The Pakistan – US Trade and Investment Framework Agreement’s (TIFA)
inter-sessional meeting is scheduled during March 7-9 in Islamabad.
Pakistan looks up to TIFA with the US as an opportunity not only to refresh
its ties with the US since the new Biden government has assumed power but
also as part of its efforts to boost post COVID economic recovery.
Islamabad is making efforts to extract the maximum benefits from TIFA as it
struggles hard to buoy up its economic growth and employment for the last
few years. Although, Pakistan signed TIFA with the US in 2003, it could not
utilize it up to optimum potential due to Pak policy rigidities and differences
with the US on several issues. The goal of the TIFA meetings is to expand
bilateral trade and investment in both goods and services. The last meeting
of US – Pak TIFA had taken place on May 2, 2019.
The Pak Ministry of Commerce meeting to fine-tune agenda ahead of
meeting in early February 2022 decided to establish institutional linkages in
health sector between the two countries, promotion of IT exports,
cooperation in agricultural technology, especially animal health surveillance
& disease reporting, apart from sanitary phyto-sanitary standards and
increasing investment in Pakistan’s SEZs. The agenda of the current
meeting may also include a request from Pak side soliciting US investment
in renewable energy and waste management.
Islamabad, as pointed out by National Security Advisor Moeed Yusuf in a
blue print submitted to his American Counterpart Jake Sullivan on May 26,
2021, is seeking a “paradigm shift” in bilateral ties with the US which would
not only be based on security and defence cooperation, but also would focus
on economy and trade. This could be seen in the context that former US
President Donald Trump had suspended all security assistance to Pakistan
in January 2018, arguing that he was not satisfied with Islamabad’s
cooperation and role in the fight against terrorism.
The US would also try to reiterate its concerns during the TIFA meeting
including unfavorable trade practices and restriction of market access for
agricultural commodities in Pakistan, restrictive data protection laws and
poor intellectual property protection including lack of effective trade mark
protection, printed work and digital content, etc.
The US investment in Pakistan would depend on how soon and better
Pakistan addresses the US concerns. Just making SEZs and
announcements of incentives would not help in the absence of quality infrastructure and security which Pakistan lacks. The 10 prioritized SEZs under
the CPEC in Pakistan face shortage of water, electricity and poor
connectivity. The country also lacks in skilled man power and good
governance which are important factors to boost investment.
As far as trade is concerned, the bilateral trade stood $6.8 billion, making US
the largest trading partner of Pakistan. But it was not possible to raise
bilateral trade as long as Pakistan does not diversify its export basket from
primary products to manufactured ones. Pakistan has less to offer to the US
market due to lack of industrial diversification.