KARACHI: Businessmen have stressed that bilateral trade between Pakistan and the United States should be enhanced to $10 billion with a revised Generalised System of Preferences (GSP) scheme.
In a statement on Wednesday, the Businessmen Panel of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) stated that in 2018 Pakistan was the 56th largest trading partner of the US with bilateral trade amounting to $6.6 billion, which was way below the potential.
Businessmen Panel (Federal) Chairman Riaz Khattak urged the US business community to explore Pakistan as an investment destination, adding that companies and investors from Europe and Asia had been investing in the South Asian nation.
He added that the chamber wished renegotiation of the Trade and Investment Framework Agreement (TIFA) between Islamabad and Washington so that Pakistani businesses could gain proper market access.
“The United States has been one of Pakistan’s major trading partners,” he emphasised. “However, for the past several years, the trade volume between the two countries has been almost stagnant while trade balance is largely in favour of Washington.”
Economist Muzammil Aslam told The Express Tribune that one-fourth of whatever was produced in the world was consumed in the United States. “If four jeans are produced by a brand, one goes to the US as it is the biggest consumer market,” he said. “Besides, America also hosts a large number of tourists, who prefer to buy goods from the US, even if the same product is exported by their own country.”
He highlighted that some Pakistani tourists in America purchased goods that were originally produced in Pakistan. Stating the reason behind that behaviour, he said the US was the cheapest and most competitive market. “Many countries have made fortunes by exporting goods to the US such as China and Japan,” remarked the economist.
“Recently, Bangladesh and Vietnam have earned hefty foreign exchange by exporting to the US,” he said. “Such countries have developed quickly after winning access to the US market.”
It was one of the reasons why countries vied to gain market access in the United States as well as tax concessions, said the economist.
In the most competitive American market, every enterprise had to keep prices as low as possible so that the buyer could approach it instead of its competitor, he said.
“Pakistani government gained access to the US market coupled with numerous tax concessions, however, local enterprises failed to compete with well-known brands,” he said.
“Despite the concessions, Pakistan’s exports to the United States have not crossed any remarkable milestone, instead they decline from time to time.”
Published in The Express Tribune, May 28th, 2020.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.