KARACHI: Pakistan’s government needs to address its tariff and non-tariff barriers against American exports and companies, a spokesperson at the US consulate general in Karachi said on Thursday as both nations seek to forge closer trade ties through negotiations.

Reva Gupta, the spokesperson at the US consulate general in Karachi, made the comments a week after Pakistan and the US started what the official described as “dynamic” negotiations with Finance Minister Muhammad Aurangzeb on Washington’s imposition of tariffs.

The talks take place as US President Donald Trump imposed steep tariffs on a number of countries earlier this year, a move widely viewed as a setback for the global economy still recovering from the coronavirus pandemic. Pakistan faces a potential 29 percent tariff, currently under a 90-day pause announced in April, on its exports to the US due to a $3 billion trade surplus with the world’s biggest economy.

“In our bilateral engagements with Pakistan, we always message the need to jointly tackle challenges to our trade relationship, including the need for Pakistan to address its longstanding tariff and non-tariff barriers against US exports and companies,” Gupta told Arab News.

The tariffs could be a setback to Islamabad’s hectic efforts aimed at navigating a tricky path to economic recovery. Pakistan hopes to achieve sustainable economic growth driven by exports.

The US is Pakistan’s largest export destination. American exports to Pakistan were valued at $2.1 billion in 2024, up 4.4 percent ($90.9 million) from 2023, according to US government data. The import of goods from Pakistan to the US totaled $5.1 billion in 2024, up 4.9 percent ($238.7 million) from 2023.

“The United States and Pakistan share a robust economic relationship going back decades, of which trade and investment are key elements,” Gupta said. “That the United States remains Pakistan’s largest export market globally is a testament to this strong partnership”.

Gupta, however, referred to US Trade Representative’s (USTR) National Trade Estimate Report which highlights significant foreign barriers to US exports in various countries, including Pakistan.

 The USTR details tariff and non-tariff hurdles ranging from Pakistan charging higher tariffs to US businesses to the closure of Internet services, imposing a ban on US beef imports and “perceived politicization” of the anti-graft National Accountability Bureau body.

“US companies have cited concerns that Pakistan has been imposing high tariff rates and, in some cases, additional duties, on products such as automobiles and finished goods,” the report said.

Qamar Sarwar Abbasi, a spokesperson of Pakistan’s finance ministry, did not respond to Arab News’ request for comment.

Some prominent American companies operating in Pakistan include Pepsi-Cola, General Electric International, Procter and Gamble, Pfizer and DuPont, according to the International Trade Administration, a US government agency.

Experts have warned the tariffs could harm Pakistan’s competitiveness in the global market, especially if regional exporters such as China, Bangladesh and Vietnam redirect more goods to Europe, intensifying competition in alternative markets.

‘LIKELY TO SAIL THROUGH’

However, economist Shankar Talreja, who is also the director of research at Topline Securities Ltd. brokerage form, said talks between Washington and Islamabad are likely to “sail through.”

“Pak-US trade talks are likely to sail through as Pakistan exports are primarily based on labor-intensive industry such as textile,” Talreja told Arab News.

He said Pakistan is likely to increase its import of agricultural commodities such as cotton and petroleum products from the US to fill the trade deficit.

But if talks fail, Pakistani textile exports may be adversely affected, he said.

“If talks are not successful, Pakistan textile exports may get hurt in future assuming other countries will successfully negotiate with the US,” the analyst warned.

The textile industry attracts the largest amount of foreign exchange for Pakistan, fetching $17 billion for the cash-strapped nation in FY2024.

ISLAMABAD: Pakistan has so far not made any decision to abrogate any bilateral agreement with India, a senior official of the country’s foreign office said on Thursday, hours after Defense Minister Khawaja Asif stated the provisions of Islamabad’s Simla Agreement with Delhi were no longer applicable.

India and Pakistan signed the Simla Agreement in 1972 after the 1971 war between the two countries, which New Delhi won and led to the creation of Bangladesh. One of its main clauses was that India and Pakistan both agreed to bilaterally discuss and resolve the issue of the disputed Himalayan territory of Kashmir.

Another clause of the agreement was that both countries renamed the Ceasefire Line, the de facto border separating Pakistan-administered Kashmir from the one governed by India, to the “Line of Control” (LoC). Both India and Pakistan agreed not to change it unilaterally.

After India suspended a decades-old water-sharing treaty with Pakistan following an attack in Indian-administered Kashmir in April, Pakistan announced a raft of tit-for-tat measures against Delhi. Islamabad said it had the right to hold all bilateral agreements with India, including the Simla Agreement, in abeyance.

Speaking to Geo News, Asif said the “sanctity” of the agreement had ended due to India’s steps and that all of its provisions were no longer applicable. The defense minister said the bilateral agreement as a whole after India and Pakistan’s May military confrontation, “has no worth or value.”

“No formal decision on abrogation of any bilateral agreement with India has so far been made,” a senior official of Pakistan’s Ministry of Foreign Affairs (MoFA) told Arab News in response to questions.

Asif had reiterated Pakistan’s position that India’s move to hold the Indus Waters Treaty (IWT) in abeyance was illegal as the terms dictated that neither of the two parties could alter its status unilaterally.

Signed in 1960, the treaty allocates the six Indus Basin rivers between India and Pakistan, with the World Bank acting as its guarantor.

Pakistan has rights to the western rivers — Indus, Jhelum, and Chenab — for irrigation, drinking, and non-consumptive uses like hydropower. India controls the eastern rivers — Ravi, Beas, and Sutlej — for unrestricted use but must not significantly alter their flow.

India can use the western rivers for limited purposes such as power generation and irrigation, without storing or diverting large volumes

Asif said neither the World Bank nor any other institution had any “interference or patronage” in the Simla Agreement when it was signed in 1972.

“So then, the Control Line will once again shift to its original status of Ceasefire Line,” the minister said.

While the fragile ceasefire between India and Pakistan announced on May 10 by US President Donald Trump -persists, tensions remain high as delegations by both nuclear-armed neighbors head to world capitals and blame each other for the May conflict.

Kashmir has always remained the root cause of conflict between India and Pakistan. The two countries claim the region in full but administer only parts of it. They have fought two out of three wars since 1947 over the territory.

Delhi blames Islamabad for fomenting militancy in the part of Kashmir it administers. Pakistan denies the allegations and says it only extends diplomatic support to the people of Kashmir it says are living under “occupation.”