ISLAMABAD: During his recent visit to Pakistan, Republican Senator Lindsey Graham, a close aide of US President Donald Trump, indicated that he could use his influence with the US government to enable Pakistan to clinch a free trade agreement (FTA) with America.
In response, the Pakistani government spokesman said “although Pakistan is helping the United States in restoring peace in Afghanistan, when we talk about the FTA, it is very difficult as it takes five to seven years.”
The reality is different. Average time for the US to conclude is merely 18 months. There are many cases where FTAs were concluded in a short time. For example, the US-Jordan FTA took only four months. Similarly, in case of Bahrain and Oman, it took seven and 10 months respectively.
The longest the US has taken to conclude any of its 14 FTAs is the one with Panama, which took 38 months from the beginning of negotiations to the signing of an agreement. Of course, once an agreement is concluded, it could take some time for its implementation. The average time span is 45 months.
The US-Jordan FTA can serve as a good precedent. Jordan got the FTA as a reward for playing a constructive role in achieving Oslo Accords between Israel and Palestine in 1993. Now, Pakistan is being asked to play a similar role in bringing Taliban to the negotiating table and signing a peace agreement to enable the US to exit Afghanistan.
Pakistan is already playing an important role but as in the past it may miss the chance to translate this opportunity into any long-term trade gains for itself.
Pakistan lost a good opportunity when it sided with America in the aftermath of 9/11 attacks. It could have pressed hard for an FTA but instead settled for military and other financial aid. Now, the present opportunity should not be allowed to slip away. Aid is short-lived whereas trade is beneficial in the long term.
After Jordan signed the FTA with the US, several large American companies established factories in that country to avail duty-free access. Within five years after the FTA, Jordanian exports to America increased twenty fold.
Although Jordan had no previous record of exporting textiles and clothing to the US, now exports of these products exceed $2 billion.
The US is already Pakistan’s top most export destination with exports of about $3.56 billion or more than twice as much as the second placed country, the United Kingdom with $1.63 billion or the third place export destination, China with $1.5 billion.
