said Jay Collins, the chairman of the board of directors of the USPBC. ‘Our members stand ready to contribute to efforts to expand commercial relations between the two countries.’

Key recommendations for the Obama administration and members of Congress include:

Obtain passage of US foreign assistance legislation showing that the United States is committed to ensuring Pakistan’s long-term prosperity.

Address unfair trade and investment practices with Pakistan to ensure that American companies find a level playing field.

Approve legislation creating Reconstruction Opportunity Zones to promote economic development in Pakistan.

Conclude a high-standard bilateral investment treaty with Pakistan to provide safeguards for US investors.

Pakistan is fast losing US market share in key products as its textile exports have been far weaker than those of China, India and Bangladesh during the US fiscal year 2009, which ends in October.

Lower textile and clothing exports will inevitably filter into lower total exports as textile is the largest component of the country’s trade, around 55 per cent.

The estimated total export of the country for the current fiscal year is $18 billion against the targeted export of $21.5 billion.

The United States is Pakistan’s largest trading partner. Pakistan’s experts in 2007-08 totalled $19 billion, of which 20 percent or $3.7 billion, went to the United States.

Trade between the United States and Pakistan has increased significantly in recent years. US goods exports to Pakistan rose $462 million in 2000 to nearly $2 billion in 2008. US import of goods from Pakistan surged from $2.1 billion in 2000 to more than $3.6 billion in 2008.

Total bilateral trade grew to $5.6 billion in 2008, from $2.6 billion in 2001.

The United States is also Pakistan’s largest investor, providing approximately one-third of the country’s total foreign investment. FDI inflows from the United States to Pakistan increased dramatically in recent years, from $92.7 million in 2000-01 to $1.3 billion in 2007-08.

The joint report issued in Washington on Tuesday evening reminded US investors that with a population of 170 million and a labour force of 51 million, Pakistan has a large pool of consumers and workers.

The report, however, also highlighted the problems inhibiting foreign investment and economic growth. The foremost on this list is security concerns.

The report noted that security concerns and the deterioration of law and order in Pakistan has deterred FDI. Investor confidence was further weakened by the bombing of the Marriot Hotel in Islamabad in September 2008, which contributed to the worsening economic situation.

The report also urged the United States to help Pakistan overcome the energy crisis.

Dawn (Pakistan)