There was a positive development on the trade front a few days back when US Assistant Secretary of State Alice Wells announced that her country plans to send 15 trade delegations to Pakistan next year. The delegations would explore avenues for the expansion of US-Pakistan trade. At the same time, this information was first revealed in a speech in which CPEC was the main point of discussion. That could be considered a cause for concern for Pakistan, as the US has repeatedly questioned China’s Belt and Road Initiative, of which CPEC is a vital part. Is the US interested in Pakistan because it sees economic and trade potential, or is it merely to undercut China, which has been investing in Pakistan heavily for many years?
Chinese loans relating to CPEC and other projects have recently become a source of concern for some domestic observers. It was no coincidence that Wells was “crystal clear, [that] the US-Pakistan development partnership has primarily taken the form of grants — not loans,” while also noting that this offered “a sense of the direction that we envision”. Whatever the case, Wells said that Pakistan would be of great interest to the US Development Finance Corporation (DFC) — a new agency which will consolidate the Development Credit Authority of the United States Agency for International Development with the Overseas Private Investment Corporation, providing $60 billion in loans, loan guarantees, and insurance to US companies that invest or operate in developing nations.
This is a massive pool that the government of Pakistan would be wise to tap into while considering the broader implications vis-a-vis relations with China. Some work is already being done on that front — Wells noted that during Prime Minister Imran Khan’s visit to the US this summer, President Donald Trump was “extremely enthusiastic” about the potential for increasing and expanding trade and investment. Pakistan may well be in a for a delicate balancing act if it is to fully benefit from the renewed US interest in the country. Still, being a proxy in a trade war will be a lot more beneficial than being one in a hot war.
Published in The Express Tribune, November 30th, 2019.
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