Pakistan Makes Push for Another U.S. Trade Deal

Pakistan is maneuvering for more textile and apparel trade breaks as the 2005 deadline for quota elimination nears.

WASHINGTON — Pakistan is maneuvering for more textile and apparel trade breaks.

This story first appeared in the June 11, 2003 issue of WWD.  Subscribe Today.

As the deadline for quota elimination nears and fears mount over China’s potential domination, developing countries are clamoring for something to help them stay competitive, and trade deals with the U.S. are one vehicle.

Humayun Akhtar Khan, Pakistan’s commerce minister, met with high-level Bush administration officials this week to jump-start a preliminary agreement that Pakistan hopes will pave the way for a bilateral free-trade agreement with the U.S. Khan also is seeking more apparel and textile trade breaks in the interim.

His meetings this week are a run-up to a visit planned between President Bush and Pakistan President Pervez Musharraf the week of June 23, at which time Pakistan hopes to have an initial framework in place to start bilateral negotiations with the U.S.

Pakistan is one of several developing countries maneuvering to mitigate the impact of apparel and textile quota elimination at the end of 2004. There is a movement among some developing countries, textile and labor groups to extend quotas on countries like China, Pakistan and India beyond 2005 .

Khan, who briefed reporters at a breakfast Tuesday morning, said there are pros and cons to the phaseout of the Multifiber Arrangement, which has governed quotas for decades. But he claimed the issue of quota extension is not currently under discussion or on the agenda in Cancun, Mexico, where trade ministers from 146 countries are scheduled to meet in September in the current round of World Trade Organization global trade talks.

It isn’t the first time Pakistan — a frontline ally of the U.S. in the war on terrorism — has come knocking at the door. In February 2002, the U.S. gave a three-year apparel and textile quota package, valued at roughly $480 million, to Pakistan in exchange for its help in the war in Afghanistan. That deal fell short of the broad menu of trade breaks Pakistan was seeking then.

“Pakistan was offered increased market access of $143 million in the first year,” Khan said. “Unfortunately, we have not been able to benefit in the categories where quotas were enhanced because we have not been able to exhaust the quotas in those categories.”

However, for the year ended March 30, apparel and textile imports from Pakistan rose 14.09 percent to 2.55 billion square meters equivalent and represented 6.43 percent of the U.S. import market.

“The benefits that the package gave us [in the first year] were closer to $20 million,” said Khan, who noted he raised the issue with U.S. Trade Representative Robert Zoellick.

Khan said Pakistan is seeking the right to use “intercategory” quota swings, which would mean more flexibility to borrow quota for highly utilized categories.