Excluded from a whirlwind of free trade agreements under negotiation worldwide, Pakistan is feeling neglected. Sheikh Ilyas Mehmood, chairman of the Pakistan Textiles Exporters Association (PTEA), is urging the US to consider a free trade agreement with the South Asian nation.
The US is Pakistan’s biggest trading partner, importing nearly $4 billion worth of its goods per year, including textiles. Mehmood believes that number could quickly rise as high as $6 billion if Pakistan had increased access to US markets as well as the friendly transfer of some technologies.
Pakistan is also trying to strengthen ties with the European Union, seeking Generalized System of Preferences Plus (GSP-plus). Speaking to the Express Tribune, Yasin Siddik, chairman of All Pakistan Textile Mills Association, said that GSP-plus status, if it finally comes to fruition in January, could help lift Pakistan’s textile exports to $15 billion for the year. Last year, Pakistan’s textile imports hit $13 billion. The textile industry accounts for more than 50 percent of the nation’s total exports.
Mehmood argues that a free trade agreement with Pakistan would redound to the benefit of the US, given the quality and low cost of its textiles. Pakistan aims to position itself as a major exporter in light of the rising costs of China and the political riskiness of Bangladesh.
Pakistan has also benefited from the decline of the rupee, which has fallen 8 percent since the beginning of the year, also been a boon to exporters. In the last two months alone, it has dropped 4 percent against the dollar.
Still, Pakistan is not without its challenges. A steep rise in gas and electricity prices will likely consume much of the additional revenue textile exportation produces. The gas tariff for captive power plants has risen by 17.4% and electricity rates for industrial units has skyrocketed 57% in recent months. And Pakistan’s stalwart regional competitor, India, is anticipating a big year as well, forecasting $17 billion in textile exports. Pakistan could improve its standing even more if it wins duty-free access to US markets this year, a longstanding aspiration.